Michelle Scrimgeour, chief executive of Legal and General Investment Management (LGIM), is to step down as the firm merges its asset management divisions.

LGIM is to merge with Legal and General Capital into one asset management division as part of a strategic overhaul for Legal & General.

Ms Scrimgeour will remain as CEO until her replacement is found. A search for her replacement is already under way.

Legal & General said the merger will help it deliver an operating profit of £500-600m by 2028.

It said the merger into a single, global asset manager would deepen its complementary capabilities across public and private markets and added that it plans to “materially scale” its in-house platform capability.

The other two divisions of the reorganised firm will focus on retirement and retail.

António Simões, group CEO at Legal & General, said: “Our vision is for a growing, simpler, better-connected L&G, focused on three core business divisions, and set apart by our shared sense of purpose and powerful synergies.

“By seizing the opportunity in Institutional Retirement while investing to scale and deepen our capabilities in Asset Management and Retail, we will evolve our business to better address society’s changing investment needs, and shift towards fee-based earnings at higher returns on capital.

"We will make the most of our international business opportunities, with a particular focus on the US.”

The firm also announced a £200m share buyback for 2024, as the first step of its plan to increase returns to shareholders.