Source - Alliance News

Liontrust Asset Management PLC shares fell on Wednesday as the company reported that it is still grappling with stubborn fund outflows, though it did register a rise in assets under management and advice thanks to market performance.

Liontrust shares fell 4.3% to 553.50 pence each in London on Wednesday morning. They hit an intraday low of 546.00p.

In the financial third quarter ended December 31, assets under management and advice totalled £27.81 billion, a rise of 0.6% from £27.65 billion from a quarter earlier. AuM has since shrunk back 2.1% from the December level to £27.22 billion as of Friday last week, Liontrust said.

The asset manager suffered £1.66 billion worth of net outflows in the third quarter but got a £1.83 billion boost to total assets from market and investment moves.

Third-quarter outflows picked up from £632 million a year prior. For the whole of the first half of the current financial year, Liontrust had reported net outflows of £3.21 billion.

Chief Executive John Ions said: ‘Among the drivers of the net outflows in the last quarter, totalling £1.7 billion, were the ongoing negative sentiment among investors and the current challenges facing active asset managers. These challenges include the fact active managers have never been confronted by such a competitive environment to attract and retain assets as is the case now, both from within and outside the sector.

‘But there are still strong long-term tailwinds behind asset management. People’s need to save and invest for the future has never been greater. And equity markets are currently offering the chance to invest in some quality companies at attractive entry points, especially among small and mid-caps. This is perfect territory for active managers, and an opportunity to attract assets.’

Liontrust said it will bolster its ranks with some senior hires, adding Mark Hawtin with effect in May as head of global growth equities and in April, while Jeremy Roberts becomes head of global distribution. Both Hawtin and Roberts have had time at Zurich-listed GAM Holding AG, which Liontrust had attempted to acquire last year. Hawtin leads GAM’s global growth equity team, while Roberts was GAM’s global head of distribution.

Kristian Cook has been appointed as Liontrust’s head of UK distribution.

CEO Ions added: ‘We continue to develop the business to ensure it is well positioned to deliver our strategic objectives. This includes the appointment of heads of global growth equities and global distribution (ex-UK), the enhancement of the UK distribution team, expanding our fund offering and a strong focus on client engagement.’

Liontrust announced an all-share deal to acquire GAM in May, at the time valuing GAM at fr.107 million, around £97.9 million. Liontrust said the offer was equivalent to fr.0.67 per share. GAM shareholders would have had just shy of a 13% stake in the enlarged firm.

However, in August, it admitted the bid had been unsuccessful.

The sternest opposition to the Liontrust buyout of GAM came from French telecommunications billionaire Xavier Niel, through NewGAMe SA. NewGAMe is controlled by Rock Investment, which is itself owned by NJJ Holding, Niel’s personal holding company. NewGAMe, alongside Geneva-based wealth manager Bruellan, back in May said Liontrust’s offer undervalued GAM.

The opposition at times descended into a feud between Liontrust and NewGAMe. NewGAMe once said Liontrust grew ‘more desperate by the day’. It also accused Liontrust CEO Ions of ‘more and more aggressive tactics which are bordering illegality’.

For its part, Liontrust argued that plans by NewGAM for GAM were ‘so long on rhetoric and so short on detail’.

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