Ninety One has reported its first half-yearly outflows in three years, blaming the loss of institutional mandates and a “cautious” investment approach in the adviser channel.
The firm’s interim results for the six months to 30 September, published on Tuesday, revealed a net outflow of £332m during the period.
It noted the loss of a few large institutional mandates from global strategies, due to performance, led to a £736m outflow for the institutional channel, compared with a £1.8bn inflow in 2019.
In addition, it said a “cautious investor approach” in the adviser channel contributed to outflows. The adviser channel reported a £404m inflow during the six-month period, but this was down on £1.4bn in 2019.
The UK business experienced a £766m outflow in the six months to the end of September, while £83m left the Europe business and £1.4bn flowed out of the Americas arm. In the corresponding period in 2019, UK saw net inflows of £46m while the European and American businesses saw inflows of £930m and £784m, respectively.
In the latest results, the Africa business experienced a net inflow of £1.3bn and Asia Pacific reported an inflow of £562m. In 2019, the African and Asia Pacific arms saw a net inflow of £1.1bn and £313m, respectively.
Overall assets under management for the business were £119bn at the end of September, down from the £121bn in the corresponding period in 2019, but up from the £103bn reported on 31 March.
Profit before tax increased by 3% to £94.8m, compared with £91.9m in the previous year. Net revenue decreased 1% to £297.3m, although performance fees increased substantially to £18m.
Ninety One noted investment performance increased improved “significantly”. At the end of September, its one- and three-year outperformance stood at 76% and 70% respectively, compared with 39% and 55% for the year ended 31 March.
Ninety One chief executive Hendrik du Toit (pictured) said: “Although aggregate investment performance has improved, flows were impacted by a few large mandate losses relating to past performance. The initial ‘risk-off’ approach from clients in the adviser channel and lower than usual levels of pipeline visibility in parts of the institutional market affected new business momentum.
“We believe in the considerable long-term opportunity for Ninety One to grow organically. Our strategy is clear and our focus remains on execution.”
