The demerger of M&G Prudential from its FTSE 100 life insurance parent is set to create a fund management giant that could eventually rival Standard Life Aberdeen — another investment behemoth that has edged away from its insurance heritage.

Prudential announced plans on Wednesday to spin off its UK and European operations to form a separately-listed entity, leaving the insurance parent to focus on Asia and the US. After it is spun out, M&G Prudential will focus on European and UK markets. Prudential has not set out a firm timeline for the restructure.