Asset management, Asia

£72m
Total IFRS operating profit

Funds under management

Funds under management: 2010 - £51.9bn, +22% on 2009 - £42.4bn

Prudential’s asset management business in Asia manages investments for UKIO and the Asian life companies and has also successfully leveraged these investment capabilities to build a strategically significant and market leading third party funds management business.

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Asia Asset management
  AER CER
  2010
£m
2009
£m
Change
%
2009
£m
Change
%
Retail and institutional business net inflows 1,838 556 231 569 223
Money Market Funds net (outflows)/
inflows (MMF)
(2,053) 1,443 (242) 1,550 (232)
Funds under management 51.9bn 42.4bn 22 47.2bn 10
Total IFRS operating profit 72 55 31 58 24

Business overview

Under the leadership of a new Chief Executive, the team has driven strong improvements in the business.

Investment performance is a key driver of success and for 2010, 68 per cent of our funds outperformed their peer medians or benchmarks1. Accolades received during the year included the PCA Indonesia Equity Open Fund being recognised as ‘Fund of the Year 2010’ in Japan by Morningstar amongst 557 open-ended funds in the domestic market, as well as the PCA China Dragon A-share Equity Fund being named ‘Best fund in overseas equity category’ in Korea’s 2010 MoneyToday – Morningstar Fund Awards. In India and China, funds offered by our joint venture businesses were ranked top-decile by their respective local rating agencies.

The business has been actively implementing its strategy of targeting higher-margin equity and bond asset classes. Third party net inflows of £1.8 billion were driven predominantly by Japan, which saw strong interest for its white-labelled Asia Oceanic High Dividend Equity and its open-ended Indonesian Equity Open funds. In addition, positive bond fund flows resulted from Taiwan and China’s successful new product launches and strong demand for our offshore product range. Money market funds saw net outflows totalling £2.1 billion in 2010, mainly attributed to redemptions in India as a result of tighter liquidity conditions.

Financial performance

Prudential’s Asian asset management business’ total FUM crossed the £50 billion mark for the first time and closed the year at £52 billion which includes a core £25 billion from Prudential Corporation Asia’s life funds, £5 billion of assets from the Group and £22 billion from third-party customers. Compared to 2009, the overall FUM increased by 22 per cent, driven by net inflows of £1.8 billion and a total of £7.7 billion of positive market and currency related movements.

IFRS operating profit from fund management of £72 million is 31 per cent higher than in the prior year. The Funds business remitted a net £33 million of surplus capital to the Group during 2010.

Note

  1. Based on a blend of 1-year and 3-year performance.
 

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