Liontrust suffered £1.6bn in outflows in the most recent quarter, as its business mix “moved out of favour” with market developments, according to analysts.
The asset manager posted the net outflows for the three months to September 30 in a trading statement this morning (October 19), taking its outflows for the second half of its financial year to £2.2bn.
Analysts at Peel Hunt said a mix of the group’s relatively high exposure to UK assets, retail clients, equities and a growth bias to its investment style have provided “short-term headwinds” to the development of its assets under management.
“Liontrust’s business mix has temporarily moved out of favour with market developments,” Stuart Duncan and Robert Sage said.
Some £1.3bn was withdrawn overall from Liontrust’s UK retail funds and model portfolio service in the six months to September 30, with the only part of its business seeing positive net flows the alternative funds, which saw £172mn invested overall.
The company’s assets under management and advice dropped by 5.5 per cent in the six months to £31.7bn.
This follows nearly half a billion in outflows in the three months to March this year, after Liontrust lost the investment mandate on the Verbatim growth funds, which were acquired by Tatton AM in September last year for £5.8mn.
A number of asset managers have seen outflows mounting in recent months as investors pull cash from funds amid a mounting cost of living crisis.
Some £2.9bn was withdrawn from UK equity funds in August according to the IA, in comparison to £1.3bn in inflows the previous year.
John Ions, chief executive of Liontrust, said the world is entering a “new environment” for investors.
“In the future, successful asset managers will be those that excel at distribution, have a strong brand and are innovative at product development for multiple distribution channels, in addition to strong investment management.”
“We have great confidence in our robust investment processes.”
Peel Hunt’s analysts do not expect the company’s net flows to turn positive in the short term.
“Fragile market conditions and economic deterioration lead us to expect that the rate of outflows could slow in [the second half of the financial year], but are more likely to stabilise in [the next financial year].”
Liontrust’s share price, which has crashed by 62 per cent in the year-to-date, dropped 1.7 per cent on the news.
sally.hickey@ft.com
