Trading Statement

2 November 2020

LEI: 2138005C7REHURGWHW31

River and Mercantile Group PLC

First Quarter Trading Update

to 30 September 2020

River and Mercantile Group PLC (R&M), the asset management business, today provides a trading update for the three months ended 30 September 2020.

Summary

Fee earning AUM increased in the quarter by 2.7% to £45.4 billion.

• Gross sales were £1.4 billion;

• Net flows were £1.1 billion;

• Net flow ratio was +2.6% of opening AUM; and

• Investment performance was £0.1 billion or +0.2% of opening AUM.

James Barham, Group Chief Executive commented:

"It is very encouraging to see continued positive strong gross sales and net flows across the business during what is normally the quietest quarter of our financial year. This builds on the strong and consistent growth in AUM in every year over the last six years and the investments we have already made in our distribution capabilities is clearly beginning to have an impact. We look forward in confidence to the balance of this financial year and maintaining the growth momentum that we have established.

We continue to design and deliver relevant and high-quality investment products and solutions to the market with the launch of our European Equity Fund managed by James Sym and our Sustainable ESG Equity Strategy. The latter was designed to meet specific client needs in our Fiduciary business that is now being made available in product form more broadly to our client base."

Assets Under Management (AUM)

AUM change for the three months ended 30 September 2020

Additional information

We do not anticipate any performance fees will be earned in the three months ended 30 September 2020. Advisory fee revenues for the quarter are estimated to be £2.7 million in line with expectations.

Net rebalance and transfer

Of the rebalance and transfer within Fiduciary Management, £665 million relates to the Group's largest client which, as part of our reappointment following the CMA retender, increased its AUM with the Group without any change in the total annual management fee.

Redemptions in transition

During the three months ended 30 September 2020 three Equity Solutions Institutional clients notified their intention to redeem their holdings during the next three months with a combined AUM of £239 million.

Derivative Structured Equity mandates

Included in Derivative Solutions AUM at 30 September 2020 are £0.7 billion of Structured Equity mandates which will reach their contractual maturity by 31 December 2020. It is unknown at this stage whether these will "roll" as has been the case with the majority of other similar structures.

For further information, please contact:

Simon Wilson

Chief Financial Officer

River and Mercantile Group PLC

Tel: 020 3327 5100

Forward-looking statements

This announcement contains forward-looking statements with respect to the financial conditions, results and business of R&M. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. R&M's actual results may differ materially from the results expressed or implied in these forward-looking statements. Nothing in this announcement should be construed as a profit forecast.

Notes:

Assets Under Management (AUM) represents amounts on which management fees and performance fees are charged across all asset classes managed by the Group. In relation to Derivatives, AUM represents the aggregate billing notional of the derivative contracts on which management fees are charged.

Net rebalance and transfers represents the net change in billing AUM values from existing client mandates and can increase or decrease based on changes in the underlying investment or hedging strategies. The category also represents transfers of client assets between divisions. The different billing structures between divisions means that transfers will not necessarily net to zero.

Net flow ratio represents the aggregate gross sales, redemptions, net rebalance and transfers divided by opening AUM.

LDI refers to Liability Driven Investment which relates to the management of interest rate and inflation risk in the underlying pension liabilities.

S. Equity refers to Structured Equity capabilities which provide strategies to shape the return profile of clients' equity portfolios.