31st Oct 2018 11:46
LONDON (Alliance News) - River & Mercantile Group PLC said Wednesday its first quarter was another period of positive growth, driven by strong net flows despite difficult market conditions due to a range of political and economic factors.
The asset management company's fee earning assets under management increased 3.3% in three months ended September 30 to GBP34.97 billion from GBP33.84 billion at the end of June.
River & Mercantile's net inflows in the first quarter were GBP1.11 billion versus GBP510 million of outflows in the same period a year ago.
The wealth manager warned of a downturn, however.
"While we saw some positive equity returns during the quarter, more notable is the significant losses seen in equity markets since the quarter end," said Chief Executive Officer Mike Faulkner.
Faulkner continued: "We have been advising clients to prepare for a downturn, and it would appear this is at least to some degree upon us. This ability to guide clients on what conditions to expect is central to our strategy as a firm."
The company's mandated assets under management at September 30 was GBP35.39 billion, increased from GBP31.16 billion at the end of the first quarter in 2017.
River & Mercantile's sales in the quarter totalled GBP1.17 billion, with GBP600 million coming from its Equity Solutions divisions. The company's redemptions were GBP638 million.
Faulkner added: "The current weakness in markets will clearly impact absolute returns from our Equities division, however the group is highly diversified and therefore the effect on our overall numbers will likely be more muted than it is for others. We are also well positioned to support our clients during these market conditions, given our ability to offer strategies that seek to manage these risks and even profit from them."
The asset manager said it is continuing to see "high levels" of interest across its client base and its pipeline of new madates continues to be strong.
River & Mercantile expects the "weak" absolute equity returns to affect business but it still believes it remains well positioned to grow.
Shares in River & Mercantile were up 1.0% Wednesday at 295.00 pence each.
Related Shares:
RIV.L