Prudential’s new focus
Traditional institutional fund management no longer holds much appeal for Prudential. Earlier this year the UK insurer sold off its pension fund equity business - some £11.5 billion ($18.5 billion) of assets under management - because it was not turning enough profit.
Instead Prudential is putting its focus on higher margin retail business, although it is retaining its institutional fixed income accounts.
Michael McLintock, chief executive of M&G, Prudential's asset management division, says: "We took a view that the traditional balanced and equity pension fund mandates were essentially a very mature business. Given that on a combined basis, PPM and M&G's businesses together barely made a profit, we decided to withdraw from the business because it was taking up a lot of funds under management and obviously delivering an unsatisfactory return."
To spearhead its push into the retail market in Europe Prudential has dumped its old asset management brand of Prudential Portfolio Managers in favour of M&G, the fund manager it acquired in 1999, which was seen as more of a retail house than an institutional one.