Investors withdrew £323m from funds previously managed by Philip Rodrigs, following his high-profile exit from the firm.
As FTAdviser previously reported, Mr Rodrigs was dismissed from his role as manager of the River and Mercantile UK Smaller Companies fund, and the River and Mercantile Dynamic Equity fund, following a professional conduct matter.
In its trading update for the three months to 31 March, River and Mercantile revealed investors have withdrawn £165m from the Smaller Companies fund, and £158m from the Dynamic Equity fund over the past quarter.
The company revealed fee earning assets under management rose by one per cent to £33bn during the quarter.
The company said investment performance contributed negatively to assets under management during the quarter to the tune of £400m, due to volatility in equity markets.
Mike Faulkner, chief executive of River and Mercantile said: “"Over the period we have seen weakness in equity markets and a consequent rise in volatility.
"We believe this is consistent with what we would consider to be an apprehension phase in the market cycle. As expected, our AUM has been negatively affected by the investment return in our equities business.”
He said part of the company’s response to what it anticipates will be tough market conditions, was the launch in February of the River and Mercantile Global Macro fund, which the company thinks will be a defensive investment.