Royal London reports assets under management hitting record high
Asset management giant Royal London reported assets under management reaching record highs in its latest annual results, boosted by buoyant equities market movements and a key acquisition.
Assets under management (AUM) jumped to a record £199bn, up from £173bn the prior year, thanks chiefly to its recent acquisition Dalmore Capital, which brought in £6bn, and market movements which contributed £16.1bn.
Barry O’Dwyer, group chief executive of Royal London, also credited the rise to “dependable flows” in its pensions business, coupled with “huge flows” in its asset management arm, as more clients ploughed capital into money market funds.
Gross inflows rocketed to £42.5bn, while net inflows soared to £4.1bn from £1.0bn, boosted by flows into liquidity funds and a new £4.6bn multi asset mandate with St James’s Place.
Operating profit grew 18 per cent to £327m, supported by higher contributions from its pension channel and its first full year of trading in the bulk purchase annuity (BPA) market.
The board confirmed it will return £199m to eligible share holders in April, taking the total shared since 2007 to over £2bn.
The mutual also broadened its investment offering with the launch of a new stocks and shares ISA aimed at both individual and workplace pensions customers.
Pensions and protections
The group’s Workplace Pension channel saw business sales stay in line with 2024, at £4.5bn, following a significant increase in sales in recent years.
Member numbers swelled to 2.2m, as net inflows reached £2.8bn, reflecting its expanding scheme book.
Its flagship Governed Range attracted net inflows of £2.6bn, while AUM grew 15 per cent to £83bn, up from £72bn the prior year.
The company’s protection arm saw sales increase 17 per cent to £991m, after growth was driven by the improvement of its proposition and a growing share of the market.
The channel paid out 98 per cent of protection claims over the course of the year, totalling £771m.
Royal London also completed 18 buy in transactions during its first year in the BPA market, generating £1.3bn of premiums.
The company’s Irish arm also continued its strong performance , with business sales growing 64 per cent to £448m.
Protection product sales hit £202m, while pension sales doubled to £286m.
O’Dwyer noted that Ireland is a “massive success story”, crediting its attraction to bringing in new technology to the market and branching into pensions, which is driving “top line growth”.
Looking ahead
O’Dwyer confirmed the group is shifting its focus over to the incoming rollout of the Financial Conduct Authority’s ‘Targeted Suport’ scheme in a bid to encourage more people to invest.
He said: “It’s a bridge to financial advice, it helps people do things that they really ought to be doing…they’re a bit nervous and don’t have the confidence to do so.
“We’re strong supporters of targeted support and we hope that it will make a big difference to the market.”
The group will also continue to enhance its digital capabilities, investing £100m over the next three years to build its workplace pension offerings.
He said: “We’ll also continue to build out our wider private assets capability…diversifying more and more. That’s a big focus for us.”