An announcement is expected shortly, ending a lengthy search for an outside replacement for Hugh Jenkins, who stepped down recently at the age of 62.
The move is a coup for Mr Higgs, who was in charge of corporate finance at Warburg during its days as the City's flagship merchant bank, but who is among those of the former establishment who have suffered a loss of influence following the takeover last year by Swiss Bank Corporation.
The corporate finance department, once the envy of the City, has been undergoing a traumatic transformation, with the more aggressive, deal- oriented American-style of SBC displacing the traditional power bases of senior executives such as Mr Higgs.
"I think many people recognise that the time of the Higgses of this world is overdue here. It is a good move for him," an SBC Warburg insider said.
Mr Higgs, 51, takes over this key post at Britain's biggest insurer at a time when fund managers, following the Granada- Forte hostile takeover fight, are again the focus of public criticism for wielding too much influence and being too secretive.
Unlike Mercury Asset Management, whose 14 per cent-plus stake in Forte was credited with swinging the outcome of the bid battle, the Prudential tends not to take big stakes in individual companies, rather spreading its holdings across the FT-SE 100. But the size of the funds at its disposal in the UK, equivalent to nearly 4 per cent of the stock market, makes the Pru one of the most influential shareholders in the land.
The appointment completes a cycle of big change at the Pru, prompted by the unexpected departure early last year of its chief executive, Mick Newmarch, who was himself a former head of PPM. He was replaced by Peter Davies from the publisher Reed Elsevier, an abrasive manager who is shaking up a business that had grown used to seeing itself as more of a national institution than a company. Sir Martin Jacomb moved from Postel, which manages BT and the Post Office's pension funds, to take over as the Pru's chairman.
The search for the replacement for the top investment management job has gone on for months, as the Pru looked for an outside heavyweight with high City standing, who will be able to bolster the insurer's investment fortunes and to handle the increasing demands of investment industry politics as the country's foremost institutional investor is expected to take a more prominent stance on corporate governance issues.
One of the strategic reasons behind the Pru's interest in Gartmore, the UK fund manager up for sale, was that it saw it as a means of solving the Jenkins succession problem, and of bringing greater professionalism to its lacklustre pension fund performance.Reuse content