New M&G CEO Rules Out Break-up, Sees Opportunity In Volatility

Andrea Rossi, the investment veteran named as chief executive of M&G on Thursday, has ruled out breaking up one of Britain's best known fund management companies and expects growth despite turbulent markets and a cost of living crisis.

Rossi, who replaces outgoing CEO John Foley next month, told Reuters the company had "specific strengths" to launch market leading products as he sought to silence critics who argue a 154 billion pound ($167 billion) asset management business attached to a 193 billion pound retail and savings division is unwieldy.

"There will be no break-up," he said.

But Rossi, a former head of AXA Investment Managers, will have to deal with a choppy environment for investors, including extreme financial market volatility and rampant inflation, partly due to the impact of the Ukraine conflict.

"These are volatile times and from my perspective, my job is to manage the business well whatever the external environment and help our clients manage further investments responsibly," he said.

But he added: "I think these are opportunities - it is when you will see winners and losers. And clearly, with the strong foundation we have, I see it as being as an opportunity for us."

M&G's assets under management and administration dropped 6% in the first half of 2022 to 349 billion pounds, the group reported in August, although it posted net inflows of cash from clients totalling 1.2 billion pounds over the same period.

But shares have tumbled 26% since then, alongside falls in the broader market. On Thursday, they were down 1.4% to 165.6 pence, having touched their lowest level since late 2020, as worries about the pound and the stability of the UK economy escalate.

The appointment of Rossi, who will earn a base salary of 875,000 pounds plus incentives, has been approved by Britain's financial regulators the PRA and FCA, M&G said.

Foley, who led M&G's split from parent Prudential in 2019, announced his intention to retire in April.

($1 = 0.9209 pounds)