M&G reported a small upswing in its private assets business last year and unveiled plans to allocate more to what it calls a “key component” of its institutional investment strategy. 

Private assets under management (AUM) increased to £74.1bn in the year to 31 December 2024, up from £73.4bn in 2023. Of this total, £20bn is private and structured credit.

M&G’s private assets business consists of private fixed income, alternatives, real estate and infrastructure equity offerings.

It is a “key component of our institutional investment capability, and represents a resilient, high-margin source of revenues,” M&G said in its full-year report.

The financial services group expects its life insurance arm to allocate €500m (£420m) to private assets in future, into its Corporate Credit and Growth funds, according to a presentation accompanying the results.

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The private markets side of M&G has been strengthened recently by its purchase last month of a 70 per cent stake in Stockholm-based private credit firm P Capital Partners (PCP), as well as taking a majority stake (65 per cent) in real estate company BauMont at the end of last year.

PCP has more than €3.8bn (£3.2bn) in assets under management across three private credit strategies, with a particular focus on non-sponsored corporate direct lending.

Meanwhile, M&G reported overall assets under management rose to £345.9bn in 2024, up from £343.5bn a year earlier.

Pre-tax profits were also up, increasing five per cent during the year to £837mn, following a cost-cutting drive. 

“Over the last 12 months, we have delivered strategic and operational momentum with meaningful progress across our three priorities: financial strength, simplification, and growth,” said Andrea Rossi, M&G group chief executive. “This is reflected in our strong financial performance.

“We are now moving into a new phase for the group, where we will deliver sustainable and diversified growth across asset management and life.” 

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In line with this ambition, he announced two new targets for 2025-2027: to grow adjusted pre-tax operating profits by five per cent or more per year, and to generate £2.7bn of operating capital.

Rossi also announced a two per cent increase for the 2024 dividend per share.