Shares in FTSE-250 listed money managers Liontrust and Ashmore slumped on Friday morning after both reported fund outflows over the past three months.
Liontrust saw net outflows of £1.6bn in the last quarter as it prepares to acquire GAM Holding. Its assets under management (AuM) stood at £29.5bn at June 30, a decrease of six per cent from three months before, as the challenging economic environment continued to affect investors.
“The last quarter continued to show the importance and benefits of having a broad product range with diversification across investment styles as well as asset classes,” chief executive Johns Ions commented.
“In a risk-off environment, our strong focus on equities has proved to be challenging, especially when the UK market has been out of favour,” he continued.
Shares in Liontrust were trading over six per cent lower on Friday morning.
However, Ions maintained that the business is in “robust health” despite the current market environment.
Liontrust also provided an update on its proposed acquisition of GAM Holding, a Zurich-listed investment fund. Earlier in the month its shareholders backed the proposed £96m acquisition, which would see the creation of a money manager with over £100bn in AuM.
The acquisition will allow Liontrust to diversify its fund range and expand its client base. All of GAM’s largest markets are in Europe or the US, while Liontrust’s main market is in the UK, meaning there is limited overlap.
Yesterday GAM’s largest shareholder, Silchester International, backed the takeover offer in a boost for Liontrust.
“The support for the proposed acquisition of GAM by Liontrust’s shareholders is a vindication of our belief this deal will accelerate our strategic aims,” Lions said.
Ashmore, which focuses on emerging markets, also saw its AuM drop three per cent in the three months to June. Its shares were trading over 6.5 per cent down.
The outflows came primarily as institutional clients pulled funds from external debt – sovereign debt owed to foreign investors – which saw a 13 per cent fall in AuM.
Mark Coombs, chief executive of Ashmore said: “There remains some global macro uncertainty and certain investors have therefore reduced risk during the quarter. However, Emerging Markets continue to perform well, with support from improving fundamentals such as accelerating GDP growth, falling inflation and the potential for rate cuts, as well as the benefit of a weaker US dollar.”