9th Jan 2020 09:32
(Alliance News) - Investment manager Rathbone Brothers PLC on Thursday reported a rise in annual funds under management, but inflows fell sharply.
At the end of 2019, Rathbone had funds under management and administration of GBP50.4 billion, 14% higher than the figure a year prior.
The Investment Management unit increased FUMA by 12% to GBP43.0 billion, with the Unit Trusts business's FUMA rising 32% to GBP7.4 billion.
Net inflows during 2019 were GBP600 million, significantly lower than the GBP8.5 billion recorded in 2018. The 2018 figure included GBP6.8 billion of FUMA from the acquisition of Speirs & Jeffrey Ltd, meaning it was GBP1.7 billion excluding this benefit.
Wealth manager Speirs & Jeffrey was purchased for GBP104 million in the summer of 2018.
Organic inflows in Investment Management fell 13% year-on-year to GBP3.3 billion, though Rathbone said 2019 inflows came despite weak investor sentiment.
Outflows rose 44% to GBP3.9 billion. In the last quarter of 2019, Rathbone quit some lower-margin business after integrating Speirs & Jeffrey, while there also were outflows in some pension and other institutional mandates.
Net inflows in Unit Trusts for 2019 were GBP943 million, nearly double the year before, a performance Rathbone said was "particularly strong".
"Although we continue to expect macro-economic conditions to drive volatility more generally across investment markets in the shorter term, we remain focussed on pursuing the strategic objectives we set out in October," said the company.
In October, Rathbone decided to invest over the next two to three years in growing organically. It is now targeting an underlying operating margin closer to the mid-twenties. In 2018, the underlying operating margin was 29.4%, and has hovered around the 30% mark over the past few years.
Rathbone will release annual results on February 20. Shares were 0.8% higher in London on Thursday morning at 2,146.54 pence each.
By George Collard; [email protected]
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