10th Jan 2019 09:07
LONDON (Alliance News) - Wealth manager Rathbone Brothers PLC said Thursday that funds under management and administration benefited from the acquisition of Speirs & Jeffrey Ltd during 2018, but weak markets hurt investment performance in the final quarter of the year.
Shares in the company were down 1.3% at 2,452.00 pence each in morning trade in London.
Rathbone in June agreed to buy Scottish wealth manager Speirs & Jeffrey, paying an initial GBP104 million in cash and stock. It said Thursday it intends to pay a further contingent share consideration of 600,000 new Rathbone shares in the second quarter of 2019, rather than by December 2019 as previously anticipated.
Rathbone's total funds under management and administration as at December 31 stood at GBP44.09 billion, up 13% from GBP39.15 billion a year earlier. Net inflows in 2018 increased to GBP8.47 billion from GBP2.05 billion in 2017 and included GBP6.79 billion of acquired funds under management from Speirs & Jeffrey.
Weak markets resulted in negative investment performance of GBP3.52 billion in 2018, versus GBP2.86 billion in gains in 2017. The FTSE 100 index decreased 13% and the MSCI WMA Private Investor Balanced Index decreased 7.2% over 2018, Rathbone noted.
Rathbone's core investment management division recorded funds under management and administration of GBP38.45 billion on December 31, up 14% from GBP33.78 billion a year ago and including GBP6.4 billion of funds related to the Speirs & Jeffrey deal. However, the December figure was down 6.7% from GBP41.27 billion on September 30.
Net inflows for the unit in the three-month period to December-end were higher than expected at GBP574 million versus GBP254 million, reflecting an elevated annualised rate of organic growth.
The division recorded GBP3.41 billion losses in the quarter due to market movements versus GBP955 million gains made a year ago. The FTSE 100 decreased 10% and the MSCI WMA Private Investor Balanced Index by 7.9% during the same period.
The Unit Trust division recorded funds under management of GBP5.6 billion on December 31, up 5.7% from GBP5.3 billion a year ago. Net inflows totalled GBP543 million for 2018 versus GBP883 million.
"Whilst market conditions can reasonably be expected to be volatile in 2019, we will continue to invest selectively for the longer term in the skills and infrastructure necessary to improve our operational efficiency and deliver high quality services to our clients," Rathbone said in its outlook for the new year.
The company is slated to release its 2018 results on February 21.
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