Legal & General Investment Management (‘LGIM’) celebrates the achievement of an important milestone for its Defined Contribution (‘DC’) business, having passed £100bn in DC assets under management (AUM).
26 Nov 2020
DC business recorded +18% CAGR, more than doubling its total AUM since 2015
LGIM now has £102bn DC AUM across 3.9m members
The business has gone from strength to strength since its foundation in 2003, adapting its operations, products and services to meet the challenges and seismic shifts in market dynamics brought about by the introduction of auto enrolment (2012) and pension freedoms (2015).
LGIM’s close collaboration with schemes and members has been a big driver of its success.
LGIM’s DC division has recorded an 18% [as at September 2020] compound annual growth rate over the last seven years, more than doubling its AUM, which stood at a total £46.3bn in 2015.
In particular, total DC AUM increased by more than a third since 2018, driven by strong inflows from bundled and investment-only clients, member contributions from existing and new schemes as well as large asset transitions from other providers.
LGIM now counts £102bn of AUM across 3.9 million DC members which makes LGIM the market leader in the defined contribution space with a 22% market share*.
Emma Douglas, Head of Defined Contribution: "Supporting our members through their retirement journeys and giving them the tools they need to help them feel better about their finances has been central to LGIM’s strategy. Investment in technology has played a key role here. Over the past years, LGIM has rolled out a number of initiatives which include video benefit statements, a financial wellbeing hub and an app which gives savers real-time access to employee benefits information including their pension as well as other applications through a single login.
A theme that has continued to come through member feedback, is that savers are interested in building as much as possible in their pots as well as finding out how their investments can make a difference. Our research has shown that 68% of savers would engage in their pensions if they knew it was invested in environmental initiatives**. Most recently, LGIM rolled out a pilot with Tumelo, a fintech platform that allows savers to indicate how they would vote on the key issues at the companies they hold in their funds.
This important milestone has been reached through the hard work of our 600-plus team and close collaboration with our clients and members. We are in a strong position as we look ahead to the next phase of growth. We have already invested in excess of £40m in our DC business over the last three years and are committed to maintaining investment in the years ahead, as we respond to savers needs by building member feedback into our product development as well as improving the way in which we communicate with savers to ensure they have the support they need during their savings journey up to and through retirement."
Established in 1836, Legal & General is one of the UK's leading financial services groups and a major global investor, with over £1.2 trillion in total assets under management* of which 39% is international. We have a unique and highly synergistic business model, which continues to drive strong returns. Legal & General provides powerful asset origination and management capabilities directly to clients, which also underpin our leading retirement and protection solutions. We are a leading international player in Pension Risk Transfer, in UK and US life insurance, and in UK workplace pensions and retirement income. Our purpose is to improve the lives of our customers and create value for our shareholders. Through inclusive capitalism, we are investing in long-term assets, such as real estate and infrastructure, that can help build a better society for the future.
Legal & General Investment Management
LGIM is one of Europe’s largest asset managers and a major global investor, with total assets under management of £1.16 trillion1 ($1.47tn, €1.35tn, CHF 1.31tn). We work with a wide range of global clients, including pension schemes, sovereign wealth funds, fund distributors and retail investors.
For more than 50 years, we have built our business through understanding what matters most to our clients and transforming this insight into valuable, accessible investment products and solutions. We provide investment expertise across the full spectrum of asset classes including fixed income, equities, commercial property, and cash. Our capabilities range from index-tracking and active strategies to liquidity management and liability-based risk management solutions.
1 Data as at 30 June 2023. Data combines assets under management by LGIM in the UK, LGIMA in the US and LGIM Asia in Hong Kong.
Assets under management include securities and derivatives positions
*as at HY 2023