M&G Prudential's AUM grew by 13% to £351bn in 2017, as the firm saw record net inflows into M&G and PruFund, primarily driven by new UK and European business.
In the UK and Europe, PruFund sales increased by 36% to £1.2bn over the course of 2017, while M&G saw record net inflows of £17.3bn from external clients.
Overall the firm's asset management business saw £20.5bn of net inflows, with £3.1bn of sales in Asia.
The firm said it had seen "significant contributions" from European investors into the Optimal Income fund, Global Floating Rate High Yield fund and multi-asset range, inaddition to new institutional businesses within its public debt, illiquid credit strategies and infrastructure equity funds.
M&G Prudential's total operating profit was up 10% on the previous year, reflecting 18% growth in the asset management business and 6% growth from the insurance business. The asset management business saw £15.1bn of additional assets from "market and other movements", according to the report.
"In the UK and Europe there is growing demand among customers for managed solutions, savings products that provide better long-term returns than cash, while smoothing out the ups and downs of the market," the report said.
"We meet that need through our PruFund propositions and our comprehensive range of actively managed funds.
"M&G Prudential is well positioned to target this growing customer demand for comprehensive financial solutions and the demerger will enable this business to play an even greater role in these markets."
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