Market rally is a positive for Rathbone

RATHBONE Brothers yesterday reported a 25 per cent increase in funds under management for 2009 as buoyant equity markets repaired the damage done in the depths of the recession.

Total assets under management climbed to £13.1bn in December, up from £10.5bn a year earlier in the wake of the Lehman Brothers collapse. The 268-year-old firm will recommend paying a second interim dividend in March in place of a final dividend in May.

Rathbone shares closed 5.5 per cent up at 868.5p after brokers reacted positively to the day’s news. Numis maintained its “buy” rating after the firm said 2009 results would be in line with expectations.

The announcement on fund flows came as Rathbone named Mike Webb as the new chief executive of its struggling unit trust business. Rathbone Unit Trust Management was one area where funds slipped, falling from £1bn to £940m due to net redemptions of £234m.

Group CEO Andy Pomfret told City A.M. the firm was taking a defensive stance for the year ahead given the political risk of a hung Parliament. He added: “We are fairly cautious on where markets are going, but that doesn’t mean there aren’t some sectors that will do relatively well.”

Rathbone said plans to migrate discretionary private client portfolios from Lloyds Banking Group were at an advanced stage following a deal last October to buy some of Lloyds’ private banking business. Around 60 per cent of clients have already been transferred.

Several non-executive directors will retire along with outgoing unit trust CEO Peter Pearson Lund, who leaves in March. James Barclay and Mark Robertshaw have been replaced by Kate Avery and Kathryn Matthews.