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			Prudential M&G Asset Management Prudential’s fund management business in the UK is conducted under the umbrella of Prudential M&G Asset Management. The acquisition of M&G Group P.L.C. (M&G) in April 1999 has given us enhanced access to the retail investment market and we are currently carrying out a fundamental reorganisation of our fund management operations. In the UK we will specialise in those areas of fund management where we have unique strengths and competitive advantage – unit trusts, fixed income and pooled life and pension funds. We have therefore entered into discussions, which are now at an advanced stage, to sell our UK institutional segregated balanced and specialist equity business which constitutes around £10 billion of mandates (out of a total group funds under management of £170 billion). At the same time we are bringing Prudential Portfolio Managers (PPM) and M&G together into a unified business. We will combine the investment processes and resources of both in a single new management structure under Michael McLintock as Chief Executive. We have already successfully completed the merger of the fixed income teams (creating the largest fixed interest team in the UK, with funds under management of £33 billion), as well as the two retail administration centres. In addition we are in the process of moving M&G’s life and pensions business to Craigforth under the management of Scottish Amicable. Overseas, PPM’s principal operations in the US and Asia have been re-aligned to report alongside the local operations to maximise the synergies between the investment process and retail product manufacturing and distribution. Prudential Portfolio Managers PPM manages £145 billion worldwide, mostly on behalf of Prudential’s internal clients. Underlying profit for PPM totalled £43 million in 1999, in line with the previous year. PPM’s strong equity weighting helped the Life Fund outperform its competition by an estimated three per cent to four per cent. PPM Property, the UK’s largest property investor with a portfolio valued at over £9 billion, has had a particularly successful year. We made significant investments at Bluewater and Milton Keynes shopping centres and agreed the sale of our entire rural estate to the Duchy of Cornwall. We opened the first building on GreenPark in Reading, our major business park under development, and plan to upgrade and extend the Arndale Centre in Manchester, where our development represents a large part of the city centre redevelopment. PPM Ventures (PPMV) also had an excellent year, delivering strong returns to clients and a record operating profit of £11 million. At the year end, PPMV had invested capital of £600 million, with investments made on behalf of the Life Fund and external pension fund clients. During the year PPMV delivered continued growth in Europe and the Asia-Pacific region with a total of £160 million invested in 13 new private equity transactions in Europe, Asia and Australia. Our London and Paris teams led five European transactions with a combined deal size of £220 million. The Sydney and Hong Kong teams completed eight transactions, including an investment in the management buy-out of Mando Climate Control Corporation, one of the largest private equity deals in Asia in 1999.