Legal & General Investment Management

Legal & General Investment Management
Name	Legal & General Investment Management
Type	Subsidiary
Industry	Asset management
Founded	1971
Headquarters	London, United Kingdom
Area served	Global
Products	Investment funds, pension services, index funds, liability driven investment
Parent	Legal & General Group

Legal & General Investment Management is a British asset management firm that operates as a subsidiary of Legal & General Group plc. Founded in 1971, it provides investment management, pension solutions, index tracking, and liability driven investment services to institutional and retail clients. The firm participates in global capital markets, engages with corporate governance in public companies, and collaborates with supranational institutions on retirement and infrastructure financing.

History

The firm was established in 1971 amid developments in the London Stock Exchange and the postwar expansion of pension funds such as the National Insurance Act 1946 era occupational schemes. During the 1980s the business navigated regulatory shifts associated with the Big Bang (financial markets) and pension fund reform influenced by the Pensions Act 1995 and the Pensions Act 2004. Expansion through the 1990s and 2000s coincided with growth in passive strategies after innovations linked to the S&P 500 indexing movement and the rise of exchange-traded funds pioneered by entities such as Barclays and State Street Corporation. The firm increased its global footprint during the 2010s, aligning with initiatives from the G20 and the Financial Stability Board on long-term investment and infrastructure. Recent decades saw involvement with major corporate engagement agendas echoed by meetings at COP21 and partnerships with the World Bank and European Investment Bank on green finance.

Corporate structure and governance

The firm is a subsidiary of Legal & General Group plc and is governed under UK corporate law, reporting into parent board committees and executive leadership that interact with the Financial Conduct Authority and the Prudential Regulation Authority. Corporate governance practices reference codes originating from the UK Corporate Governance Code and engagement protocols similar to those used by Glass Lewis and Institutional Shareholder Services. Directors and executives have professional ties to institutions such as the Institute of Directors and the Chartered Institute for Securities & Investment. Ownership structure links to shareholders of the parent listed on the London Stock Exchange and to institutional clients including pension schemes like the Universities Superannuation Scheme and sovereign entities comparable to the Norwegian Government Pension Fund Global in influence on stewardship voting patterns.

Investment strategies and products

The firm offers active equity teams covering regions including FTSE 100 constituents, S&P 500 companies, MSCI World exposures, and emerging market equities often benchmarked to indices like the MSCI Emerging Markets Index. Fixed income capabilities span sovereign bonds issued by issuers such as UK Gilts and US Treasuries, corporate credit in markets dominated by names like JP Morgan and Goldman Sachs, and liability driven investment solutions for defined benefit schemes influenced by liabilities modeled similarly to standards used by the Pensions Regulator. The product range encompasses index funds, passive products comparable to those from Vanguard and BlackRock, multi-asset solutions, real assets including infrastructure and real estate akin to holdings pursued by Brookfield Asset Management and Macquarie Group, and derivatives-based risk management strategies reflecting conventions from the International Swaps and Derivatives Association.

Assets under management and financial performance

Assets under management have been reported alongside peers such as BlackRock, Vanguard Group, State Street Global Advisors, and Fidelity Investments, with AUM influenced by market performance in arenas like the FTSE All-Share and MSCI AC World Index. Performance metrics are monitored against benchmarks maintained by index providers including FTSE Russell and MSCI Inc. and are subject to audit and disclosure practices driven by standards used by Deloitte, PwC, and KPMG. Financial results align with reporting cycles tied to the London Stock Exchange Group calendar and are affected by macro events such as the Global Financial Crisis and the COVID-19 pandemic market shocks that impacted returns across equities and fixed income.

Responsible investing and ESG initiatives

The firm has articulated stewardship policies in line with the UK Stewardship Code and participated in collaborative initiatives including the Task Force on Climate-related Financial Disclosures and the United Nations Principles for Responsible Investment. Active engagement targets corporate governance in companies similar to BP, Shell plc, GlaxoSmithKline, and HSBC. The firm has developed low-carbon and sustainable strategies reflecting frameworks promoted by the Intergovernmental Panel on Climate Change and Green Finance efforts involving the European Investment Bank and national green bond markets such as those pioneered by France and Germany. Proxy voting and shareholder resolutions align with practices used by institutional investors including CalPERS and Norges Bank Investment Management.

Global operations and key markets

Operations span major financial centers including London, New York City, Tokyo, Singapore, and Hong Kong, with market activity in regions like the European Union, the United States, Japan, and China. Cross-border engagements involve regulatory counterparts such as the Securities and Exchange Commission and the Monetary Authority of Singapore. The firm partners with institutional clients across pension markets including schemes influenced by models from Australia and Canada, and co-invests in infrastructure alongside capital providers like European Investment Fund-style entities and development banks such as the Asian Development Bank.

Controversies and regulatory issues

The firm has faced scrutiny comparable to industry peers over topics including stewardship effectiveness raised in parliamentary inquiries involving committees such as the House of Commons Treasury Committee and debates around fiduciary duty akin to litigation involving entities like BlackRock and Vanguard. Regulatory engagement has involved responses to consultations from the Financial Conduct Authority and interaction with enforcement processes used by bodies such as the Pensions Regulator and the Financial Reporting Council. Controversies have touched on proxy voting decisions, climate-related engagement outcomes debated in forums including COP26, and asset allocation choices questioned by institutional clients and campaign groups similar to ClientEarth and ShareAction.

Category:Asset management firms