PGIM, the asset management business of Prudential Financial, reported 8% year-over-year growth of assets under management in the year’s second quarter, reaching $1.441 trillion, according to Prudential’s July 30 earnings report.
Newark, New Jersey-based Prudential attributed PGIM’s AUM growth to appreciation in the fixed-income and equity markets, strong investment performance and net inflows. PGIM’s operating income growth was driven by higher asset management fees.
The asset manager reported $3.281 billion in asset management fees, 39% of which came from fixed income, 22% from public equity, 20% from real estate, 13% from private credit and other alternatives, and 6% from multi-asset solutions.
The asset manager recently launched a plan to consolidate its six business units into one unified business.
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“We remain focused on driving sustainable growth by sharpening our strategy, improving our financial performance and fostering a high-performance culture,” Prudential CEO Andy Sullivan said in prepared remarks. “During the second quarter, we made early progress toward achieving these priorities by launching the integration of PGIM’s multi-manager model into a single unified asset management business, including a $1 trillion public and private credit platform.”
In the firm’s earnings call, Sullivan said institutional clients want to work with fewer asset managers and do more with the managers they keep, which influenced the consolidation of PGIM’s business units. “We made this change to improve our competitiveness,” Sullivan said.
Sullivan also said the pension risk transfer market has softened modestly and estimated $30 billion to $40 billion in transaction volume this year, noting that smaller transactions remain strong, but jumbo transactions have slowed down as a result of market volatility and uncertainty. Prudential is one of the largest providers of PRT products.
“There is $3 trillion in untranslated liabilities, funding levels still sit at 105% and from our interactions with plan sponsors, they still have a high desire to transact,” Sullivan said, noting that PRT litigation has also contributed to the slowdown in transaction volume, but volatility and uncertainty are driving the slowdown.
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Tags: Andrew Sullivan, PGIM, Prudential Financial
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