L&G BEATS PROFIT FORECASTS AMID PUSH INTO PRIVATE MARKETS

Legal & General enjoyed a rise in first-half profits, beating City forecasts, amid a greater push into private credit by its asset management arm. 

Total private markets assets under management (AUM) rose by more than a fifth to £79billion during the period, L&G said, including growth across private credit, real estate and infrastructure funds. 

The group wants to exceed £85billion of private markets AUM by 2028. 

'The continued expansion of private markets demonstrates the growing depth and diversification of the platform,' L&G said. 

The FTSE 100-listed life insurer reported overall core operating profit of £918million, up 7 per cent and around 4 per cent ahead of forecasts of £883million. 

Asset management delivered the standout performance, with fee-related earnings rising by 37 per cent and the cost-income ratio improving by 4 percentage points to 71 per cent, on AUM that reached £1.2trillion. 

It follows a two-year reorganisation by chief executive António Simões to simplify its asset management division and expand into private markets. 

The business declared an interim dividend of 6.24p per share, up 2 per cent and in line with forecasts, and has delivered around £450million of its £1.2billion share buyback. 

It told investors that its annual earnings growth would exceed its medium-term target range as its asset management business delivered a notable improvement. 

Core operating earnings per share increased by 11 per cent to 12.1p, above the top end of its medium-term guidance of six to nine per cent.

Simões said: 'We are making good progress in becoming a simpler, more focused L&G.'

He added: 'We have improved dividend cover by earnings and capital generation. We are pleased to confirm a 2 per cent interim dividend increase as we continue to deliver strong and sustainable shareholder returns.'

The company's retail arm, which sells annuities, posted £198million in profit before tax for the first half, driven by larger contributions from its retail retirement segment and an improved workplace performance.

Workplace defined contribution flows increased to £6.2billion, while retail annuity sales rose 36 per cent to £1billion.

Workplace pensions administered assets rose by 27 per cent year-on-year to £128billion and total UK direct contribution AUM jumped by 23 per cent to £236billion. 

The Financial Times reported in May that L&G was attracting interest from potential buyers after a period of subdued share price performance. 

L&G shares rose 0.17 per cent or 0.50p to 303.30p on Wednesday morning, having risen over 15 per cent in the past year.  

2026-08-05T08:50:18Z