Joseph Pinto, chief executive of M&G’s asset management division, has downplayed concerns over recent client outflows, saying the group’s long-term strategy and strong investment performance in continental Europe position it well to return to net growth in 2025.
In an interview with Investment Officer, Pinto offered a candid assessment of the 1.9 billion pound (2.27 billion euro) net outflows M&G plc last week reported across its open business in 2024. While the headline figures point to challenges in the UK and South Africa, Pinto argued the result was due to temporary market dynamics rather than structural weakness.
“We are not worried at all,” he said. “The split between asset management and life insurance outflows reflects a moment of transition in the market. We’re already seeing signs of stabilisation and potential inflow recovery.”
UK pensions and South Africa: two fronts of pressure
Yet beneath the overall figures, the sources of pressure—and potential—varied widely by geography. M&G’s UK business continues to face headwinds, particularly from defined benefit pension schemes, which are de-risking in the wake of improved funding positions. Pinto described the UK institutional market as “the most complex” for the firm, but sees growth opportunities in bulk purchase annuities, a market that is becoming a material contributor to M&G’s growth, and defined contribution schemes, “a burgeoning market with growing allocations to private markets where we have strong credentials”.
The other main drag came from South Africa, where M&G has long-standing institutional operations.
“Flows in South Africa mirrored the economic cycle,” Pinto said. “We are confident that we’ve seen the worst in the past.”
Continental Europe delivers
While the UK and South Africa weighed on net flows, continental Europe emerged as a clear growth engine. “We had more than 4 billion euros of net growth in Europe last year,” Pinto said. “Look at Belgium—more than 700 million. Germany, 750 million. The Netherlands, 1 billion. Italy, 1.4 billion. These are markets where our active management approach really resonates.”
The inflows came through a mix of institutional and wholesale channels. “In Germany, it was mixed. In Spain, almost exclusively wholesale. Italy, a lot of wholesale. The Netherlands was almost completely institutional,” he noted. “It’s shows how broad our client base has become.”
At the core of that success is M&G’s high-conviction investment philosophy. “We can be very strong in both segments (institutional and wholesale) because we delivered excellent investment performance last year,” Pinto said. “We were in the top quartiles for over 75 percent of our institutional funds and more than 40 percent of our wholesale funds over three and five years.”
Dutch momentum
In the Netherlands, M&G has already built a substantial business with over 10 billion euros in assets under management, primarily serving institutional investors. “We’ve actively promoted all asset classes,” Pinto said, pointing to strong positioning in European credit, European and Asian Real Estate, alternative credit and impact investing.
Importantly, Pinto signaled that 2025 is already shaping up to be another strong year. “We’ve won significant mandates in 2024 that will be funded in 2025,” he said, referring to the Netherlands in particular. “We expect another strong year in 2025.”
France and Nordics in the spotlight
France is next on Pinto’s list for deeper engagement. “We’d love to see more assets coming from France on the institutional side, but also on the wholesale side,” he said. “So we will be adding resources in France as well, as it has been done in recent years in Germany, Switzerland and Amsterdam.”
M&G has laid the groundwork for an expansion into the Nordics with the acquisition of a majority stake in Stockholm-based P Capital Partners (PCP), one of Europe’s longest-standing direct lenders. PCP, which focuses on tailored lending to mid-sized companies outside the private equity sponsor market, will join M&G’s 90 billion euro private markets platform.
“This is a very important strategic move,” Pinto said. “It gives us a foothold in the Nordics, with a strong origination network and deep relationships in a market where we see long-term opportunity.”
Positioning in a consolidating market
The European asset management industry has entered a new phase of consolidation, with reports this year of merger talks between France’s Natixis Investment Managers and Italy’s Generali, and exploratory discussions between Allianz and Amundi, Europe’s largest asset manager.
While M&G has so far avoided blockbuster combinations, Pinto said the group is well equipped to thrive in this evolving landscape.
“The topic of consolidation has been around for the past 20 years. At least since I have been in the industry, I have always heard about it,” he said. “There are always underlying reasons for deals to happen.”
M&G’s structure, he argued, makes it uniquely positioned.
“We have what it takes. We have a balance sheet. We have a unique business model—almost born that way,” Pinto said. “M&G and Prudential historically, and then M&G plc with the life insurance business in the UK. So when the asset manager wants to grow, we have access to the seed capital we need—as long as we provide the great performance we’ve been delivering to the insurance company. That win-win model makes us quite unique.”
Rather than pursuing transformational mergers, M&G has opted for bolt-on acquisitions to enhance capabilities and expand internationally.
“We’ve been making targeted acquisitions to close product gaps and broaden our European exposure,” he said, citing Baumont Capital in the UK and France and PCP in Sweden.
Alongside bolt-on acquisitions, M&G is launching new strategies in private credit and technology-enabled platforms. “We’re expanding our resources in Europe in direct lending,” Pinto said. “We’re launching CLOs, developing public and private market apps, and continuing to invest in our already strong investment teams—especially in our key target markets.”
Before joining M&G Investments as CEO in 2023, Pinto served for a good three years at Natixis and, before that, 13 years at AXA.