Liontrust Asset Management saw £1.7bn of net outflows during the three months to the end of December 2023, according to its latest trading update released today (17 January).
The firm’s UK retail funds and model portfolio service was hardest hit, having suffered a net outflow of £1.4bn. Combined with positive market and investment performance bringing in £1.8bn of cash, however, assets under management and advice in this sector of the business increased by 1.7% from £23.4bn to £23.8bn.
Institutional accounts and funds experienced outflows of £131m and a further £78m loss due to investment performance, while international funds and accounts saw clients withdraw £84m in net terms. This loss was dampened by investment performance bringing in £64m.
Elsewhere, investment trusts saw £33m of net outflows but achieved positive investment returns of £26m, while Liontrust’s alternative funds arm suffered net outflows of £49m, but recorded a positive performance contribution of £16m.
The firm’s total AUMA over the period stands at £27.8bn, which is a 0.6% uptick since the end of September. Since the start of 2024, however, AUMA has shrunk by 2.2% back down to £27.2bn.
The outflows follow a lacklustre Q3 for the company, where Liontrust recorded £1.6bn of outflows and a 6.3% fall in AUMA. This means that, over six months, assets have shrunk by more than 5.6% and the company has seen net outflows of £3.2bn.
John Ions (pictured), CEO of Liontrust, said: “Among the drivers of the net outflows in the last quarter, totalling £1.7bn, were the ongoing negative sentiment among investors and the current challenges facing active asset managers. These challenges include the fact active managers have never been confronted by such a competitive environment to attract and retain assets as is the case now, both from within and outside the sector.
“But there are still strong long-term tailwinds behind asset management. People’s need to save and invest for the future has never been greater. And equity markets are currently offering the chance to invest in some quality companies at attractive entry points, especially among small and mid caps. This is perfect territory for active managers, and an opportunity to attract assets.”
He added that 68% of Liontrust’s UK-domiciled retail funds are in the first or second quartile of their IA sectors since launch, or since their current manager has been in place, to the end of December last year.
“Liontrust’s bias towards quality growth investing and small and mid caps, along with a significant proportion of our AUMA being invested in UK equities, has impacted performance and flows,” Ions continued. “Liontrust’s improving UK retail fund performance is shown by the number of funds in the first or second quartile increasing to 68% over one year to 31 December 2023 from 50% to 30 September 2023. This includes the Global Technology fund being ranked first in its IA sector over one year, Edinburgh investment trust being ranked second and Global Dividend fund and UK Focus fund both ranked third.
“The Sustainable Future Managed and Managed Growth funds are also both first quartile over one year.”
Hires, promotions and fund launches
As part of the firm’s long-term strategy to broaden its fund range, asset classes and geographic distribution, Liontrust has hired GAM duo Mark Hawtin and Jeremy Roberts, who will join as head of global growth equities and head of global distribution (ex UK), respectively, in May and April.
Kristian Cook has been promoted from a London & South Africa distribution role, to head of UK distribution. He has been tasked with rolling single-strategy and multi-asset sales into one team.
Ions said: “The new structure provides greater focus and clarity of responsibilities and will broaden the product range for each salesperson.”
Liontrust is also set to launch the GF Pan-European Dynamic fund, which will be managed by the cashflow solution team. It will be run using the same investment process as the European Dynamic fund, which has been headed up by James Inglis-Jones and Samantha Gleave since 2006 and 2012 respectively.
The unit trust, which is £1.1bn in size, has achieved top-quartile total returns over one, three, five and 10 years, according to data from FE Fundinfo. It is the single best-performing fund over five years, and is the second-best performer over three and 10 years.
“I look forward to this year with confidence,” Ions concluded. “We are broadening our distribution, driving forward sales and expanding our investment talent to build on our robust investment processes and strong brand.”
