Financial services giant Legal & General plans to increase its investments in digital infrastructure as it looks to boost its commercial property portfolio.
The company announced its interim financial results this morning, showing operating profit of £941m, 2% down on last year but slightly ahead of market expectations.
A provider of pension and asset management services, Legal & General is the second largest institutional investment manager in Europe and manages assets worth £1.2trn. Headquartered in London, it employs over 11,000 people.
Legal & General’s digital infrastructure portfolio
The company’s financial results for the six months to the end of June show that its Legal & General Capital division increased operating profit by 13% compared to the same period of 2022, bringing in £296m.
It said it plans to grow its investment in digital infrastructure as part of its specialist commercial real estate portfolio, which “includes an increasing focus on digital infrastructure, which is critical for both corporations and governments.” Data management “is one of the fastest growing sectors from a structural perspective, and our state-of-the-art data centres are central to meeting this increase in demand,” L&G said.
The company runs its own data centre business, Kao Data, which operates three sites across the UK, and hosts Nvidia’s Cambridge-1 supercomputer at its facility in Harlow, Essex.
“In the first half of 2023, Kao Data, our wholesale data centre platform, has continued to develop its existing three sites as well as announcing a new site in Manchester which will be powered by 100% renewable energy,” L&G said. The new Manchester site, at Kenwood Point, will cost £350m and have space for nine data halls. It is expected to come online in 2025.
Legal & General’s chief executive Sir Nigel Wilson said: “We remain on track to achieve our five-year ambitions and deliver attractive returns for our shareholders.”
Digital transformation at Legal & General
As reported by Tech Monitor, Legal & General is also in the midst of its own digital transformation and is transitioning its internal IT infrastructure away from on-premise servers to a new hybrid cloud environment.
Last month it agreed an enhanced seven-year partnership with Kyndryl, which will see the IT services provider manage the transition.
The deal will “accelerate L&G´s technology transformation agenda”, a statement from the two companies said at the time. it will see Kyndryl install a new on-premises Microsoft Azure hybrid cloud platform from Dell powered by MSFT’s Azure Stack HCI. This will work in tandem with an IBM zCloud mainframe, and it is hoped the new set-up will enable L&G to use more public cloud services in future. It already runs some workloads on Amazon’s AWS platform.
“We see this as a strategic opportunity for Kyndryl and L&G to build on our partnership, leveraging Kyndryl’s deep expertise and experience in providing secure, compliant and resilient compute, mainframe and cloud transformation services,” Mark Hall, group chief technology officer at Legal & General, said.
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