Legal General halts China license, slashes staff, insider reports

25 Mar, 2024

Legal General halts China license, slashes staff, insider reports

British insurer and asset manager Legal & General (LGEN.L) has decided to halt its plan to acquire a China business license and has significantly reduced its onshore workforce, according to two insider sources. This move reflects a trend among global financial institutions adjusting their strategies in response to the uncertain market conditions prevailing in China.

The sources, who have direct knowledge of the situation, revealed that Legal & General (L&G) had intended to pursue a Qualified Domestic Limited Partner (QDLP) license to facilitate the sale of offshore products to Chinese investors as part of its asset management expansion. However, the company, boasting assets under management globally worth 1.2 trillion pounds ($1.53 trillion), has chosen to shelve this plan. Consequently, it downsized its local team from around 10 members to just two individuals last month.

The retained staff will concentrate on managing the offshore assets of Chinese institutional investors, as disclosed by the sources who preferred anonymity due to confidentiality reasons. Although Legal & General refrained from commenting directly on the shelving of the business license and the staff reductions, it emphasized China's significance as a substantial market opportunity for asset management in the long term.

While affirming its commitment to China by maintaining a presence through its representative office and a small team, Legal & General remains actively engaged in expanding its services to existing Chinese clients investing in international markets. This decision by Legal & General, a prominent insurer in the UK, mirrors the broader trend of global financial institutions recalibrating their China-focused strategies amidst economic uncertainties and geopolitical tensions.