16th Jan 2015 08:08
LONDON (Alliance News) - Currency manager Record PLC Friday said that assets under management equivalents edged up over the course of the the final three months of last year, while it also expects a modest boost to earnings from various mandate changes that are expected to further increase the assets under its care in the coming months.
In a statement, Record said it had USD52.7 billion of assets under management equivalents at the end of 2014, an increase from USD52.6 billion at the end of September that year, as overall net client inflows amounted to USD0.1 billion. The currency manager said that net inflows into passive hedging and currency for return more than offset net outflows from dynamic hedging.
Exchange rate movements alone would have resulted in a USD1.8 billion fall in assets under management equivalents over the quarter, but they were cancelled out by equal movements in the other direction in global stock and other markets.
"We continue to see the return to a more divergent monetary policy environment and hence a more 'normal' currency market environment including the expectation of wider interest rate differentials, and stronger trends - a development that has continued since our last trading update and the subsequent announcement of our interim results," James Wood-Collins, Chief Executive, said in a statement.
"In particular, appreciation of the US Dollar over this period has resulted in strong performance for our US hedging clients," the CEO added. "This may create a more supportive environment for growing our hedging business further in the US, although any procurement processes are still expected to be competitive and lengthy, with the outcome necessarily uncertain."
Record also detailed several mandate changes whose net effect is expected to increase assets under management equivalents by about USD2.0 billion, and to be modestly improve revenue and earnings on an annualised basis.
Record said it has been notified of various mandate changes not taken into account by its assets under management equivalents at the end of 2014. These changes include outflows from dynamic hedging of about USD1.4 billion and inflows into dynamic hedging of about USD0.8 billion, to be charged on a management plus performance fee basis, both of which have been implemented.
In addition, net inflows into passive hedging from new and existing clients of about USD2.3 billion are expected by the end of the current quarter.
Record also said that a new client has signed a multi-strategy mandate, the currency manager's second, which it expects to consist of assets under management equivalents of about USD300 million, also by the end of the current quarter.
During the final three months of 2014, fee rates for all products remained "broadly unchanged" from the previous quarter, Record said.
"Whilst the net impact of these changes on revenues and earnings is only modestly positive, the diversification across clients and product types continues," Wood-Collins said.
Record shares were down 0.9% at 34.31 pence on Friday.
By Samuel Agini; [email protected]; @samuelagini
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