Trading Update and Notice of Results

23 July, 2014

River and Mercantile Group PLC

Trading Update

Notice of Results

River and Mercantile Group PLC ("R&M" or the "Company"), the advisory and investment management business that recently listed on the main market of the London Stock Exchange, today provides a trading update of its unaudited statement of Assets Under Management (AUM) and Notional Under Management (NUM) for the three months ended 30th June 2014, together with other unaudited financial information, regarding trading for the fiscal period ended 30th June 20141.

Highlights

• The Company listed on the main market of the London Stock Exchange on 26 th June 2014, with an offer price of 183p per share valuing the business at £150m.

• Fee-earning AUM/NUM has increased by 3% to £17.4bn from 31st March 2014

• Additionally, Net Mandates in Transition total approximately £741m

• Investment performance was £58m primarily from Fiduciary Management, partly offset by negative performance in Equity Solutions

• Performance fees of £1.8m were recorded in the quarter from Fiduciary Management (TIGS). Additional deferred performance fees assuming continued outperformance to 31st December 2014, total £2.9m.

Mike Faulkner, CEO of River and Mercantile, said:

"Completing the IPO in June was a significant milestone for the Group, providing an enhanced platform for future growth opportunities. We continue to focus on delivering strong and sustained investment returns for our clients and the growth of the business to generate value for our shareholders.

"Our investment strategies have generally delivered targeted, outcome-orientated investment performance for our clients. The level of net sales and mandates in transition is a positive indication that the business has performed well and continues to be strongly positioned for growth."

1 R&M (previously P-Solve Limited) completed the merger with River and Mercantile Asset Management LLP (RAMAM) on 27th March 2014. Historically, P-Solve Limited's year end was December 31st and RAMAM's year end was 31st March. Upon completion of the merger, the Group changed its accounting reference date to 30th June, effective from 30th June, 2014. On 26th June 2014 the Group was listed on the London Stock Exchange. Consistent with the change in reporting period, the Group will publish audited consolidated financial statements for the six-month period ending 30th June 2014.

Assets Under Management and Notional Under Management

This Trading Update reports the AUM/NUM for the 3 months ended 30th June 2014, together with the AUM/NUM for the 6 months ended 30th June 2014, of the combined business as if the acquisition of RAMAM was completed on 1st January 2014.

The AUM/NUM flows for the first quarter ending 31st March 2014 were reported in the Trading Update section of the Prospectus issued in connection with our recent listing on the main market of the London Stock Exchange and have been included in the notes section of this release.

Three Months Ended 30th June 2014

At 30th June 2014, fee-earning AUM/NUM was £17.4bn, an increase of 3% from 31st March 2014. Aggregate mandated AUM/NUM was £18.1bn, an increase of 7% from 31st March 2014. Net flows were £319m over the three-month period, led by solid growth in Derivative Solutions (£248m) and Retail Equity Solutions (£143m). Institutional flows in Equity Solutions were negative for the three months ended 30th June 2014, reflecting some portfolio repositioning by clients.

Mandates in Transition totalled £854m for the period, demonstrating a strong pipeline of Fiduciary Management mandate wins, which will transition into fee-earning AUM/NUM over the next three months. Equity Solution Mandates in Transition include £25 million from our strategic partner, Fidante in Australia. Redemptions in Transition in the Fiduciary Management Division of £113m relate to two clients entering the Pension Protection Fund.

Investment performance added £58m, primarily from strong performance from the Total Investment Governance Solution (TIGS) strategy for Fiduciary Management clients. The return seeking component of TIGS was up 3.4% for the three months ended 30th June 2014 with 1.9% out-performance over the liability benchmark.

Advisory fee revenue recorded in the quarter was £2.6m with approximately half from fixed fee retainers.

Performance fees of £1.8m were recorded in the quarter ended 30 th June 2014 from TIGS. At 1 July, 2014, TIGS deferred performance fees that could crystallise, assuming continued out-performance during the six-month period ending 31 st  December 2014, totalled £2.9m.

As at 30th June 2014, total performance fee-eligible AUM in the Equity Solutions Division was £521m. Of these assets, £146m were below their performance benchmark by less than 1%, £276m were above their performance benchmark, of which £41m were in excess of 5% above their benchmark. 

Net management fee margins are within historical ranges. Continued success in raising assets into our Equity Solutions-Retail business may decrease our average retail margins in the future.

Six months ended 30thJune 2014

The table below reports the AUM/NUM for the 6 months ended 30th June 2014, of the combined business as if the acquisition of RAMAM had been completed on 1st January 2014.

Fee-earning AUM/NUM was £17.4bn, an increase of 7% from 31st December 2013. Aggregate mandated AUM/NUM was £18.1bn, an increase of 12% from 31st December 2013. Net flows were positive across all Divisions, although the Institutional flows within Equity Solutions were negative for the period, reflecting some portfolio repositioning by some clients. Retail flows continued well, although slowed at the end of the period. Investment performance added £219m, primarily from strong performance from the TIGS strategy for Fiduciary Management clients. The return seeking component of TIGS was up 5.7% for the six months ended 30th June 2014 with 0.8% out-performance over the liability benchmark.

Mandates in Transition demonstrate a strong pipeline of mandate wins which transition into fee-earning AUM/NUM over the next three months. Redemptions in Transition in the Fiduciary Management Division of £113m relate to two clients entering the Pension Protection Fund.

Advisory fee revenue was £5.4m for the six months ended 30th June 2014, with approximately half from fixed fee retainers.

Market commentary, three months ended 30th June 2014

Continuing favourable monetary policy and optimism for growth in many economies saw global markets advance in Q2 2014. Emerging markets, rebounding strongly after a year or so of drifting, together with Japan, recovered some of the ground they both lost in Q1.

Credit markets continued to advance with spreads slightly tighter. US equity markets set a sequence of new highs with the S&P500 ending the quarter at 1,960. The FTSE100 index once again came within touching distance of its 1999 high but, on each occasion, slipped back without reaching that target.

The MSCI ACWI Index (Global) posted a return of +2.4% and the FTSE All Share (UK) a return of +2.2%. Within this positive equity return, there was a dramatic move away from recent out-performing mid cap equities in search of greater return. This rotation was extreme and caught out many managers.

Investment Performance

Fiduciary Management Division

Within the Fiduciary Management Division, the majority of mandates have an outcome-orientated investment objective to exceed any growth in the value of their specific pension liabilities. With long- dated interest rates falling slightly and inflation expectations unchanged, this growth in liabilities was modest for the period and asset-weighted performance on the return seeking component of TIGS exceeded the liability benchmark by 1.9% in the three month period ending 30th June 2014. This is very satisfactory, given that the outperformance target is 3% per year.

Equity Solutions Division

The performance of a number of the equity strategies was negatively impacted by stock rotation as discussed above particularly over the last quarter, with both the UK and global equity strategies underperforming their benchmarks. Further the general strength in the US equity markets impacted performance of our global equity portfolios, where the Group continues to hold a tactical underweight position driven by valuation concerns.

The medium term (one-year, three-year, five-year and since inception) performance of the Group's UK equity strategies remain significantly above benchmark and relevant peers, whilst the Group's global equity strategies are close to benchmark over the medium term and explicitly positioned for a return- to-favour of the best value equity regions around the world, notably Japan and Europe.

Derivatives Solutions Division

The Group's Derivatives Division performed as expected during the quarter, with low tracking errors for hedging mandates effectively controlling risk for clients.

Notice of Results

River and Mercantile Group will be issuing its audited results for the six-month period ending 30th June 2014 on 4th September 2014 and will host an analyst presentation on that day. For further details of financial calendar dates during 2014, please see www.riverandmercantile.com.

For further information please contact:

Notes:

Three Months, ended 31st March 2014

The following information summarises the Trading Update included in the Group's Listing Prospectus for the three months ended 31st March 2014 for the combined business as if the acquisition of RAMAM had been completed on 1st January 2014.

Fee-earning AUM/NUM was £16.9bn, an increase of 4% from 31st December 2013.

During the quarter, the Fiduciary Management Division's AUM increased from £5.6bn to £5.96bn with £202m of net sales and £109m from positive investment performance during the quarter.

The Derivative Solutions Division's NUM increased to £8.52bn, primarily through net rebalancing of £102.1m.

The Equity Solutions Division, comprising the RAMAM business, increased AUM to £2.4bn from positive net flows of £215m, primarily from retail. Investment performance added £53m. During the quarter, there were institutional net outflows of £29m as clients repositioned their portfolios following strong equity market performance. This was offset by continued positive net flows from retail clients of £244m.

Investment performance remained broadly positive across the asset base. TIGS was up 2.16% and all the Equity Solutions' UK investment strategies performed well, but the Equity Solutions' Global investment strategies underperformed.

The table below shows the movements in AUM and NUM for the three months ended 31st March 2014 for the three of River and Mercantile's four divisions that have discretionary mandates.

Advisory fee revenue recorded in the quarter was £2.8m, with approximately one half from client retainers. Net management fee margins remained stable during the quarter with new mandates originated within historical margin ranges.

Financial Reporting

The audited consolidated financial statements of the Group for the six months ending 30th June 2014 will include the results of the legacy P-Solve businesses, reported under the Advisory Division, Fiduciary Management Division and the Derivatives Solutions Division, for the six months ended 30th June 2014. The RAMAM business, will be reported as the Equity Solutions Division, and will be included for the three month period from the date of acquisition to 30th June 2014.

Notional Under Management (NUM) represents the aggregate notional of derivative contracts and is the basis on which management fees are charged.

Fee Earning AUM/NUM represents amounts on which management fees and performance fees are charged.

'Mandates in Transition' represents the AUM/NUM of mandates which have been awarded by clients and will transition into fee-earning assets. The timing, and ultimate amount transitioned is determined by the client. We report an estimated AUM/NUM for those mandates where there is a high likelihood of the amount being transitioned within the next three months.

'Redemptions in Transition' are redemptions which have been notified by the client, but the AUM/NUM is included in fee-earning assets at period end. The redemption will be included in a future period.

Forward-looking statements

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