Shares in Assetco had fallen more than 10% by 10.35am this morning (14 June) as the firm reported an overall loss of £13.8m during the six months to 31 March.
The share price recovered slightly later in the morning, but the market baulked at the firm’s widening losses, and the progress of Rize, its thematic ETF business.
Rize was written down by almost 30% to £12m during the half, with the report admitting it had not performed as the company had hoped.
Assetco CEO Campbell Fleming said Rize had been “out of favour” in the market, and although the European thematic ETF space had been a tough place to be across the period, he said Rize was materially “behind plan”.
In its active equity business, which falls under the River and Mercantile brand, the firm suffered £278m of net outflows. Although this was offset by £294m contributed by positive market movements, chairman Martin Gilbert (pictured) admitted that overall the firm was still “behind where we want to be in terms of asset growth”.
The lagging asset growth and valuation write-down of Rize contributed to the increased losses, and administrative expenses also grew owing to an additional £11.7m incurred for the running of River and Mercantile and SVM.
The firm recorded a far smaller loss of £2.6m during the six months to 31 March 2022, but the report said a direct comparison to that period was difficult as Assetco did not have the businesses of River and Mercantile and SVM.
Fleming called the recent half “one of the toughest on record” for active equities businesses in light of the persistent outflows.
On a more positive note, he added: “Given that extremely challenging operating environment, I am gratified to report a modest uptick in both assets under management and, importantly, operating margin for our active equities businesses.”
The firm also added Indian asset manager Ocean Dial Asset Management for £4.1m during the period.
