L&G still ‘on target’ | Corran raises clean energy fund

Life insurer Legal & General posted an operating profit of £1.67 billion for 2023, below expectations of £1.75bn, but said it was on course to achieve its five-year targets.

The FTSE 100 firm said post-tax profit slumped more than 40% to £457m, down from £783m last year, on the back of a slump in investment performance which dragged on profit across its divisions.

The fall in operating profit was felt most sharply in the Legal and General Investment Management arm, where profit fell from £340m to £274m after a difficult year for markets.

However, the company said it had seen “record new business” in its pension risk transfer business however after a buy-in offensive over the past year, in which it has secured corporate defined benefit pension plans in the UK, the US, Canada and the Netherlands.

New chief executive António Simões said in a statement that the firm was on track to hit its five-year growth plan despite the slowdown in earnings.

“We are on course to achieve our five-year targets, and demonstrated resilience in challenging markets to achieve record new business volumes in pension risk transfer, UK annuities and US protection, increasing our store of future profit,” he said.

Corran invests in heat networks company

Specialist clean energy private equity firm, Corran Capital, based in Edinburgh, has secured £80 million for its second fund, Corran II, dedicated to investments in clean energy and climate-focused companies throughout the UK.

It has acquired a 30% stake in Vital Energi, a heat infrastructure company, to help accelerate the transition to net zero.

The investment will enable Blackburn-based Vital Energi to rapidly scale as an owner and operator of low-carbon heat networks. The company is also targeting new markets, moving at pace into adjacent technologies including solar, battery and heat storage, and electric vehicle charging.  

Vital Energi has offices in London, Glasgow, Hereford and Burton-on-Trent, and has connected more than 100,000 homes to heat network schemes, including those in Glasgow, Manchester, Liverpool, Leeds, Hull and London, working with local authorities and housing associations to tackle fuel poverty.  

Backers of the deal include major institutional investors like Strathclyde Pension Fund and Lexington Partners, representing over $30 billion in assets globally.

Corran has appointed Lucy Graham as a partner in the firm and Andy Low as chief operating officer.

Ms Graham was formerly with private equity group Cairngorm Capital and in leverage finance with Virgin Money. She will work with Vital’s management on new opportunities and to deliver the capital required to accelerate the deployment of renewable heat projects.

Mr Low comes from Glasgow-headquartered venture capital firm SEP. Corran plans to make additional appointments in the next 12 months to strengthen its investment team further.

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