Investment manager M&G Plc (GB:MNG) announced the appointment of Andrea Rossi as chief executive yesterday — and he dismissed the idea of splitting the asset management business from the retail division.
Rossi is highly optimistic about taking the charge at the company.
M&G’s assets under management (AUM) fell by £21.1 billion to £349 billion in the first half of 2022, due to volatility in the financial markets.
The company’s stock performance has also made the investors worried. Since then, rumours of the company splitting have circulated.
Rossi, who joins the company from Boston Consulting Group, will take charge on October 10, 2022. He brings a vast range of insurance and asset management experience with him, which could benefit M&G during these turbulent times.
He has spent the major chunk of his career with AXA Group (DE:AXA) in multiple senior roles across Europe and other locations. His last role with AXA was as CEO of AXA Investment Managers, where the company saw a growth of 55% in its AUM management under his guidance.
Rossi said, “These are volatile times, and my job is to manage the business well whatever the external environment and help our clients manage further investments responsibly. I think these are opportunities – it is when you will see winners and losers. Clearly, with the strong foundation we have, I see it as being an opportunity for us.”
Rossi will replace John Foley, who is retiring from the company after seven years. However, Foley will stay with the company in an advisory role until the year’s end for a smooth transition.
After the announcement, the stock was trading 4.6% lower yesterday. In the last five days, the stock has lost around 15%, mainly due to the weaker pound and sharp increase in interest rates.
M&G share price forecast
According to TipRanks’ analyst consensus, M&G stock has a Hold rating.
The average price target is 280.45p, which implies an upside potential of 75.3%. The analyst price target has a high and low forecast of 338.8p and 197.4p, respectively.
Conclusion
Rossi has joined the company during a difficult time when the UK insurance market is facing pressure from intense market volatility and rising inflation.
The shareholders and the analysts await whether he will be able to repeat his success at AXA in the current environment or not.
