Liontrust braces for £1.5m Mifid hit

Liontrust has warned investors to expect up to a £1.5m hit to revenues from its decision to absorb research costs under incoming Mifid II regulation.

Liontrust boosts fixed income team as AUM smashes £10bn

The fund group is the latest manager to announce it will bear the brunt of research costs for clients, as firms scramble to ready themselves for new Mifid II regulation coming into effect in January 2018.

The impact on its revenue is expected to be between £1m to £1.5m, the group confirmed in its interim update.

Meanwhile, Liuontrust confirmed its assets under management (AUM) are now in excess of £10bn, growing by an additional £500m from the £9.6bn it reported at the end of the six months to 30 September 2017.

Its acquisition of Alliance Trust Investments (ATI), completed in April, helped boost its half year AUM by nearly 50%, adding £2.5bn to its total assets.

Liontrust said it took in £178m of net inflows during the period, with £303m inflows from its retail arm offsetting £160m worth of redemptions on the institutional side.

The fund house also revealed higher profits and revenue and decided to raise its interim dividend from 4p to 5p.

Profit before tax was up 61% to £3.3m, while revenue grew 57% from £22m the previous year to £35m.

John Ions, chief executive, called the results “a testament to the determination and talent that exists within Liontrust”.

He said: “We have generated these net inflows despite the uncertainty caused by the ongoing Brexit negotiations and the fact UK All Companies has been the worst selling sector by net retail flows in seven of the past 13 months to the end of September 2017, according to the IA. It shows the resilience of investor demand for active fund management with proven long-term track records and robust investment processes despite a challenging environment.”

Looking ahead to next year, Ions said the group is “in great shape after a successful 2017,” with the Liontrust Sustainable Investment team, inherited from its acquisition of ATI, and new hires David Roberts and Phil Milburn, the former Kames fixed income duo, helping to broaden its capabilities.

“I look forward with optimism, safe in the knowledge that we have the skill and dedication within the business to continue our growth.”

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