Speirs & Jeffrey helps lift year-end performance at Rathbone Brothers

Rathbone Brothers updated the market on its for the three months ended 31 December on Thursday, reporting that while the final quarter of 2018 reflected weaker investment markets, total year-end funds under management and administration benefitted from its recent acquisition of Speirs & Jeffrey.

The FTSE 250 company said total funds under management and administration as at 31 December were £44.1bn - up 12.8% from the £39.1bn a year earlier.

It noted that the FTSE 100 Index decreased 12.5%, and the MSCI WMA Private Investor Balanced Index fell 7.2%, over the same period.

Net inflows across the group in 2018 totalled £8.5bn, up from £2.1bn year-on-year, which represented 21.6% of opening funds under management and administration - rising from 6% - and included the impact of £6.8bn of acquired funds under management, driven primarily by the acquisition of Speirs and Jeffrey.

Funds under management and administration in investment management were £38.5bn as at 31 December 2018, up 13.9% year-on-year, including £6.4bn of funds related to Speirs & Jeffrey, which was down from £6.7bn.

Underlying net organic inflows in investment management were 3.4% of opening funds under management and administration for the year ended 31 December, rising from 3.0% year-on-year.

In the fourth quarter, funds under management and administration in investment management decreased 6.8% to £38.5bn from £41.3bn, which the board said primarily reflected weaker investment markets.

The FTSE 100 decreased 10.4% and the MSCI WMA Private Investor Balanced Index fell 7.9% during the same period, it noted.

Rathbone Brothers said net organic inflows in investment management during the fourth quarter were higher than expected at £574m, rising from £254m a year earlier, and included a number of discretionary mandates that were expected to be managed for a “relatively short” period.

That represented an elevated annualised rate of net organic growth of 5.6%, up from 3.1%, for the three months ended 31 December.

Funds managed by unit trusts totalled £5.6bn as at period end, up 5.7% on the same time a year earlier, despite the falls in investment markets during the year.

Total net fund inflows of £123m in the fourth quarter of 2018 - down from £272m - reflected a more difficult trading environment for asset managers generally, the board claimed.

Full year net inflows were £543m, down from £883m and representing 10.1% of opening funds under management.

“Work to meet operational performance targets is proceeding well such that the payment of contingent share consideration of 0.6 million new Rathbones shares is now expected to be made in the second quarter of 2019 rather than by December 2019 as previously anticipated,” the Rathbone Brothers board said of its Speirs and Jeffrey acquisition.

It said it was continuing to work well with its colleagues at Speirs & Jeffrey to ensure a smooth transition into the group.

“Whilst market conditions can reasonably be expected to be volatile in 2019, we will continue to invest selectively for the longer term in the skills and infrastructure necessary to improve our operational efficiency and deliver high quality services to our clients,” the directors said of the firm’s outlook.

Rathbone Brothers said it would issue its preliminary statement of annual results for the year ended 31 December on 21 February.