After a successful 2019, specialist asset manager Liontrust (LIO) chalked up another strong quarter in the first three months of 2020 with total assets under management (AUM) increasing 27% on the previous year to £16.1bn.
Net inflows for the quarter were just shy of £500m while for the year to 31 March they were almost £2.7bn, a 52% increase on the same period a year earlier.
The inflows have continued this month with a net £136m of new money coming in up to 9 April, bring total AUM to £16.8bn. Liontrust shares jumped 4.5% to £10.45.
TOP QUARTILE PERFORMANCE
Key to the firm’s success has been the ‘outstanding’ performance of its funds both over the long term and since the pandemic started in February.
All four funds run by the Economic Advantage team are in the top quartile for performance over one and three years and three funds are in the top quartile over five years.
The UK Micro Cap Fund (GB00BDFYHP14) missed out as it was only launched in March 2016 so it has another year to go before it can qualify for the five-year category.
Meanwhile all eight of the equity and managed funds run by the Sustainable Investment team are in the first quartile over one, three and five years.
The Sustainable Investment team started at Liontrust three years ago, in which time their AuM has more than doubled to over £5bn.
With sustainability rising up the agenda, the firm believes that ‘when we emerge from the lockdown there will be even more focus on investing in companies that contribute to and benefit from making the world cleaner, healthier and safer.’
WOBBLES AT JUPITER
In contrast to the positive news from Liontrust, rival asset manager Jupiter (JUP) - which is in the process of acquiring Merian Global Investors - issued a downbeat trading statement revealing a significant decrease in assets in its most recent quarter, sending the shares down 6% to 203p.
As at 31 March, AUM were £35bn, a decrease of £7.8bn or 18% since December, which the company blamed mainly on ‘market movements’. However, it admitted that there had also been net outflows of £2.3bn during the quarter.
At the same time, AUM at Merian fell by £6.8bn or 30% to £15.7bn, thanks to negative market movements and net outflows of £2.6bn.
LOWERED EXPECTATIONS
As one observer put it, Jupiter has effectively ‘torn up’ its assumptions of growth and cost savings with the Merian takeover.
Rather than generating an operating margin of ‘at least 50%’ and potentially as high as 60% going forward, the company now expects Merian’s operating margin to be ‘not less than 40%’.
This is due to the fall in AUM at Merian, with the run-rate of net fees now expected to be £98m a year compared with £140m.
Its own margin is just above 40% so there will be no uplift to the enlarged group margin.
Jupiter agreed to buy Merian in February for £370m using 95 million new shares with a deferred amount of £20m payable if Merian hit certain performance targets, which it has to be said looks unlikely as things stand.
