Legal & General Retirement has invested more than £2bn in direct investments during 2016, it announced today.
The insurer said this was more than double the amount invested last year in assets such as infrastructure, housing and lifetime mortgages.
Notable investments throughout the year included the funding of the new Amazon distribution centre, and the third birth at the London Gateway port.
The firm’s direct investment portfolio now stands at £8.4bn, and makes up about 16% of the assets within the annuity portfolio.
L&G Retirement said direct investment delivers attractive risk-adjusted returns for customer pensions, shareholders, and creates new jobs and economic growth in the UK. It added that lifetime mortgages supported its direct investment activity because they are structured for matching adjustment eligibility under Solvency II.
Legal & General Retirement managing director, Kerrigan Procter, said: “Legal & General plans to invest more funds into direct investment. The speed and the amount could both be increased should Solvency II regulation be amended to allow for more favourable capital treatment for infrastructure investment, than under the present rules. This would be in the interest of customers, shareholders and the UK.”
The firm said annuity sales currently stood at £6.9bn for the year, with total Legal & General Retirement sales at £7.5bn.
Elsewhere, the lifetime mortgage business has now received more than £1bn in applications for 2016, and is on track to complete £600m in sales by the end of the year (£231m, HY 2016).
