Several asset and wealth managers provided a quarterly update for the three months to December 2018 on Thursday, revealing significant outflows as a result of market movements.
Jupiter, Rathbones, Polar Capital and Premier Asset Management presented a mixed bag of results on Thursday.
And despite a bleak end to 2018, wealth managers have mixed opinions on whether these blows will continue in to 2019.
Adrian Lowcock, head of personal investing at Willis Owen, argued that flows are likely to settle “as generally speaking we don’t expect a recession this year and sentiment is so low it wont take much to give it a boost”.
However, Ben Yearsley, director at Shore Financial Planning, finds it difficult to see major inflows in the current environment.
“[Outflows are likely to continue] if markets continue to trend down and be volatile. No one is really immune from this,” he said.
Jupiter
Jupiter reported £1.7bn of outflows from its mutual funds over the period, with £1.3bn coming from its fixed income strategy.
The update revealed that as a result of investors pulling out, assets under management (AUM) were at £42.7bn, down £5bn in the quarter, with £3.5bn attributed to poor market conditions.
Lowock said: “Jupiter has been suffering recently and had a poor 2018, they have a good range of fund managers but sometimes the markets are just against you.”
However, Yearsley remained confident despite outflows from fixed income strategies and, in particular, Ariel Bezalel (pictured) funds. Yearsley said Bezalel is an “excellent manager” and the asset class “got him and most bond managers”.
“Pressure is only on when other asset classes doing well and he isn’t and others are taking money and he isn’t,” he added.
Lowcock agreed. “Bezalel is an experienced and trusted manager and fund groups don’t do themselves much good releasing managers when the good times go. Managers are not solely responsible for fund flows and bonds have had a good run and grown in popularity for years at some point this will change.”
Rathbones Brothers
Rathbone Brothers saw funds under management grow 12.8% from £39.1bn to £44.1bn at the end of December, despite market conditions and volatility.
The asset manager also saw net inflows increase in 2018, totalling £8.5bn, up from £2.1bn in 2017. This includes the £6.8bn of assets from the acquisition of Speirs and Jeffrey and the remainder from opening funds under management and administration.
In its update on Thursday, Rathbones said: “While market conditions can reasonably be expected to be volatile in 2019, we will continue to invest selectively for the longer term in the skills and infrastructure necessary to improve our operational efficiency and deliver high quality services to our clients.”
Polar Capital
Meanwhile, Polar Capital reported AUM was at £12.7bn at the end of 31 December 2018, up from £12bn at the end of March 2018.
The asset manager said it had not been immune to the market correction as it experienced outflows of £286m in the quarter and a reduction of £1.8bn in AUM for the quarter due to market movement and performance.
However, Polar saw performance fee profits of £23.6m for the year, a record figure that surpasses the £15m reported a year ago.
Stuart Duncan, analyst at Peel Hunt, said: “Falling equity markets have had a pronounced impact on Polar, partly a consequence of the growth bias on many of the group’s funds. One positive is that the performance fee was slightly higher than we had expected.
“Polar’s valuation already more than reflected weaker conditions, so we continue to see upside.”
Elsewhere, Polar Capital announced it had poached J O Hambro Capital investment director Sandy Black to take on the role of chief investment officer.
Her role will involve protecting clients’ interests via independent review of Polar’s investment teams as well as contributing to Polar’s growth through the identification and selection of investment strategies.
Premier
Premier Assets Management’s AUM remained unchanged for 2018 at £6.4bn.
A trading update by the firm showed AUM stayed the same from December 2017, but for the three months to December, it saw net inflows of £65m, down from £237m for the same period in 2017.
Total net inflows for the 12 months to 31 December 2018 were also down, with £562m versus £843m the previous year.
Mike O’Shea, chief executive, said: “It has been a challenging quarter, with subdued net inflows against a background of economic and political uncertainty and market volatility. Over the period the UK equity market fell 9.6% and global stock markets fell 10.5%.
“We believe the continued uncertain environment is driving nervousness among investors generally. However, we are confident our strong distribution capabilities, coupled with our continued strategy of focusing on active management of relevant investment products, including our 12 multi-asset funds and range of income funds, mean we continue to be well placed for the future.”
