Prudential weighs up funds move to Dublin

Insurer Prudential has become the latest financial-services group to indicate that it may redomicile some of its funds business from London to Dublin following the UK's vote to leave the European Union.

Such a move would ensure that the insurer’s investment management arm M&G could contribute to distribute its funds throughout the EU on a passporting basis.

Speaking on Wednesday, M&G chief executive Anne Richard told reporters that the investment manager could increase the number of its funds domiciled in Dublin and Luxembourg, depending on the outcome of Brexit negotiations.

“What we are trying to do is . . . give ourselves options so we are in a position to react and adapt,” Ms Richard said. “Dublin and Luxembourg would potentially be options for us if we decide we want to have additional funds domiciled in Europe.”

‘Significant’ net outflows

A tenth of M&G’s £255.4 billion in assets under management are from EU clients and Prudential said on Wednesday that M&G could be hit by Brexit. M&G suffered a 10 per cent drop in operating profit to £225 million in the first half of the year, and the firm said it continued to experience “significant net outflows” in the first half.

M&G said shortly after the Brexit vote that it would build a funds business in Dublin amid fears the British decision to leave the EU would dent its ability to attract investors given its London base. At the time it said existing operations would not be moved out of the UK, but rather funds would in effect be replicated in Dublin for its overseas investors.

Results

Prudential reported a forecast-beating six per cent rise in first-half operating profit to £2.06 billion (€2.4 billion), led by growth in Asia, the firm also said on Wednesday, sending its shares higher.

Prudential, which is also listed in Hong Kong and Singapore, has been focusing on expanding its Asian business.

Analysts had expected operating profit of £1.88 billion, according to a consensus forecast compiled by the company.

The firm posted operating profit of £743 million in Asia, a 15 per cent rise on a year earlier and beating a forecast of £725 million. – (Additional reporting: Reuters)