Rathbone Brothers pleased with Q1 amid challenging market

Rathbone Brothers updated the market on its trading for the first quarter on Thursday, reporting total funds under management of £37.8bn at the end of March - down 3.3% from £39.1bn at 31 December.

The FTSE 250 firm said underlying net operating income was £75.4m during the quarter, up 6.8% from £70.6m from the same period last year.

Total net organic and acquired growth in investment management was £199m between 1 January and 31 March, down from £318m a year ago, but still representing a total net annualised growth rate of 2.4% - down from 4.2% - and reflecting some marginally higher outflows.

Net organic growth in the first quarter represented an annualised growth rate of 2.0% compared to 3.3% in the first three months of 2017.

Net operating income totalled £66.6m in investment management for the first quarter, which was 5.2% higher than the £63.3m for the comparable period in 2017.

The value of the FTSE 100 index on the first quarter charging date was 7200, compared with 7332 a year ago.

Rathbone said the MSCI WMA Private Investor Balanced index remained unchanged at 1538 on the equivalent dates.

Unit trusts reportedly experienced strong net inflows of £142m during the quarter, up from £109m year-on-year, although that was offset by market performance resulting in funds under management remaining stable at £5.3bn - in line with the figure at the end of December.

However, net operating income of £8.8m for the three months ended 31 March was said to be 20.5% higher than the £7.3m for the comparable period in 2017.

“Although investment markets fell back a little in the first quarter of 2018, trading was solid with net operating income up 6.8% from the same period last year,” said Rathbone Brothers chief executive Philip Howell.

“Total funds under management fell 3.3% to £37.8 billion during the quarter, compared with decreases in the FTSE 100 Index and the MSCI WMA Private Investor Balanced Index of 6.4% and 3.8% respectively.”