Investec Wealth & Investment, which became part of Rathbones Group in September last year, suffered £600m in outflows during Q1 2024 to the end of March, due to the “impact of previously disclosed investment manager departures” during the previous quarter.
In a trading statement issued by Rathbones this morning (9 May), the firm said Rathbones’ discretionary and managed net inflows for the period came to £400m – in-line with flows seen in Q1 2023 – but these were offset by Investec W&I, meaning total net outflows for its wealth management division came to £200m. On an annualised basis, Investec W&I assets shrunk by 5.5%.
So far this year, six people have left Investec W&I to pursue other opportunities, alongside a slew of investment managers last year – a majority of whom moved to Close Brothers Asset Management.
Rathbones’ discretionary and managed portfolios increased by 2.8% in FUMA in annualised terms over the quarter from £51,308m to £53,349m, with £1,244m of outflows being offset by £1,598m of inflows. The firm’s multi-asset funds fared particularly well over the period, having grown in assets by 17.4%. Bespoke portfolios grew in assets under management and administration by 1.5%, while capital managed via in-house funds increased by 7.9%.
In total, the net operating profit of Rathbones Investment Management have increased by 12.2% compared to 2023, from £101.8m to £114.2m. Total assets for the enlarged IM group over the last quarter, however, shrunk by 1.9%.
On the asset management side of the business, net operating income has increased from £16m to £19.6m – a 22.5% uptick – compared to 2023.
In terms of FUMA, the business arm saw an increase of 7.3%, with inflows of £1,285m offsetting gross outflows of £1,033m. Market and investment performance contributed a further £807m.
Rathbones Group saw its operating income increase by 13.6% compared to Q1 2023, in a like-for-like basis.
Paul Stockton, group CEO of Rathbones, said the firm has “made a positive start to 2024”.
“The integration of IW&I is progressing well with run-rate synergies now £10.6m, up from the £8m reported at 31 December 2023. Work to combine the group’s offices in locations where both Rathbones and IW&I have offices is also progressing well, with Birmingham, Cheltenham, Exeter, and Glasgow colleagues already working in combined premises and others, including our London head office, to follow during this year. We also remain on track to launch our digital Client Lifecycle Management system in June this year.”
He added: “While economic uncertainty and headwinds remain in the UK and abroad, Rathbones is well-equipped to navigate challenging market conditions. We remain confident in our integration and synergy targets and are well-positioned to take advantage of the future benefits of the group’s scale.”
