Legal & General Group PLC's (LSE:LGEN) overhaul plans underwhelmed some in the City who expected new CEO António Simões to take a more aggressive approach with his revamp of the insurer.
Simões, who joined the company in January from Santander, wants to sell the housebuilder Cala, merge divisions, and initiate a £200 million share buyback, aiming for a "simpler, better-connected L&G".
The reorganisation includes combining Legal & General Investment Management with the group's investment unit and selling non-core assets.
The FTSE 100 company also plans to aggressively pursue corporate pension deals, targeting up to £65 billion in the UK by 2028, after completing £13.7 billion globally last year.
Simões emphasised the need to adapt to changing investment needs and shift towards higher returns on capital. The company aims for compound annual growth in core operating earnings per share between 6% and 9% until 2027.
Panmure Gordon, in a short assessment of the announcement, said L&G had probably done 'just enough', but it also noted there may be some disappointment around the dividend growth.
Keeffe, Bruyette and Woods, the investment bank, said in a short note, that the headline figures felt "slightly underwhelming".
"From a quick glance through the material ahead of this morning's presentation, our first thought is that the strategic commentary aligns with many of our expectations and the financials are perhaps on the lower side of what a soft consensus may have expected," it added.
L&G's shares were off 5% at 230.98p following the update.