EquitiesNov 14 2013

Discretionary inflows boost Charles Stanley’s profits

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Charles Stanley has seen a significant increase in its discretionary funds under management in spite of weak markets.

The wealth manager brought in £500m of new money into its discretionary management service, and £800m into the business as a whole, in the six months to the end of September.

The inflows boosted the firm’s total assets by 4.5 per cent to £18.5bn, in spite of negative performance on average from the portfolios in its investment management division during the six months.

The firm said market movements during the period led to a decrease of 0.2 per cent across client portfolios, compared to a 0.2 per cent decrease from the Apcims/WMA Balanced Portfolio index but a 0.8 per cent rise in the FTSE All-Share index in the same period.

The inflows were driven by the firm’s discretionary management and execution-only divisions, while its advisory business shrank, partly as advisory clients switched to either the discretionary or execution-only service.

However, the firm said it was committed to still offering an advisory service.

Funds under management in Charles Stanley’s fund management subsidiary, Matterley, increased by 9.5 per cent during the period, driven by growth across its range of five funds, but particularly the IM Matterley Undervalued Assets fund, whose manager now works at GLG but still runs the fund.

The increase in assets across the business has led to a 17.2 per cent increase in revenues compared to the previous six months as fee income rises, while the firm’s profit before tax has risen by 42.9 per cent to £8m.

The stock market reacted positively to the trading statement and Charles Stanley’s shares are currently up by 6.6 per cent today.