TIDMRIV
RNS Number : 2824X
River and Mercantile Group PLC
29 April 2019
29 April 2019
LEI: 2138005C7REHURGWHW31
River and Mercantile Group PLC
Third Quarter Trading Update
31 March 2019
River and Mercantile Group PLC (R&M), the investment
management and solutions business, today provides a trading update
for the three and nine months ended 31 March 2019.
Summary of the three months ended 31 March 2019:
-- Fee earning AUM/NUM increased by 6% to GBP36.3bn.
-- Gross sales for the period were GBP1.2bn.
-- Net sales for the period were GBP0.5bn, equivalent to 1% of
opening AUM/NUM. We have continued to see demand for Institutional
Equity Solutions and there has been increased pipeline activity in
Fiduciary Management.
-- Investment performance generated GBP1.1bn and was positive across all divisions.
-- Net rebalance and transfers added GBP0.6bn.
-- Performance fees earned in the three months ended 31 March
2019 are estimated to be GBP0.5m from Fiduciary Management.
Summary of the nine months ended 31 March 2019:
-- Fee earning AUM/NUM increased by 7% to GBP36.3bn.
-- Gross sales for the period were GBP4.1bn.
-- Net sales for the period were GBP1.7bn, equivalent to more
than 5% of opening AUM/NUM. This included GBP1.2bn from Fiduciary
Management and GBP1.0bn from Institutional Equity Solutions.
-- The strong investment result during the quarter returns
investment performance to positive territory for the year to
date.
-- Performance fees are estimated to be GBP6.9m, of which
GBP2.0m is from Equity Solutions and GBP4.9m is from Fiduciary
Management.
-- Advisory fees are estimated to be GBP7.5m.
Mike Faulkner, CEO of River and Mercantile, commented:
Having positioned our clients cautiously in previous periods, I
stated in the last trading statement that our macroeconomic signals
indicated that risk assets were likely to provide positive returns.
We therefore adapted our client portfolios accordingly and were
able to capture the market returns for them. This ability to
respond quickly to asset allocation opportunities is one of our key
differentiating capabilities.
This quarter has seen an increase of more than 6% in AUM/NUM.
This is a strong period of growth for the group following the more
challenging conditions in the second quarter. It has been very
encouraging to see the contribution to growth from both investment
performance and net rebalancing.
Investment performance for the period was positive across all
divisions, with Fiduciary Management and Equity Solutions adding
GBP0.6bn and GBP0.4bn respectively. Additionally, we saw positive
flows in Fiduciary Management and a GBP350m inflow into the Group's
Dynamic Asset Allocation fund which now has half a billion of AUM
and a four and a half year track record.
We continue to have a positive outlook for equity markets from
here and the results this period position us well for the final
quarter of our financial year.
Assets Under Management (AUM) and Notional Under Management
(NUM)
AUM/NUM for the three months ended 31 March 2019.
Equity Solutions
----------------------------------
Fiduciary Derivative
GBP'm Management Solutions Wholesale Institutional Total Total AUM/NUM
--------------- ---------------- ---------- -------------- ------ --------------
(AUM) (NUM) (AUM) (AUM) (AUM)
Opening fee earning
AUM/NUM 10,760 18,817 1,438 3,154 4,592 34,169
Sales 640 477 41 86 127 1,244
Redemptions (133) (495) (108) (39) (147) (775)
--------------
507 (18) (67) 47 (20) 469
Net rebalance and
transfers 93 483 - - - 576
Net flow 600 465 (67) 47 (20) 1,045
Investment
performance 624 - 126 309 435 1,059
--------------- ---------------- ---------- -------------- ------ --------------
Fee earning AUM/NUM 11,984 19,282 1,497 3,510 5,007 36,273
=============== ================ ========== ============== ====== ==============
Mandates in
transition (31
March 2019) - 20 - - - 20
Redemptions in
transition (31 March
2019) - - - - - -
Mandated AUM/NUM 11,984 19,302 1,497 3,510 5,007 36,293
=============== ================ ========== ============== ====== ==============
Increase/(decrease)
in fee earning
assets 11.4% 2.5% 4.1% 11.3% 9.0% 6.2%
Increase/(decrease)
in mandated assets 11.8% 2.6% 4.1% 5.0% 4.7% 5.8%
---------------- ---------- -------------- ------ --------------
AUM/NUM for the nine months ended 31 March 2019.
Equity Solutions
----------------------------------
Fiduciary Derivative
GBP'm Management Solutions Wholesale Institutional Total Total AUM/NUM
--------------- ---------------- ---------- -------------- ------ --------------
(AUM) (NUM) (AUM) (AUM) (AUM)
Opening fee earning
AUM/NUM 10,642 18,622 1,887 2,692 4,579 33,843
Sales 1,680 928 172 1,280 1,452 4,060
Redemptions (472) (1,140) (393) (306) (699) (2,311)
--------------
1,208 (212) (221) 974 753 1,749
Net rebalance,
acquisitions and
transfers (260) 872 - - - 612
Net flow 948 660 (221) 974 753 2,361
Investment
performance 394 - (169) (156) (325) 69
--------------- ---------------- ---------- -------------- ------ --------------
Fee earning AUM/NUM 11,984 19,282 1,497 3,510 5,007 36,273
=============== ================ ========== ============== ====== ==============
Mandates in
transition (31
March 2019) - 20 - - - 20
Redemptions in - - - - - -
transition (31 March
2019)
---------------
Mandated AUM/NUM 11,984 19,302 1,497 3,510 5,007 36,293
=============== ================ ========== ============== ====== ==============
Opening mandated
AUM/NUM 10,605 18,616 1,887 2,880 4,767 33,988
Increase/(decrease)
in fee earning
assets 12.6% 3.5% (20.7%) 30.4% 9.3% 7.2%
Increase/(decrease)
in mandated assets 13.0% 3.7% (20.7%) 21.9% 5.0% 6.8%
---------- -------------- ------ --------------
Performance and advisory fees
Performance fees earned in the three months ended 31 March 2019
are estimated to be GBP0.5m, all from Fiduciary Management.
Performance fees earned in the nine months ended 31 March 2019 are
estimated to be GBP6.9m. This includes the previously announced
performance fee from the River and Mercantile UK Micro Cap
Investment Company Limited of approximately GBP2.0m; and
approximately GBP4.9m from Fiduciary Management. Advisory fees
earned in the nine months are estimated to be GBP7.5m.
Notes to editors:
River and Mercantile Group PLC (R&M) is an investment
solutions business with a broad range of services, from consulting
and advisory, to fully delegated fiduciary management and asset
management.
R&M is focussed on creating investment solutions for
institutional pension schemes, insurance and financial
intermediaries.
For further information, please contact:
River & Mercantile Group PLC
Kevin Hayes
Chief Financial Officer
Tel: +44 (0)20 3327 5100
Forward-looking statements
This announcement contains forward-looking statements with
respect to the financial conditions, results and business of the
Group. By their nature, forward looking statements involve risk and
uncertainty because they relate to events, and depend on
circumstances that will occur in the future. River and Mercantile
Group's actual results may differ materially from the results
expressed or implied in these forward looking statements. Nothing
in this announcement should be construed as a profit forecast.
Notes:
Assets Under Management (AUM) represents the assets over which
we act either as a discretionary investment manager on a partial or
fully delegated basis in accordance with an investment management
agreement.
Fee earning AUM/NUM represents amounts on which management fees
and performance fees are charged.
Notional Under Management (NUM) represents the aggregate billing
notional of derivative contracts and is the basis on which
management fees are charged.
Net rebalance and transfers represents the net change in billing
notional values of Derivatives (including Gilts) from existing
client mandates and can increase or decrease based on changes in
the underlying hedging strategies.
The category also represents transfers of client assets between
divisions. The different billing structures between divisions,
including the use of AUM or NUM, means that transfers will not net
to zero.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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