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Legal and General is planning to cut jobs in its asset management division following a restructuring earlier this year, as the insurance company attempts to cut costs and boost returns.
Up to 20 investment roles and dozens of support positions will be made redundant, according to people close to the process, one of whom said some employees in these roles would be moved to other positions in the business.
The FTSE 100 company, which employs more than 12,000 people globally, is undergoing a restructuring that was unveiled in June by chief executive António Simões.
A single asset management division has been created that brings together Legal & General Investment Management, the UK’s largest asset manager, and the company’s alternative assets unit, Legal & General Capital, which invests in areas such as infrastructure and clean energy.
Simões said in June that there were opportunities to avoid cost duplication between the two units, but that did not include job cuts. “This is a growth plan and we are investing to expand the business, so this is not about redundancies,” he said at the time.
L&G, which manages more than £1.1tn, is aiming for its asset management business to reach £500mn-£600mn in operating profits by 2028 and is seeking to expand its private markets business from £52bn to £85bn in assets.
The blue-chip company is also looking to expand in the rapidly growing market for corporate pensions deals, where businesses pay insurers to take on their pension liabilities. L&G is targeting up to £65bn of such pension deals in the UK by the end of 2028. However, these deals are unpopular with some investors because of the amount of capital required.
The group said when it announced the restructuring that the investment business head, Michelle Scrimgeour, would step down. Eric Adler was appointed chief executive of L&G’s revamped asset management business in September, having previously led PGIM’s alternatives business.
As part of the restructuring, the company in September sold its housebuilder Cala Homes for more than £1bn to investment groups Sixth Street Partners and Patron Capital.
Simões took over L&G in January, replacing Sir Nigel Wilson, who had led the insurer for more than a decade. Wilson focused on “inclusive capitalism”, channelling investment into building homes, science parks and other infrastructure. Shares in L&G are down more than 12 per cent this year.
Simões was previously chief executive of Banco Santander Spain and regional head of Europe since September 2020. Before this, he was a top banker at HSBC.
“As we set out in our capital markets event in June, asset management is central to our strategy and a future growth engine of the business,” Legal & General told the Financial Times. “We continuously assess and ensure we allocate our resource appropriately, ensuring the business is positioned for growth to deliver for our clients and to meet the financial targets we set out in June.”