Legal & General is undergoing significant operational changes, including streamlining its asset management operations and expanding into private markets. The insurer anticipates its group core operating earnings per share to increase by 6-9% in 2025, staying on track to meet its medium-term financial objectives.
Strategic Overhaul
The company is set to unveil a new strategy for its investment arm, focusing on becoming more capital-light, enhancing third-party distribution, and offering more complex investment solutions. These changes aim to boost fee-based revenues and improve cost efficiency.
Asset Management Restructuring
In May, Legal & General merged its index and ETF units, combining £512 billion in assets under management, and announced around 70 job cuts. This move was made to streamline operations and drive margin growth.
Expansion into Private Markets
The insurer has acquired a 75% stake in US-based Proprium Capital Partners, a real estate-focused investment firm with $3.5 billion in assets under management. This acquisition supports L&G’s goal of increasing private market assets under management from £50 billion to £85 billion by 2028.
Capital Redeployment
Following its exit from the US protection market, Legal & General is redeploying capital. In March, the company launched a £500 million share buyback, funded by the $2.3 billion sale of its US life insurance business to Japan’s Meiji Yasuda. This move is part of a broader capital return strategy aimed at boosting shareholder value.
The combination of business simplification, strategic acquisitions, and capital reallocation reflects a broader pivot within L&G – away from traditional balance sheet exposure and toward more scalable, fee-generating businesses that promise stronger returns over time.
