City fund managers bleed assets in last quarter of 2023
Three of the City’s biggest fund managers saw large amounts of their assets withdrawn over the last three months of 2023 – but managed to finish in the green thanks to strong market performance.
Liontrust Asset Management, Rathbones and Brooks Macdonald all suffered outflows over the fourth quarter of the year, the firms revealed in stock exchange notices today.
Liontrust bled £1.7bn over the three months, with every arm of its firm seeing negative flows, but gained £1.8bn in market movement.
The firm’s UK retail funds and managed portfolio services saw the largest outflows, losing £1.4bn, but also provided almost all of the positive market performance over the quarter.
Chief exec John Ions attributed the outflows to “ongoing negative sentiment among investors”, adding that “active managers have never been confronted by such a competitive environment to attract and retain assets”.
The investor exodus comes following Liontrust’s failed £96m attempt to buy Swiss rival GAM last year, which saw only 33.5 per cent of the firm’s shareholders vote in favour of the takeover.
Since the aborted takeover plan was announced, investor money has slowly poured out of the asset manager, with it losing £4.9bn since March of last year.
Meanwhile, Rathbones saw investors withdraw £222m from the firm, which it attributed to investment manager departures from its newly acquired Investec Wealth & Investment arm that occurred prior to the firm’s purchase.
However, market and investment performance gained £4.9bn for the firm, with total funds under management and administration now rising to £105.3bn.
Brooks Macdonald, the smallest of the three, lost only £98m to outflows over the three months, but strong market performance brought in £821m to the firm.
CEO Andrew Shepard credited the gains partially to the firm’s new gilt portfolio service, which saw 44.7 per cent organic growth.
The firm announced in October that it would be making around 55 job cuts to save £4m annually.
Despite their funds under management rising over the quarter, all three asset managers saw their share prices dip this morning, with Liontrust falling 4.5 per cent, Rathbones 4.3 per cent, and Brooks Macdonald down 4.6 per cent.