Liontrust Asset Management Plc (“Liontrust“, or the “Company“), the specialist independent fund management group, today issues its trading update for both the twelve months ended 31 March 2023 (the “Financial Year“) and the three months ended 31 March 2023 (the “Period“).
Highlights
· Adjusted profit before tax to be ahead of market expectations for the Financial Year and will be not less than £86 million.
· Net outflows of £2.0 billion1 in the Period and £4.8 billion1 for the Financial Year.
· Assets under management and advice (“AuMA“) were £31.4 billion as at 31 March 2023, a decrease of 3.6% over the Period.
· AuMA as at 17 April 2023 were £31.8 billion.
1 Includes £608 million related to the termination of a life company advisory agreement for the Multi Asset team and £149 million related to the termination of the agreement with Majedie Investments Plc (as at 31 January 2023) for the Global Fundamental team.
Commenting, John Ions, Chief Executive, said:
“It has been a challenging year for Liontrust in terms of net outflows and mixed performance for our funds. But this has to be set against a backdrop of the industry in aggregate suffering UK retail net outflows in 10 out of the 12 months last year, according to the Investment Association (“IA“). Despite these headwinds, Liontrust has delivered impressive financial performance.
The strength of a business and the robustness of its strategy is best demonstrated when it is tested in difficult times. Liontrust has shown that the business as a whole is operating well and we will continue to broaden our products and distribution channels while the adherence to process, focus in distribution and strong brand ensure we will emerge well positioned for future expansion.
The Liontrust brand remains strong and will be a key driver of the growth of the business. The brand has risen in the rankings in the UK (to 6th) as well as across the rest of Europe according to Broadridge’s annual survey of asset management brands, which was released in March 2023.
It is a year since we acquired Majedie Asset Management with a final purchase price of £41 million2. Over the financial year, the investment team who joined from Majedie generated performance fees of £12 million, out of a total of at least £17 million for Liontrust as a whole.
The acquisition of Majedie has broadened our investment capability, including in alternative investments and global equity funds. In February 2023, we announced the consolidation of our global investment teams to provide greater focus. This led to the Global Equity team and funds becoming part of the Global Fundamental team, with the former reporting to Tom Record, who is responsible for global equities within the enlarged Global Fundamental team.
Liontrust was honoured to take on the management of the prestigious £1.1 billion Edinburgh Investment Trust through the Majedie acquisition. The end of March 2023 marked the three-year anniversary of James de Uphaugh becoming Portfolio Manager of the Trust, during which time its NAV delivered a cumulative total return of 65.9% against 47.4% by the FTSE All-Share index3. The discount of the Trust has narrowed from 11.5% at 31 March 2020 to 7.5% at 31 March 20233.
Our Multi-Asset range has been refocused and enhanced to continue to ensure it offers vital consistency and meets the suitability requirements of advisers and their clients. The team is currently presenting to advisers at more than 50 venues throughout the UK.
The financial strength of Liontrust, superior brand recognition and disciplined focus on investment processes in a very challenging environment is testament to the strong operating platform of the business. This gives me great confidence about the future of Liontrust.”
2 Excluding deal and restructuring costs.
3 Source: Morningstar. Past performance is not a guide to future performance, investments can result in total loss of capital.
Market expectations
Liontrust announces that it expects revenues and adjusted profit before tax to be ahead of market expectations for the Financial Year. Adjusted profit before tax will be not less than £86 million, driven primarily by stronger than expected performance fee revenues during the Financial Year of at least of £17.0 million (2022: £12.6 million) received across three of our investment teams (Global Fundamental team, Cashflow team and Sustainable Investment team), the Global Fundamental team contributing £11.9 million.