City Round Up: Rathbones Group
18th January 2023
Rathbones Group, the wealth management business with a key operation in Liverpool’s Port of Liverpool Building, said it delivered a further quarter of sustained net inflows, with discretionary and managed net inflows totalling £347m in the fourth quarter of 2022 – an annualised growth rate of 3.1% – at the end of a challenging year for investors.
Discretionary and managed net inflows were resilient in the year at £1.3bn (2021: £1.8bn), representing a growth rate of 2.6% (2021: 4.1%).
Discretionary service net inflows totalled £0.9bn (2021: £1.3bn).
Net inflows into the multi-asset fund range were strong, totalling £0.4bn and equating to net growth for the year of 20% (2021: £0.5bn).
Total funds under management and administration (FUMA) were £60.2bn at 31 December 2022 (31 December 2021: £68.2bn), reflecting continuing net inflows offset by a negative market movement over the year.
£45.1bn in the Investment Management business was down 10.2% from £50.3bn at 31 December 2021, in line with the MSCI PIMFA Private Investor Balanced Index which also decreased 10.2% over the year.
£11.0bn in Rathbone Funds, was down from £13bn at 31 December 2021, with continued market volatility impacting market performance and investor behaviour across the industry. Despite significant outflows across the wider asset management sector, net outflows in the single strategy fund range remained low at £0.4bn in the year, representing 4.5% of opening FUMA (2021: net inflows of £1.2bn).
£4.1bn in Saunderson House, was down from £4.9bn at 31 December 2021, with net outflows of £0.2bn (2021: nil) in line with expectations. The integration of Saunderson House is progressing in line with plan, with new propositions launched during the year beginning to be taken up by clients in the fourth quarter.
There has been successful delivery of the first phases of the group’s digital transformation programme, supporting greater efficiency and improving client and investment manager experiences.
Looking ahead, Rathbones said, while economic uncertainties are expected to prevail into 2023, it will remain focused on client engagement and delivery on its strategic priorities, adding: “Benefits from ongoing investment in our digital capability and wider financial planning propositions will further enable organic growth. Our strong balance sheet and clear direction means we remain well placed to consider inorganic growth opportunities.”
Rae Maile, an analyst with investment bank Panmure Gordon, said: “The company has reported year-end FUM of £60.2bn, ahead of our estimate (£58.9bn) and consensus (£59.2bn) after a particularly strong performance from markets in the final months of the year.
“Our estimates are modestly higher because of that. The issue for us remains the same: In a sector which offers secular growth, does Rathbones offer a more compelling investment opportunity than any of AJ Bell, St James’s Place or Brooks Macdonald? We think not. HOLD.”
Author: Neil Hodgson, Business Reporter, The Business Desk.com
Managing Director, Research Analyst, Financials & Tobacco