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Corporate
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Legal & General sets out refreshed strategy and financial targets.
12 Jun 2024
Group shares vision for a growing, simpler and better-connected business, focused on three core divisions1, and announces £200m share buyback for 2024 as first step of plan to increase returns to shareholders.
Group Chief Executive Officer, António Simões, and Group Chief Financial Officer, Jeff Davies, will present the Group’s strategy at a Capital Markets Event at 9:30am (BST). A link to the presentation webcast is here. Slides will be made available shortly before 9:30am.
Legal & General Group CEO, António Simões: “Over the last 5 months we have rigorously reviewed our business, listening to investors, customers, partners and employees. This work has deepened my belief in our strong foundations and excellent potential.L&G is in prime position to respond to and benefit from major structural and societal changes. Changing demographics, climate transition, economic uncertainty and technology are driving demand for trusted, experienced investors that can manage risk through the cycle, originate productive assets, and deliver returns for savers.
Our vision is for a growing, simpler, better-connected L&G, focused on three core business divisions, and set apart by our shared sense of purpose and powerful synergies.
By seizing the opportunity in Institutional Retirement while investing to scale and deepen our capabilities in Asset Management and Retail, we will evolve our business to better address society’s changing investment needs, and shift towards fee-based earnings at higher returns on capital. We will make the most of our international business opportunities, with a particular focus on the US.
The strategy and targets set out today signal L&G’s ambition and commitment to invest to grow our business, and reward our shareholders for their support.”
The Group is well placed to seize the significant Institutional Retirement opportunity, both in the UK and internationally. The addressable market is significant – only 10% of the c.£6.6tn of Defined Benefit pension assets in the UK, the US, Canada and the Netherlands have so far transferred to insurers.
In the UK, where we are the market leader, volumes are expected to average £45bn per annum over the next decade, up from c£25bn per annum since 2018. Internationally, we have an established position in the US and are growing in Canada and exploring our partner model in the Netherlands. We will continue to pursue a disciplined approach to profitable growth in these markets.
By FY 2028 we expect to:
We are bringing together LGIM and LGC into a single, global asset manager, and investing to scale and deepen their complementary capabilities across public and private markets.
We are committed to driving growth in public markets, creating a scalable global operating platform, driving margin expansion through operating leverage and increasing average revenue margin.
We plan to materially scale our in-house and origination platform capability in private markets, significantly expanding our capabilities and client offerings across Real Estate, Private Credit and Infrastructure, including through an accelerated programme of fund launches.
Michelle Scrimgeour has announced her intention to step down from the role of LGIM CEO, and the Group has begun a global search for a CEO to lead the growth of the combined Asset Management division. Michelle will continue as CEO of the legal entity, LGIM (Holdings) Limited, until this appointment is made, and will lead the transition and establishment of our new division with Laura Mason7, who is appointed CEO of Private Markets. Both will report to the Group CEO.
By FY 2028 we expect to:
We will invest to drive growth in retirement and savings, recognising the opportunities presented by the growth in defined contribution and decumulation assets, and the corresponding customer need for support and guidance.
We will focus on scaling our Workplace platform profitably, leveraging our strong Mastertrust position and opportunities in technology to improve the quality and efficiency of our proposition.
At the same time, we will aim to increase the profitability and capital contribution of our Protection businesses, making better use of technology and AI to improve efficiency and customer experience.
By FY 2028 we expect to:
Non-strategic assets, most materially CALA, will be managed by a Corporate Investments Unit, reporting to the Group CFO, with the goal of maximising shareholder value ahead of potential divestment.
Ed Houghton
Group Strategy & Investor Relations Director
Gregory Franck
Investor Relations Director
Natalie Whitty
Group Corporate Affairs Director
Group Communications
T: +44 (0)7384 435692
Elizabeth Bickham
Head of PR and Communications
Legal & General Investment Management (LGIM)
T: +44 (0)7887 930518
Will Throp
Communications Manager
Legal & General Investment Management
T: +44 (0)7791 899779
Lucy Legh
Headland Consultancy
Established in 1836, Legal & General is one of the UK’s leading financial services groups and a major global investor, with £1.2 trillion in total assets under management (as at FY23) of which c40% (circa £0.5 trillion) is international.
We have a highly synergistic business model, which continues to drive strong returns. We are a leading international player in Institutional Retirement, in Retail Savings and Protection, and in both public and private markets through our Asset Management division. Across the Group, we are committed to responsible investing and dedicated to serving the long-term savings and investment needs of customers and society.
As at 7 June 2024, we estimate the Group’s Solvency II coverage ratio to be 224%.
As at 11 June 2024, Legal & General has a market capitalisation of £14.6 billion.