Miton disappointed with flows ahead of Premier merger

Remuneration changes sees profits drop to £3.9m

Miton

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Miton’s chief executive has expressed disappointment with fund flows in its H1 results ahead of the boutique’s merger with Premier.

The group faced net outflows of £82m although assets under management increased to £4.7bn compared to £4.3bn at the start of the period. AUM had been £4.5bn at the same period last year.

Miton chief executive David Barron (pictured) said: “After several quarters of very strong inflows it is disappointing to report on a period when fund flows were modestly negative.”

While UK equity fund flows were negative, the asset manager saw growth in its other products.

Miton’s non-UK funds fared better with three recently launched equity funds, LF Miton European Opportunities, LF Miton Global Infrastructure Income and LF Miton US Smaller Companies, all saw strong performance and positive inflows.

Remuneration changes hit profits

Group profits were down, which was attributed to the implementation of the boutique’s remuneration scheme.

Miton saw profits of £3.9m compared to £4.2m in 2018.

Peel Hunt analyst Stuart Duncan said: “Miton’s interim results this morning were in line with our expectations, with lower profits reflecting the new remuneration scheme implemented.”

In March, the asset manager used its full-year results to launch a new renumeration structure which would see the company reward managers on a revenue-based structure to increase transparency.

Barron said: “The first half of 2019 saw the group continue to deliver against its strategic objectives with further organic growth driven by positive market movements and investment performance; the business has become more diversified over the past two years and we now have four portfolio management teams, each managing in excess of £600m, all with significant further potential.”

Premier merger

Duncan said: “Market conditions remain challenging and assets are little changed over the last two months. The key focus remains the merger with Premier, which will create a larger, more diverse business.”

This month, Miton announced a merger with Premier Asset Management which is expected to complete in Q4 2019 with a combined AUM of £11.5bn.

Barron added: “We believe that the proposed combination with Premier will result in a broader investment offering to address the needs of a wider range of clients and create a platform better positioned for future growth than Miton could achieve on a stand-alone basis in the short term.”

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