Investment manager Rathbones said on Thursday that funds under management had fallen in the three months ended 31 March amid “considerable market turbulence”.
Rathbones said funds under management and administration fell 4.7% to £104.1bn in the quarter as a result of heightened market volatility ahead of Donald Trump’s so-called “Liberation Day” tariff announcement, with net outflows hitting £784.0m. Rathbones highlighted that its asset management business had experienced “elevated outflows”.
The FTSE 250-listed group stated its wealth management business suffered a hit from clients withdrawing their money, with net redemptions hitting £468.0m – more than double the £224.0m that investors pulled out from its asset management division.
Outflows in its wealth management arm were mainly related to Investec Wealth & Investment as it wraps up its integration with the former rival, with 90% of Investec’s wealth clients now migrated onto its platform.
Chief executive Paul Stockton said: “In a quarter that witnessed some considerable market turbulence, the Group saw net outflows, primarily due to a lower level of gross inflows as the final stages of the migration process impacted IW&I in particular. Rathbones Asset Management’s single strategy funds and multi-asset funds saw elevated outflows as a result of ongoing market volatility. This reflected the broader industry trend of weaker flows into equity, fixed interest and multi-asset funds, with flows leaning more towards money-market funds in the quarter.
“Market volatility reinforces the enduring value of long-term, relationship-led wealth management, and creates opportunities for asset managers, but sustained volatility can also impact revenue and profitability. Wealth management FUMA valuations and fee income calculations at the end of the quarter coincided with a moment of particular market weakness. This heightens the need for our ongoing cost discipline, and whilst we continue to invest to support growth opportunities and deliver synergy benefits, we will be looking to manage operational cost levels actively to mitigate these effects on profitability as much as possible.”
As of 1130 BST, Rathbones shares were down 1.83% to 1,610.10p.
Reporting by Iain Gilbert at Sharecast.com
