M&G has appointed former Axa boss Andrea Rossi as its next chief executive as the investment giant looks to turnaround its fortunes following years of volatile fund flows and a slump in its share price in recent months.
Rossi, who joins the firm from Boston Consulting Group, will take over the reins on 10 October from outgoing chief John Foley, who announced his retirement in April after seven years at the helm.
The former Axa chief now faces an uphill battle to turnaround the FTSE 100 investor’s fortunes, but in a presentation this morning ruled out a break-up of the firm.
“It is perhaps opportune that I state one option that I will not pursue. And that is a break up of M&G,” he told analysts.
“To suggest otherwise, ignores a fundamental and unique advantage of One M&G. This is how I think about
M&G chair Edward Braham said today Rossi was an “ideal fit” for the firm with a “strong track record of delivering profitable growth”.
“Throughout what was a thorough and exacting recruitment process, Andrea impressed us
with his appreciation of the unique capabilities of M&G, his strong focus on growing M&G,
delivering results for shareholders and his commitment to sustainability,” Braham said.
M&G has around £349bn assets under management and serves more than 800 institutional clients in 28 markets, but has faced a rocky period since its demerger from insurer Prudential in 2018.
The firm is trading down 27.82 per cent since it floated as a standalone firm in 2019 and, like other asset managers, has been rocked by the volatility that has rocked global markets in the wake of Russia’s invasion of Ukraine.
In a trading update on the first six months of the year in June, pre-tax profits at the Lodon-listed investment manager hit £182m at the end of June, down from £327m in the same period last year, as assets under management fell by £21.1bn to £348.9bn.
The firm reversed outflows to post positive inflows of £1.2bn however, which new chief Rossi will be looking to boost in the months ahead.
Analysts warned today however that Rossi will face a bigger challenge in preventing investors from pulling their cash in the months ahead.
“It’s not just a question of attracting new inflows but more about containing redemptions,” Derren Nathan, Head of Equity Research at Hargreaves Lansdown told City A.M..
“As AUM falls, be it market related or due to inflows and outflows, that puts M&Gs own cash flow under pressure which can hurt key solvency ratios.”