Spotlight on...

Investment

During the 19th century, the Prudential's investments in stocks and shares were overseen by the whole Board. Stress was placed on absolute security of capital along with good rates of interest, and this conservative approach to investment was maintained until after the First World War. Investment in property had begun in the 1860s, and by 1880 the income from freehold and leasehold estates and properties was significant.

By 1900, total assets amounted to £14,623,627, including large investments in foreign government stocks, railway debentures and shares. There were also sizeable investments in domestic and foreign municipal stocks and bonds such as a £1,250,000 holding in Metropolitan Board of Works stocks.

From the mid 1920s Prudential began to invest in equities, responding to the growing range of promising companies seeking development finance. Among them were many future household names such as Marks and Spencer, Beecham's and ICI. Sometimes Prudential had even closer ties with the companies it had invested in. Guest Keen and Nettlefolds (now known as GKN), benefited from Prudential investment and in 1926 established a Prudential-administered pension scheme for employees.

In the 1930s, Government encouraged institutional investors to support British industry. Prudential responded positively, showing interest in Charterhouse Development Limited, set up to finance promising smaller companies, and investing in Alexander Korda's company London Films, and the construction of Denham Studios.

During the First and Second World Wars opportunities for investment were restricted and Prudential put all of its available resources into issues of government loans. By the end of the Second World War Prudential held £196,988,000 worth of government loans and securities, nearly 47% of its total assets.

London's exclusive and innovative Burlington Arcade was a major addition to Prudential's property portfolio in the 1950s. Agricultural ventures were added to the fold in the 1970s, but this portfolio was eventually sold to the Duchy of Cornwall in 1999. In 1982 Prudential Portfolio Managers was formed to manage Prudential's investments. Prudential had maintained a prominent position in the equity market from the 1950s, and the 1990s saw growth in equity investment, as well as continued investment in multi-million pound property developments. The integration of PPM with Prudential's newly-acquired fund management arm M&G in 2000 brought revitalised investment expertise to Prudential's internal funds, while Prudential Property Investment Managers (PruPIM) continues to manage in excess of £10 billion worth of property.