Insurance companies and banks are changing their tune over their commitment to asset management, writes Kate Burgess .

Only a couple of years ago many of these institutions insisted that it was a core business.

Now, Lloyds Banking Group, which has owned Insight Investment since it merged with HBOS, is weighing up bids of £150m to £300m from a series of trade and private equity buyers for £70bn of Insight's assets.

That deal, and BlackRock's acquisition of Barclays Global Investors' $1,400bn of passively managed funds for $13.5bn (£8.2bn), has suddenly drawn attention to other asset management businesses, including Legal & General's £260bn in funds under management.

It is understood that several potential buyers have informally expressed an interest in buying LGIM, whose funds are largely passively managed index trackers and fixed-income.

It also has built up a liability-driven investment business akin to Insight's LDI portfolios, which have been Insight's fastest growing business.

There are a number of possible buyers who have expressed an interest in buying insurance-owned asset managers, including Clive Cowdery, founder of Resolution, which raised £600m when it listed in December last year to seed an acquisition.

Tim Breedon, L&G's chief executive, has always said that LGIM was a core business.

But he has also told analysts that the value of LGIM was not fully recognised in L&G's share price.

Shares in L&G have fallen from 100p a year ago to 56p at last night's close, valuing the group at £3.3bn.

A big cash offer might be enough to turn the board's head, say those familiar with the group.

However, they add it is not always straightforward for insurers to sell their investment management arms, not least because it might crystallise a big value added tax bill on funds managed externally.