Tatton Asset Management has enjoyed a 35% boost in assets under management over the last year but taken a chunky hit to profits.
Total assets at the on-platform DFM and IFA support business rose by £2.3bn in the year ended 31 March 2021 from £6.7bn to £9bn. This was driven by organic net inflows of £755m and strong market performance, which brought in £1.6bn. Currently AUM stands at around £9.5bn.
Despite its double digit asset growth profit before tax plunged 40% during the 12-month period, shrinking from £10.3m in 2020 to £7.3m in 2021, after incurring exceptional costs and share-based payment charges.
However adjusted operating profit increased 25.6% to £11.4m, while group revenue increased by 9.3% to £23.4m.
See also: Tatton AM sees assets near £8bn as it rebounds from Covid hit
Tatton on the look out for M&A deals
Speaking to Portfolio Adviser Tatton CEO Paul Hogarth (pictured) said he is “pleased” with the firm’s trajectory.
“The DFM MPS base is maturing nicely, the amount of assets going onto these platforms is increasing all the time and the outsource that we’ve been talking about for many years is becoming a compelling proposition for these IFAs.”
Looking ahead Hogarth said Tatton is hoping to keep growing organically but would also be pursuing M&A and strategic partnership deals.
Tatton is targeting AUM of £15bn in 3 years, with organic growth of £1bn per year and M&A activity of £3bn, with £1.6bn already in the pipeline.
The firm came close to acquiring £5.5bn of funds from an unspecified company in the first half of the year but was ultimately unsuccessful.
However, it said its ambition for “acquisitive growth remains undimmed, either through funds, entities or joint ventures that are value creating and fit with the strategic direction of the group”.
Growing demand for ethical and passive portfolios
Elswhere Tatton said its ESG proposition has continued to grow strongly over the period. Assets in its ethical portfolios ballooned by 141% to £441m and now account for 5% of its total AUM.
It also highlighted increased flows into the Tatton Tracker Portfolio range on the back of strong outperformance of growth and momentum assets during 2020 as market capitalisation weighted investment exposures appeared superior.
Tatton saw an increase in the number of adviser firms it works with to 668, as well as an uptick in the number of clients it supports to 72,450.
