Brexit: Prudential could relocate M&G funds due to Britain leaving the EU
Prudential said its UK operations, which includes fund management division M&G, could be hit by Brexit
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Your support makes all the difference.Prudential, the UK’s largest insurer by value, has said it is considering shifting funds from M&G, its assets management business, to Dublin or Luxembourg following UK’s vote to leave the EU.
A tenth of Prudential’s M&G’s £255.4 billion in assets under management are from EU clients.
Anne Richard, the chief executive of M&G, said the decision to move assets will depend on the outcome of UK’s negotiations with the EU.
"What we are trying to do as a business is give ourselves options so we are in a position to react and adapt to whatever negotiations come through over the next year or so regarding Brexit," Richard said.
"We have, at the moment, business domiciled in both Dublin and Luxemburg so both of those would potentially be options for us if we felt that we should have additional funds domiciled in continental Europe," she added.
British insurers were hit hard in the immediate aftermath of the Brexit vote, with share prices tumbling on expectations that the fallout in the broader economy would hurt the firms.
"On Brexit it is a challenge for the whole industry in that we don’t know exactly what form it will take. Will there be fund passporting from the UK to Europe, and vice versa, or not?" Richard said.
The news that Prudential UK operations could be hit by Brexit came as the group released its first half results.
Prudential posted a 6 per cent increase in first-half profit as a jump in earnings at its Asia business helped it to beat analyst estimates and offset lower profits from M&G
M&G’s operating profit declined by 10 per cent to £225 million.
Mike Wells, Prudential’s chief executive, said the group has delivered good progress “in a period of heightened macro-economic, geo-political and investment market uncertainty and volatility”.
He added that Prudential continue to “successfully manage” the effects of markets turbulence in the US and the UK.
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