Ninety OneMay 17 2023

Ninety One's AUM and flows decline after 'tough time'

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Ninety One's AUM and flows decline after 'tough time'
(ANDY RAIN/EPA-EFE/Shutterstock)

Ninety One saw its assets under management decline last year, with UK clients pulling £2.3bn out of the company’s funds.

The group saw its assets under management decline 10 per cent to £129.3bn in the year to March 31.

Net outflows were £10.6bn, compared with net inflows of £5bn the year before, and were concentrated in the second half of the year.

The company said more than half of the annual net outflows were driven by the asset allocation decisions of three clients, though all still remain clients of the firm. 

Pre-tax profit dropped 20 per cent to £212.6mn.

The majority of outflows were from clients in the Asia Pacific region, who withdrew £4.7bn.

This was followed by UK clients who redeemed £2.3bn on a net basis, which the company said were driven by the impact of collateral calls during the LDI panic last year, and the further de-risking of defined benefit pension pots. 

In Europe and the Americas, which saw net client redemptions of £1.5bn and £954mn, the outflows were from client reallocations and re-risking, the company said.

Ninety One “regrettably” mentioned the deterioration of economic prospects in its original home market, South Africa, where it has a substantial business. 

The country has been suffering from rolling blackouts and political unsteadiness for months, and at one point the army was deployed to quell a “national shutdown” planned by a radical opposition party.

These circumstances have impacted our results, in particular, our net flows,” Ninety One said.

Chief executive of Ninety One, Hendrik du Toit, said: “Our industry global has had a pretty tough time if you were in the long-only space.”

He highlighted his concerns over the ongoing negotiations in the US to raise the debt ceiling.

The Congressional Budget Office last week warned there is a “significant risk” that the US government will be unable to pay all of its obligations by June if the ceiling is not raised.

“If they behave responsibly in Washington we can see the rebuilding of the global economy,” Du Toit said.

Analysts at Peel Hunt said the results were "respectable", but the flows and cautious outlook statement are likely to inhibit share price performance.

"Good long term value but no short term catalyst."