Thursday 9 January 2020 12:34 pm

Rathbone Brothers’ inflows decline sharply despite fund growth

Investment manager Rathbone Brothers has reported a sharp drop in inflows during 2019, despite strong growth in its funds under management.

At the end of 2019 Rathbone had £50.4bn funds under management and administration (FUMA), 14 per cent higher than the previous year. 

Read more: Rathbone Brothers buy Barclays Wealth personal injury business

Net inflows during 2019 were £600m, a significant decline on the £8.5bn Rathbones reported in 2018.

This figure included £6.8bn FUMA gained from the acquisition of Spiers & Jeffrey during that year. Excluding this benefit, Rathbones’ net inflows for 2018 totalled £1.7bn.

Rathbone purchased the Glasgow-based wealth manager for £104m, in a deal that increased its FUMA by 18 per cent.

In today’s update, Rathbones reported a 12 per cent increase in its investment management unit’s FUMA, but organic inflows into the division declined 13 per cent year on year to £3.3bn.

Its Unit Trust business’s FUMA climed 32 per cent to £7.4bn

The company said it “continues to expect macroeconomic conditions to drive volatility more generally across investment markets in the shorter term”, but remains “focused on pursuing the strategic objectives we set out in October”.

Rathbone Brothers warned in October that its profit margins would narrow over the next two or three years as it sought to grow organically, sending its shares sliding.

Read more: Rathbone Brothers’ shares fall as it warns on tighter profit margin

A month later, the investment manager announced the acquisition of Barclays Wealth’s personal injury and court of protection business for an undisclosed sum.

Rathbone Brothers’ shares were down 2.35 per cent at lunchtime.