17th Jan 2024 13:27
(Alliance News) - Liontrust Asset Management PLC on Wednesday said it continued to face net outflow pressure in its third-quarter, amid a tricky financial year for the asset manager.
Fresh from its failed tilt at Zurich-listed GAM Holding AG, Liontrust said it is still grappling with stubborn fund outflows, though it did see a rise in assets under management and advice thanks to market performance.
Nonetheless, shares fell 2.9% to 562.00 pence each in London on Wednesday afternoon.
In the financial third quarter ended December 31, assets under management and advice totalled GBP27.81 billion, a rise of 0.6% from GBP27.65 billion from a quarter earlier. The AuM has since shrunk back 2.1% from the December level to GBP27.22 billion as of Friday last week, Liontrust said.
The asset manager suffered GBP1.66 billion worth of net outflows in the third quarter but got a GBP1.83 billion boost to total assets from market and investment moves.
Third-quarter outflows picked up from GBP632 million a year prior. For the whole of the first half of the current financial year, Liontrust had reported net outflows of GBP3.21 billion.
Chief Executive John Ions put the acceleration in net outflows to "the ongoing negative sentiment among investors and the current challenges facing active asset managers".
Ions said managers have not seen an environment as competitive as this one, as they look to "to attract and retain assets".
Peel Hunt analysts Robert Sage and Stuart Duncan described it as a "weak" third-quarter of flows.
"Of greatest note is the larger-than-expected outflows of GBP1.7 billion, the second-largest outflow in Liontrust's quarterly reporting history, and representing 6.0% of opening AUM. As such it was the weakest performance of the UK asset managers under our coverage that have reported to date," the analysts said.
"However, AuM is above our March 2024 estimate of GBP26.2 billion due to positive market movements, and our forecasts, which we are not changing today, appear moderately conservative at this juncture."
Peel maintained its 'buy' rating on the shares, and its 750p price target.
Liontrust said it will bolster its ranks with some senior hires, adding Mark Hawtin with effect in May as head of global growth equities and in April, while Jeremy Roberts becomes head of global distribution. Both Hawtin and Roberts have had time at Zurich-listed GAM Holding AG, which Liontrust had attempted to acquire last year. Hawtin leads GAM's global growth equity team, while Roberts was GAM's global head of distribution.
Kristian Cook has been appointed as Liontrust's head of UK distribution.
CEO Ions added: "We continue to develop the business to ensure it is well positioned to deliver our strategic objectives. This includes the appointment of heads of global growth equities and global distribution (ex-UK), the enhancement of the UK distribution team, expanding our fund offering and a strong focus on client engagement."
Liontrust announced an all-share deal to acquire GAM in May, at the time valuing GAM at CHF107 million, around GBP97.9 million. Liontrust said the offer was equivalent to CHF0.67 per share. GAM shareholders would have had just shy of a 13% stake in the enlarged firm.
However, in August, it admitted the bid had been unsuccessful.
The sternest opposition to the Liontrust buyout of GAM came from French telecommunications billionaire Xavier Niel, through NewGAMe SA. NewGAMe is controlled by Rock Investment, which is itself owned by NJJ Holding, Niel's personal holding company. NewGAMe, alongside Geneva-based wealth manager Bruellan, back in May said Liontrust's offer undervalued GAM.
The opposition at times descended into a feud between Liontrust and NewGAMe. NewGAMe once said Liontrust grew "more desperate by the day". It also accused Liontrust CEO Ions of "more and more aggressive tactics which are bordering illegality".
For its part, Liontrust argued that plans by NewGAM for GAM were "so long on rhetoric and so short on detail".
By Eric Cunha, Alliance News news editor
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