The Prudential may have split its racy Asian operations from its UK arm, but the Brit bit remains a complicated beast.
It consists of a straightforward, capital-light fund manager with the M&G brand, but also has a big life insurance business and a booming with-profits product called Prufund.
With its ability to smooth out volatile markets like we’re in now, Prufund has a strong wind behind it. Pensions freedoms help too, meaning folks in their early fifties are pumping nesteggs in by the truckload.
But, where fund management is a capital-light business, insurance requires a chunk of buffer money kept aside to keep regulators happy.
Little wonder that today Bloomberg reports that Schroders has mulled a bid to break the thing up.
When the original split with the Pru was being done, every banker in town was trying to work out if the insurance and asset management arms could be busted apart.
They tried to figure if the fund manager could go into a Schroders or an Abrdn (Mgbrdn?) and the life insurance bit put into a Phoenix or Rothesay.
The ideas all came to nought because the life arm relies heavily on M&G’s asset management business to invest its cash.
Breaking the Gordian knot would be difficult and possibly destroy, rather than create, value.
Schroders has reportedly come to a similar conclusion and abandoned the idea, realising it would be too expensive, especially after the shares rallied post-Covid.
The sum of the M&G parts is still greater than the current share price gives it credit for. As more investors understand that, the higher the shares should go.