River & Mercantile loses £927mn mandate

River & Mercantile loses £927mn mandate

River & Mercantile has lost a £927mn mandate across several of its global equities strategies.

In a note to the stock exchange this week (February 15), the firm said it had received notice from a client of its equities management business, stating that the client intended to redeem the assets.

The funds represent £2.8mn of R&M’s annualised revenue.

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Alex Hoctor-Duncan, group chief executive, said R&M is an organisation focused on moving forward, delivering high quality active equities and infrastructure fund management to its clients.  

Hoctor-Duncan said: “Losing a client is disappointing, but we are gearing up for several fund launches and will welcome Matt Hudson to run our UK income fund at the end of this month.  

“The motivation of the team is apparent, especially now that we are a specialist equities and real assets focused business."

R&M posted a pre-tax statutory profit of £10.9mn, and total revenue of £74.3mn in 2021, a rise of 5 per cent compared with the year before.

Last week one of the group's founding members, Dan Hanbury, left R&M both as a partner and a portfolio manager.

Hanbury is the portfolio manager of the ES River and Mercantile UK Equity Smaller Companies Fund and the ES River and Mercantile UK Equity Income Fund, which as of December 31 2021 had £674mn and £116mn of assets under management respectively.

The announcement came weeks after the confirmation of R&M’s takeover by AssetCo, a former shell firm run by Martin Gilbert.

On January 25 the £98.8m all share transaction was confirmed, after weeks of speculation.

When the offer was initially touted in November, AssetCo said its directors believed the two firms were “highly complementary” and a combination of the two would create “significant value” for the group’s clients, portfolio managers, employees and shareholders.

AssetCo, which is chaired by Gilbert, said in March last year it was looking to make “strategic acquisitions” and develop the business through M&A.

In June 2021, the firm collected £30.9m to fund this strategy.

Gilbert is also deputy chairperson of R&M but has recused himself from the board while discussions of a takeover take place.