Legal & General Investment Management (LGIM) has set its sights on being a top ten asset manager in Europe and a top five player on a global level, as it targets the European retail market for the first time.
The group recently climbed to the top of the UK asset manager tables in terms of net sales, according to the Q2 Pridham Report, having jumped from fourth place in Q1 2017.
It reported net retail sales of £1.1bn for the second quarter, a significant increase on the £399m reported in the same period of 2016.
LGIM's head of UK retail sales Simon Hynes said the group is now thinking on a larger scale and wants to be a top ten player in Europe by assets under management and a top five player in the world.
"To be top of the Pridham Report was unbelievable. We are top in the UK, but we are way down in Europe - we need our funds to be in the right offshore wrappers first," he said.
"We want to internationalise the business and are making our first retail sales hires outside of the UK. This will be our first foray into European retail and will be a gradual process."
As part of this push, LGIM has a number of plans to extend its existing institutional range to retail clients in Europe.
Firstly, it plans to bring its Future World fund - currently only available to institutional clients - to the UK and European retail market, with a unit trust set to launch towards the end of the year and the launch date for the ICAV still to be confirmed.
The Future World fund is a multi-factor equity vehicle focusing on companies addressing the long-term financial risks of climate change.
It aims to provide a better risk-adjusted return over the long term using an alternatively-weighted index, while having a climate tilt to give exposure to companies which will benefit from the transition to a low-carbon economy.
The firm is talking to clients about demand for multi-factor strategies, while its single-factor smart-beta funds have been authorised by the Central Bank of Ireland and will be rolled out to the European retail market on an ongoing basis.
LGIM already manages about £30bn in institutional smart-beta vehicles, but until now has not had a retail presence in this area.
In addition, the firm has already launched seven of its existing index funds in ICAV wrappers, and is planning to broaden this range in the future.
Meanwhile, Hynes also feels there is potential for innovation in the retirement space. He noted the introduction of pension freedoms, that came into effect in the 2015-16 tax year, had only had a limited impact on flows so far.
Hynes said: "We have not seen much impact from the pension changes. I think it is all still to come.
"People are going into multi-asset income funds, but there is a need for innovation of products that are specifically designed for this remit."
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