COMPANY OF THE WEEK : Prudential
Sunday 14 March 1999
The bid is worth 10 per cent of M & G's total assets, well above the 2.5 per cent to 3.5 per cent seen in recent transactions. "It's a flabbergasting price," said Ben Phillips, a consultant at Boston-based Cerulli Associates, which tracks the global fund-management industry.
Banks and insurers are buying fund managers to profit from growth in personal finance. Prudential's acquisition of M&G gives it a range of unit trusts and personal equity plans designed for retail investors, to sell through Prudential's network of 17,000 independent salesmen and its other direct telephone and banking distribution outlets. M&G sells about half its products directly to the public and the remainder through independent financial advisers.
"Prudential is paying up to get a brand name but it fits into its strategy," said Tim Rees, a fund manager at Clerical Medical Investment Group.
M&G's fund performance, which lagged competitors for several years, improved after a 1997 reorganisation. Prudential has only a small portion of its pounds 128bn under management in unit trusts, although it has been selling its products through new retail channels in the UK to boost sales. It bought Scottish Amicable in 1997 for pounds 2.8bn because it specialised in selling through independent financial advisers.
Prudential also launched Egg,a telephone and computer-based bank, last year. Egg deposits were on track to reach pounds 3bn by the end of February, it said last month. The insurer said it hasn't decided how M&G products will be distributed. The combination of the two companies will generate cost savings of about pounds 10m a year, even though M&G will be run as a separate unit.
- 1 President of Argentina adopts Jewish godson to 'stop him turning into a werewolf'
- 2 Doctors remove 80 teeth from boy's jaw
- 3 The 'Black Museum': After 150 years, public set to see exhibits from police’s grisly crime museum
- 4 Sir Winston Churchill’s family begged him not to convert to Islam, letter reveals
President of Argentina adopts Jewish godson to 'stop him turning into a werewolf'
The 'Black Museum': After 150 years, public set to see exhibits from police’s grisly crime museum
Downfall of Dustin 'Screech' Diamond, the 'Saved By The Bell' star charged with bar stabbing
Syrian teenager Usaid Barho reveals how he escaped from Isis using a suicide vest
Sir Winston Churchill’s family begged him not to convert to Islam, letter reveals
Millions of Britons struggling to feed themselves and facing malnourishment
British actor Idris Elba cannot star as James Bond because he is black, says shock jock Rush Limbaugh
Germany anti-Islam protests: 17,000 march on Dresden against 'Islamification of the West'
Ukip member gets into Christmas spirit with Union Flag plea to Santa 'for our country back'
Nigel Farage: Ukip leader named 'Briton of the year' by The Times
Douglas Carswell tells Ukip to stop blaming foreigners as youth poll shows Nigel Farage is even less popular than Nick Clegg
iJobs Money & Business
Not specified: Selby Jennings: VP/SVP Credit Quant Top tier investment bank i...
Not specified: Selby Jennings: Quantitative Research | Global Equity | New Yor...
Not specified: Selby Jennings: SVP Model Validation This top tiered investment...
Highly Competitive: Selby Jennings: Our client, a leading European Oil trading...