(Corrects to say Dai-chi will take a stake in M&G in paragraph 7, not that it had already taken it)
By Yamini Kalia
(Reuters) -British insurer M&G missed market expectations for half-year adjusted operating profit on Wednesday due to some one-off charges, despite incurring record net inflows of 2.6 billion pounds ($3.5 billion) in its asset management business.
The company, currently implementing a turnaround strategy, took one-off charges in both its asset management and life insurance units, which masked the 5% growth promised in March, CEO Andrea Rossi told Reuters.
Rossi remained optimistic about the business, citing strong investor interest in European equities as clients shift portfolios amid falling interest rates and improving market conditions.
“It’s like a renaissance of Europe,” he said, echoing other wealth managers, who have enjoyed a boost in client activity after the initial market volatility of April triggered by U.S. trade policies subsided.
M&G shares were down about 1% at 254.3 pence by 0814 GMT. They have risen about 29% so far this year.
Analysts at RBC Capital Markets and Jefferies gave a positive assessment of M&G’s results, noting the company’s growing flows and the expected returns from its partnership with Japanese insurer Dai-ichi Life.
In May, M&G said Dai-ichi would take a 15% stake in the British company, with the partnership expected to deliver $6 billion of new business over the next five years and help M&G grow in Asia.
M&G recorded adjusted operating profit before tax of 378 million pounds for the six months ended June 30, compared with 375 million pounds a year ago.
That came below analysts’ consensus of 398 million pounds, according to a company-compiled poll.
Total net outflows stood at 2.5 billion pounds at the end of the first half of the year, beating expectations of 3.1 billion pounds.
($1 = 0.7402 pounds)
(Reporting by Rishab Shaju and Yamini Kalia in Bengaluru; Editing by Subhranshu Sahu, Mrigank Dhanwiala and Alex Richardson)
