UK – M&G won 1.4 billion pounds (2.1 billion euros) in fixed income mandates from institutional business, driven by increased asset allocation by pension funds.

The news came as the asset manager’s parent company, insurer Prudential, said it was in a good position to take advantage of “compelling demographic trends”.

“M&G's segregated and pooled fixed income institutional business benefited from increased asset allocation into fixed income by pension schemes, with 1.4 billion pounds of gross new mandates won during the year,” said Prudential in its 2003 earnings statement.

M&G reported an operating profit, including performance related fees, of 83 million pounds in 2003, a rise of 12 million pounds.

In its institutional business, gross fund inflows were
2.6 billion pounds during the year, a six percent increase on 2002. Net institutional fund inflows were 1.2 billion pounds.

External funds under management rose 19% to 24.2 billion pounds “due to a combination of net fund inflows from both retail and institutional clients and market gains on existing funds”.

During the year M&G’s private finance arm was awarded what it said was the first ever European pension fund mandate - from Stichting Shell Pensioenfonds and worth 50 million euros - to invest in leveraged loans.

“In a challenging year for the fund management industry, M&G maintained its good track record of profitable growth and investment performance, increasing its underlying profit by 43% and total funds under management by 12%,” the statement said.

The group also said it was in a good position to benefit from “compelling demographic trends”.

“The influence of changing demographic trends is having a huge impact on our business,” Prudential said. It added that saving for retirement and the management of capital in retirement growing issues.

“Prudential is in a particularly strong position to take advantage of these demographic changes, given our international diversification and financial strength.”

It posted total profits for 2003 the year of 794 million pounds, against 1.13 billion pounds in 2002.