Liontrust saw a fall in assets under management and nearly £5bn in outflows in the year to March 31, with its results posted a day after news broke of its attempt to take over Gam Investments.
The UK asset manager saw AUM drop by 6 per cent in the year to March 31, including acquisitions, according to a trading statement submitted to the stock exchange today (April 19).
Net outflows were £4.8bn for the year, including £608mn related to the termination of a life company advisory agreement for the multi-asset team, and £149mn from the termination of the agreement with Majedie Investments for the global fundament team.
Chief executive John Ions said it had been a “challenging” year for the company, but this was set against a backdrop of “suffering” for UK asset managers.
“The strength of a business and the robustness of its strategy is best demonstrated when it is tested in difficult times.
“Liontrust has shown that the business as a whole is operating well and we will continue to broaden our products and distribution channels while the adherence to process, focus in distribution and strong brand ensure we will emerge well positioned for future expansion.”
However, analysts at Peel Hunt said the results were “disappointing”.
In a note this morning, the research team said: “AUM disappointed and was 6 per cent below our estimate due to higher outflows.”
They added that the firm is attractively valued if it can fulfil its longer-term growth potential, but deal risks and continued outflows remain a concern.
The results come a day after the company announced it had approached the board of Gam Investments with a takeover offer, prompting its share price to drop 3 per cent.
Liontrust said its intention is to combine Gam’s investment management business with its own.
The merger would create a discretionary fund manager with assets under management of £100bn, with Gam’s most recent trading update in October last year showing group assets under management of CHF74.6bn (£66.9bn) and Liontrust reported assets under management and advice of £33.8bn in January this year.
Gam has had a torrid few years, experiencing a 96 per cent drop in share price over the past five years after it was embroiled in the eventual collapse of supply chain business Greensill.
Tim Haywood, who ran Gam’s Absolute Return Bond funds, was suspended in July 2018, eventually being fired. The company’s chief executive officer Alexander Friedman stepped down and the Financial Conduct Authority fined Gam £9.1mn in 2022 for not managing conflicts of interest in the matter.
sally.hickey@ft.com
