Q: Can you provide an update on net flows for Institutional, Wholesale, and PruFund over the first 2.5 months of 2025? A: Andrea Rossi, Group CEO, explained that the momentum from 2024 has continued into 2025, particularly in international markets. Institutional flows have been strong due to offerings in public equities, credits, and private assets. Wholesale interest remains high, especially in Private Credit and Real Estate. PruFund has seen improved flows, with net outflows halving in the second half of 2024, and this positive trend is expected to continue in 2025.
Q: How are you planning to achieve the GBP230 million cost savings target, and what is the expected new business strain over the next three years? A: Kathryn Mcleland, CFO, stated that the company has reduced its change budget from GBP140 million to GBP105 million and expects to continue spending less on simplification efforts. The new business strain is expected to be between GBP100 million to GBP150 million annually, with flexibility depending on client needs and market conditions.
Q: What is the rationale behind reopening the Life business to new business, and what are the key metrics for BPA value share transactions? A: Andrea Rossi, Group CEO, explained that the reopening was driven by market opportunities and M&G’s strong investment capabilities in fixed income and private assets. The BPA value share transactions offer low strain and high IRR, making them attractive for corporate sponsors and beneficial for M&G’s capital requirements.
Q: How confident are you in reaching the GBP100 billion target for private market assets by 2025, and what role does the Life business play in this? A: Andrea Rossi, Group CEO, expressed confidence in growing the private market franchise due to improved valuations and increased investor appetite. The Life business provides potential seed capital, which is crucial for launching new strategies and scaling up with third-party money.
Q: What are the implications of moving from a 90:10 to a 100:0 profit-sharing model for new With-Profit business? A: Kathryn Mcleland, CFO, stated that the shift simplifies the business model, accelerates capital and cash generation, and emphasizes fee-related earnings. It makes the business easier to understand for shareholders and aligns with M&G’s strategy to optimize balance sheet returns.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
