Tatton posts record inflows despite volatile markets

Tatton posts record inflows despite volatile markets

Tatton Asset Management reported record net inflows for the six months to September 31.

Net inflows for the firm were £907mn, a 39 per cent increase on the same period a year before, with an average run rate of £151mn per month.

However, volatile markets meant overall assets under management were stable at £11.34bn.

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The acquisition of half of the share capital of 8AM Global, announced in April, added £1bn of assets under influence, pushing AUI to £12.3bn, aiding Tatton’s target of achieving £15bn by March 2024.

Tatton’s IFA firms grew to 806, a 15 per cent increase on the figure in September last year, and the number of accounts rose 20.9 per cent to 98,650.

Chief investment officer at Tatton Asset Management, Paul Hogarth (pictured), said while volatile markets were a drag on AUM growth, a combination of net inflows and the acquisition of 8AM allowed it to maintain its ‘roadmap to growth’ strategy of reaching £15bn in AUM.

“As we look forward, while net inflows were very strong in the first six months as we had a number of significant wins which complemented underlying flows, we anticipate net inflows will return to a more normalised level in line with the second half of the prior year and that the Paradigm business will continue to perform well.

“We look forward to making further progress over the rest of the year while remaining mindful of the continuing macro-economic turbulence and market volatility and we remain confident in the group’s longer-term prospects.”

The company said it is anticipating a more uncertain environment in the second half of the year for mortgages.

“At the end of this period and as a result of the September ‘mini’ budget, a significant number of products were withdrawn from the market by lenders, twice the number withdrawn during April 2020, and those lenders that remained active repriced products as interest rates rose rapidly,” it said.

The company said the pressure has since eased somewhat with residential mortgage products being reintroduced at more competitive rates as uncertainty also eased, but the buy-to-let and specialist markets remain difficult. 

“In addition, with the current cost of living crisis and general level of inflation, affordability and resultant lender attitude to risk, it is likely that this will hamper the purchase and mover market, certainly in the short term.”

Pre-tax profit after exceptional items rose to £6.6mn, from £4.8mn a year earlier, and the firm has net cash of £21.6mn on its balance sheet.

The deal to buy half of 8AM's issued share capital cost Tatton £7mn, and included the option to acquire the remainder of the company in due course.

The DFM focuses on MPS and multi-manager funds, adding to Tatton's existing MPS proposition.