Advisers turn to River and Mercantile

Advisers turn to River and Mercantile

Advisers invested millions of pounds with River and Mercantile in the final quarter of last year, the first time the fund house has received positive net flows from intermediaries in two years.

A trading update, published to the stock exchange this morning (February 3), showed advisers placed £78m with the firm in the three months to December 31.

Meanwhile advisers pulled £75m over the same period, leaving the firm with net inflows of £3m.

Jame Barham, the group’s chief executive, said this was the first quarter the firm had seen positive net sales from advisers for the first time since Q4 2017.

He said: “This reflects strongly on the team led by David Hanratty who joined the business as global head of distribution last year and demonstrates the clear commitment to invest in the broader distribution capabilities of the group.”

The total assets managed by the company for advised clients was £1.5bn at the end of December. 

Across all of its businesses, River and Mercantile had net inflows of £740m, driven by its derivatives solutions business which had net flows of £785m.

Investment performance lost the firm £161m assets under management, but strong net flows saw its AUM rise from £39.8bn to £42.3bn in the three months.

The company earned £600,000 in performance fees from its investment products and a further £3m from advisory fee revenues.

Mr Barham said: “Our view on markets continues to be positive with our [forecast] indicating stable market conditions. 

“We believe expectations for economic growth will increase and credit conditions strengthen, setting a supportive environment for asset markets in general and equities in particular. 

“Within equities, conditions should favour value style investing, especially given the attractive starting point.”

Value investors focus primarily on the share price and valuation of a company, meaning they typically buy companies trading at below their long-term average valuation and below the valuation of the market as a whole.

The value style of investing has been out of favour for most of the past decade.

River and Mercantile shares have been trading 3.3 per cent per cent lower, at £2.64, since the trading update was released.

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