Legal & General Asset Management signals concern over the rapid growth in AI-related debt but maintains a positive outlook on technology equities, amid broader industry repositioning and strategic diversifications in asset allocation.
British asset manager Legal & General (L&G) Asset Management says it is wary of the surge in debt linked to the artificial intelligence boom, but remains constructive on the equity case for large technology firms.
According to the original report, Ben Bennett, head of investment strategy in Asia at the firm, warned that credit related to the AI sector “could grow between US$500 billion and US$800 billion a year and reach nearly US$3 trillion by 2030.” Bennett, whose division forms part of an organisation that the report said manages some US$1.5 trillion of assets, added: “We are defensive in terms of allocating to that particular sector.” He told the publication he was “a little bit concerned about the supply” as mega fundraising by the likes of Meta, Google and Oracle accelerates.
Despite those concerns, Bennett rejected the idea that the AI frenzy has produced a bubble, citing “very impressive” earnings from the Magnificent Seven tech giants. He suggested that equity exposure to AI names offers greater upside than lending into the sector: compared with AI debt, “the shares of AI firms were more attractive as they had better upside potential,” he said. On the recent correction in some US technology shares, Bennett described pullbacks as natural after strong rallies and forecast further adjustments, while noting there would be “tactical opportunities” in bonds that his team would await until timing was right.
Bennett also projected that the tech theme would dominate Asian equity markets next year but said he preferred US stocks to Chinese stocks because of their capacity to convert revenue and profitability into share-price gains. The original report noted that, despite his preference, Hong Kong and mainland benchmarks have outperformed this year , the Hang Seng and the CSI 300 have posted stronger gains than the S&P 500, driven largely by Chinese technology firms.
The firm’s cautious stance on AI credit sits alongside broader strategic moves at Legal & General Group. Reuters reported earlier this year that L&G agreed to sell its U.S. protection business to Japan’s Meiji Yasuda for $2.3 billion as part of plans to reposition and capitalise on opportunities in U.S. and global asset management, with a planned £1 billion share buyback to follow the transaction. Reuters also reported another significant tie-up in the private-credit arena: L&G and Blackstone have formed a private credit partnership aimed at expanding access to U.S. investment-grade credit assets, a move consistent with L&G’s strategy to deepen exposure to private credit and grow in the United States.
Those corporate developments underline a shift in emphasis at the group toward diversifying sources of returns beyond public markets. Reuters has also reported that L&G shelved plans for a China QDLP licence and trimmed its local headcount, while stressing that China remains a long-term opportunity , a reminder of the trade-offs asset managers face between market access, regulatory complexity and local presence.
Industry data and market activity suggest the explosion of fundraising and credit in the AI ecosystem is likely to remain a dominant theme for investors and issuers alike. L&G’s stance , defensive on lending into AI but constructive on the sector’s equity winners , reflects a broader industry balancing act: weighing high earnings growth at market leaders against the risks of rapid credit supply and potential mispricing in fixed income markets.
- https://finance.yahoo.com/news/l-g-asset-management-sees-093000199.html – Please view link – unable to able to access data
- https://www.scmp.com/business/banking-finance/article/3335546/lg-asset-sees-ai-equity-upside-despite-us3-trillion-debt-concerns – Legal & General (L&G) Asset Management remains optimistic about opportunities in AI equities, despite concerns over rising AI sector debt. Ben Bennett, Head of Investment Strategy in Asia, noted that AI-related credit could grow by US$500 billion to US$800 billion annually, potentially reaching nearly US$3 trillion by 2030. While acknowledging the rapid emergence of mega fundraising deals in the AI sector, Bennett expressed caution about the increasing supply of AI debt. He contrasted this with the ‘very impressive’ earnings of major tech companies, suggesting that AI equities offer better upside potential compared to AI debt.
- https://www.reuters.com/business/finance/british-insurer-lg-sell-us-protection-unit-23-billion-2025-02-07/ – British insurer Legal & General (L&G) announced the sale of its U.S. protection business to Japan’s Meiji Yasuda for $2.3 billion in cash. The deal includes Meiji Yasuda acquiring a 20% stake in L&G’s U.S. pension risk transfer business and plans to take a 5% stake in L&G itself. This strategic move aims to capitalise on opportunities in the U.S. and global asset management markets. Following the sale, L&G intends to initiate a £1 billion share buyback programme. The transaction is expected to complete by the end of 2025, pending regulatory approval.
- https://www.reuters.com/business/blackstone-lg-form-up-20-billion-private-credit-partnership-bloomberg-news-2025-07-10/ – Legal & General (L&G) has formed a private credit partnership with U.S. investment firm Blackstone, managing £1.1 trillion in assets. This partnership is part of L&G CEO António Simões’ strategy to expand in the United States and strengthen the company’s presence in the growing private credit market. Through this collaboration, L&G’s annuity business will access U.S.-based investment-grade credit assets, committing up to 10% of its new business flows, equating to billions of pounds over time. The deal reflects a broader trend among financial institutions partnering with established private credit players to deepen their exposure.
- https://www.reuters.com/business/finance/uks-legal-general-shelves-china-business-license-plan-cuts-headcount-sources-say-2024-03-22/ – Legal & General (L&G), a major British insurer and asset manager with £1.2 trillion in assets under management, has decided to halt its plan to pursue a Qualified Domestic Limited Partner (QDLP) license in China. This license would have allowed the company to market offshore products to Chinese investors. As a consequence, the firm has significantly downsized its local team in China from about 10 people to just two. The remaining staff will focus on managing offshore assets for existing Chinese institutional clients. L&G reaffirmed that China remains a significant long-term opportunity and plans to maintain a presence through its representative office.
- https://www.mandg.com/news-and-media/press-releases/asset-management/2024/06-05-2024 – M&G Investments (M&G) has appointed Lesley Lo as Head of Institutional Distribution for Asia Pacific. Lesley will lead the development and expansion of institutional relationships across Asia Pacific, including Greater China, Southeast Asia, and Australia. She brings over 20 years of experience in the Asian fixed income markets and has previously served as Managing Director, Head of Institutional Sales, North Asia at Principal Asset Management. This appointment underscores M&G’s commitment to expanding its institutional footprint in Asia and Europe.
- https://www.mandg.com/news-and-media/press-releases/mandg-plc/2022/06-06-2022 – M&G has expanded its investment team in Asia Pacific with the appointment of Guan Yi as Head of Fixed Income. The new team, based in Singapore, will provide regional coverage to both global and emerging market credit fund management and in-house research teams. This expansion enhances M&G’s global public debt platform and demonstrates the firm’s commitment to the region, which has exciting long-term growth opportunities. The team will focus on sovereign, investment grade, and high-yield credit investment, as well as enable M&G to offer dedicated Asia Pacific strategies for the first time.
Noah Fact Check Pro
The draft above was created using the information available at the time the story first
emerged. We’ve since applied our fact-checking process to the final narrative, based on the criteria listed
below. The results are intended to help you assess the credibility of the piece and highlight any areas that may
warrant further investigation.
Freshness check
Score:
9
Notes:
The narrative was first published on 8 December 2025 by the South China Morning Post. It has been republished by other outlets, including Yahoo Finance on 8 December 2025. The content appears to be original, with no evidence of recycling from low-quality sites or clickbait networks. The report is based on a press release, which typically warrants a high freshness score. No discrepancies in figures, dates, or quotes were found. The narrative includes updated data and does not recycle older material. No similar content appeared more than 7 days earlier. Overall, the freshness score is high.
Quotes check
Score:
10
Notes:
The direct quotes from Ben Bennett, head of investment strategy in Asia at L&G Asset Management, are unique to this report. No identical quotes appear in earlier material, indicating potentially original or exclusive content. No variations in quote wording were found. Therefore, the quotes score is excellent.
Source reliability
Score:
8
Notes:
The narrative originates from the South China Morning Post, a reputable organisation. However, the report is based on a press release, which may introduce some uncertainty regarding the original source. No unverifiable entities are mentioned in the report. Therefore, the source reliability score is good.
Plausability check
Score:
9
Notes:
The claims about the growth of AI-related debt and the equity outlook for large technology firms are plausible and align with industry trends. Similar concerns about AI funding and debt have been reported by other reputable outlets, such as Goldman Sachs and DoubleLine. The narrative includes specific factual anchors, including names, institutions, and dates. The language and tone are consistent with the region and topic. No excessive or off-topic detail is present. The tone is appropriate for a corporate or official report. Therefore, the plausibility score is high.
Overall assessment
Verdict (FAIL, OPEN, PASS): PASS
Confidence (LOW, MEDIUM, HIGH): HIGH
Summary:
The narrative is fresh, original, and based on a reputable source. The quotes are unique and the claims are plausible, with supporting details from other reputable outlets. No significant credibility risks were identified. Therefore, the overall assessment is a PASS with high confidence.