Prudential PLC plans to merge its money management business M&G Investments with life insurance business Prudential U.K. & Europe, creating M&G Prudential.
The combined business will manage £332 billion ($433 billion) in assets. M&G has £281 billion in assets under management as of June 30, with £149 billion run on behalf of institutional clients.
The combined business will offer strategies under both the M&G and Prudential brands.
The new entity will bring together active investment management under M&G, and Prudential U.K. & Europe's capabilities in retirement savings and liability-driven investing. John Foley, CEO of Prudential U.K. & Europe, become CEO of the merged business. Anne Richards, CEO of M&G, will remain in the role. Ms. Richards will also become deputy CEO of M&G Prudential, alongside Clare Bousfield, CEO of insurance for Prudential U.K. & Europe, said a news release Thursday.
"This is very much about unlocking additional value, increasing the sales of capital-light products in that space … (and) increasing the capabilities of these firms," said Mike Wells, Prudential CEO, at a news conference discussing the parent group's half-year results.
Mr. Wells said there are a number of reasons behind the combination of M&G and the U.K. insurance business, highlighting that "there is a consolidation of fund managers, there is a blurring of the roles between the insurers and the asset management industry … and there's questions about market outlook. We think we have a unique set of skills to unlock even more value in this market." He said the merger comes from a "strength-oriented model."
"We see two addressable markets here: one we're playing in actively with M&G, the other we're playing in passively — by default a bit — with Prudential U.K., and we want to step up our active participation within that." Mr. Wells said the firm is a big believer in active management, and "we're not going to do anything to disrupt that."
Further details about M&G Prudential will be presented at Prudential PLC's investor conference Nov. 16.