LGIM surpasses GBP100bn in DC assets under management

The business has adapted to market dynamics brought about by the introduction of auto enrolment and pension freedoms

Legal & General Investment Management (LGIM) has passed GBP100 billion in defined contribution (DC) assets under management (AUM).

The business has gone from strength to strength since its foundation in 2003, adapting its operations, products and services to meet the challenges and seismic shifts in market dynamics brought about by the introduction of auto enrolment (2012) and pension freedoms (2015).

LGIM’s close collaboration with schemes and members has been a big driver of its success.

Emma Douglas, Head of Defined Contribution says: Supporting our members through their retirement journeys and giving them the tools they need to help them feel better about their finances has been central to LGIM’s strategy.

She said, investment in technology has played a key role here. Over the past years, LGIM has rolled out a number of initiatives which include video benefit statements, a financial wellbeing hub and an app which gives savers real-time access to employee benefits information including their pension as well as other applications through a single login.

A theme that has continued to come through member feedback, is that savers are interested in building as much as possible in their pots as well as finding out how their investments can make a difference. Our research has shown that 68 per cent of savers would engage in their pensions if they knew it was invested in environmental initiatives. Most recently, LGIM rolled out a pilot with Tumelo, a fintech platform that allows savers to indicate how they would vote on the key issues at the companies they hold in their funds, Douglas said.

LGIM’s DC division has recorded an 18 per cent [as at September 2020] compound annual growth rate over the last seven years, more than doubling its AUM, which stood at a total GBP46.3 billion in 2015.

In particular, total DC AUM increased by more than a third since 2018, driven by strong inflows from bundled and investment-only clients, member contributions from existing and new schemes as well as large asset transitions from other providers.

LGIM now counts GBP102 billion of AUM across 3.9 million DC members which makes LGIM the market leader in the defined contribution space with a 22 per cent market share.