The trajectory since then has been mostly upwards, with a recent trading update from the company showing assets of £31.4bn, representing an increase of more than 3,000 per cent in those 13 years.
But despite the trading update stating that it expects profits to be in line with expectations, Liontrust’s share price fell by 14 per cent in the five days to April 21, as investors began to ponder whether the company’s growth, which has to a large extent been driven by acquisitions, can continue amid rising outflows and the unhealthy state of markets.
Additionally, many market participants are wary about the company embarking on yet another acquisition - in this case of Gam, which was announced today.
AUM growth via acquisitions
Much of that AUM growth was bought in through the acquisitions of the open-ended funds business of Alliance Trust and subsequently the UK DFM operations of Architas, and then the Neptune fund house in 2019 and Majedie in 2021.
The aforementioned wealth manager says: “I think John Ions deserves a lot of credit for what he has done there. Liontrust was in danger of slipping into irrelevance and John has fixed that.
“But as an investor, I would be looking at all of the acquisitions so far and asking for proof of concept — do they know how to make those work, is there a strategy behind them — before seeing Liontrust do another acquisition.”
The trading update, which covers the year to the end of March 2023, shows that financial advisers, investment managers and retail clients pulled a total of £3.18bn from Liontrust’s funds during the period, a figure which equates to around £60mn a week.
The total outflows for the period were pushed above £4bn by the £693mn withdrawn from the company by institutional investors in the period and the loss of a £100mn investment trust mandate.
I think John Ions deserves a lot of credit for what he has done there. Liontrust was in danger of slipping into irrelevance and John has fixed thatWealth manager
One of the ironies of the acquisition spree is that, despite all the new teams brought in, just under one-third of the AUM, £11.2bn, is managed by one team within the sustainable investment division, a team that came originally with the Alliance Trust acquisition.
