River and Mercantile Group PLC Trading Statement (6471C)

TIDMRIV

RNS Number : 6471C

River and Mercantile Group PLC

19 April 2017

19 April 2017

River and Mercantile Group PLC

Trading Update

31 March 2017

River and Mercantile Group PLC (R&M), the investment solutions business today provides a trading update for the three and nine months ended 31 March 2017.

Highlights for the three months ended 31 March 2017:

   --    Fee earning AUM/NUM increased by 6% to GBP30.6bn. 

-- Net inflows were GBP1.3bn in the quarter, with net sales of GBP0.5bn and positive rebalancing flows in Derivative Solutions of GBP0.8bn.

   --    Positive investment performance in all divisions added GBP0.5bn. 
   --    Performance fees in the three months ended 31 March 2017 are estimated to be GBP1.1m. 

-- Mandates in transition in Equity Solutions - Institutional include GBP0.2bn relating to the previously announced Willis Towers Watson mandate with Alliance Trust.

Highlights for the nine months ended 31 March 2017:

   --    Fee earning AUM/NUM increased by 20% to GBP30.6 bn. 

-- Net inflows were GBP3.4bn in the nine months, with net sales of GBP2.0bn and positive rebalancing flows in Derivative Solutions of GBP1.4bn.

   --    Positive investment performance in all divisions added GBP1.7bn. 
   --    Performance fees for the nine months ended 31 March 2017 are estimated to be GBP5.9m. 

Mike Faulkner, CEO of River and Mercantile, said:

In the quarter, we grew assets and in-force revenue from both positive net flows and investment performance. Our investment performance track record continues to be strong across all products. Our client orientated solutions and low attrition rates have resulted in positive net flows in each of the last twelve quarters since the IPO in 2014.

We remain well positioned to continue this growth and will continue to invest in our operating platform, international capabilities and new product launches. The River and Mercantile Dynamic Asset Allocation Fund, launched in September 2014, now has over GBP100m in AUM and we will be launching and seeding a Global Macro strategy in 2017.

Assets Under Management (AUM) and Notional Under Management (NUM)

AUM/NUM for the three months ended 31 March 2017.

 
 
                                                                   Equity Solutions 
                                                          ---------------------------------- 
                          Fiduciary        Derivative 
 GBP'm                    Management        Solutions      Wholesale   Institutional   Total   Total AUM/NUM 
                       ---------------  ----------------  ----------  --------------  ------  -------------- 
                            (AUM)             (NUM)          (AUM)         (AUM)       (AUM) 
 Opening Fee Earning 
  AUM/NUM                       10,121            15,693       1,483           1,451   2,934          28,748 
 Sales                             334               207         208             108     316             857 
 Redemptions                     (133)             (113)        (73)            (38)   (111)           (357) 
                                                                                              -------------- 
                                   201                94         135              70     205             500 
 Net Rebalance                       -               834           -               -       -             834 
 
 Net Flow                          201               928         135              70     205           1,334 
 
 Investment 
  Performance                      353                 -         117              48     165             518 
 Fee Earning AUM/NUM            10,675            16,621       1,735           1,569   3,304          30,600 
 
 Mandates in 
  Transition                         -                50           -             210     210             260 
 Redemptions in 
  Transition                     (115)                 -           -               -       -           (115) 
 Mandated AUM/NUM               10,560            16,671       1,735           1,779   3,514          30,745 
                       ===============  ================  ==========  ==============  ======  ============== 
 
 Increase/(Decrease) 
  in Fee Earning 
  Assets                          5.5%              5.9%       17.0%            8.1%   12.6%            6.4% 
                       ---------------  ----------------  ----------  --------------  ------  -------------- 
 Increase/(Decrease) 
  in Mandated Assets              4.1%              6.2%       17.0%           22.6%   19.8%            6.8% 
                       ---------------  ----------------  ----------  --------------  ------  -------------- 
 

Fiduciary Management closing fee earning AUM includes GBP101m relating to the River and Mercantile Dynamic Asset Allocation Fund.

Equity Solutions - Institutional mandates in transition represent the recently announced Willis Towers Watson mandate with Alliance Trust.

AUM/NUM for the nine months ended 31 March 2017.

 
 
                                                                   Equity Solutions 
                                                          ---------------------------------- 
                          Fiduciary        Derivative 
 GBP'm                    Management        Solutions      Wholesale   Institutional   Total   Total AUM/NUM 
                       ---------------  ----------------  ----------  --------------  ------  -------------- 
                            (AUM)             (NUM)          (AUM)         (AUM)       (AUM) 
 Opening Fee Earning 
  AUM/NUM                        9,287            13,903       1,171           1,187   2,358          25,548 
 Sales                             772             2,268         485             242     727           3,767 
 Redemptions                     (365)             (931)       (270)           (215)   (485)         (1,781) 
                                                                                              -------------- 
                                   407             1,337         215              27     242           1,986 
 Net Rebalance                       -             1,381           -               -       -           1,381 
 
 Net Flow                          407             2,718         215              27     242           3,367 
 
 Investment 
  Performance                      981                 -         349             355     704           1,685 
 Fee Earning AUM/NUM            10,675            16,621       1,735           1,569   3,304          30,600 
 
 Opening Mandates in 
  Transition                         -               170           -               -       -             170 
 Closing Mandates in 
  Transition                         -                50           -             210     210             260 
 
 Opening Redemptions 
  in Transition                   (49)             (590)           -               -       -           (639) 
 Closing Redemptions 
  in Transition                  (115)                 -           -               -       -           (115) 
 Mandated AUM/NUM               10,560            16,671       1,735           1,779   3,514          30,745 
                       ===============  ================  ==========  ==============  ======  ============== 
 
 Increase/(Decrease) 
  in Fee Earning 
  Assets                         14.9%             19.5%       48.2%           32.2%   40.1%           19.8% 
                       ---------------  ----------------  ----------  --------------  ------  -------------- 
 Increase/(Decrease) 
  in Mandated Assets             14.3%             23.6%       48.2%           49.9%   49.0%           22.6% 
                       ---------------  ----------------  ----------  --------------  ------  -------------- 
 

Notes to editors:

River and Mercantile Group PLC (R&M) is an investment solutions business with a broad range of services, from consulting and advisory, to fully delegated fiduciary management and asset management.

R&M is focussed on creating investment solutions for institutional pension schemes, insurance and financial intermediaries and operates through four divisions: Investment Solutions encompassing both advisory and fiduciary management, Derivative Solutions providing structured equity and Liability Driven Investing (LDI), Equity Solutions providing UK and global equity strategies and Multi Asset Solutions, providing dynamic asset allocation and other multi asset based solutions.

The Group has GBP30bn under management, including GBP17bn of derivatives, and advises on more than GBP25bn of assets.

For further information please contact:

River & Mercantile Group PLC [phone]

Kevin Hayes, Chief Financial Officer

Chris Rutt, Deputy Chief Financial Officer and Investor Relations

Forward-looking statements

This announcement contains forward-looking statements with respect to the financial conditions, results and business of the Group. By their nature, forward looking statements involve risk and uncertainty because they relate to events, and depend on circumstances that will occur in the future. River and Mercantile Group's actual results may differ materially from the results expressed or implied in these forward looking statements. Nothing in this announcement should be construed as a profit forecast

Notes:

Assets Under Management (AUM) represents the assets over which we act either as a discretionary investment manager on a partial or fully delegated basis in accordance with an investment management agreement.

Notional Under Management (NUM) represents the aggregate notional of derivative contracts and is the basis on which management fees are charged.

Net rebalance in the Derivative Solutions division represents the net change in billing notional values of Derivatives (including Gilts) from existing client mandates and can increase or decrease based on changes in the underlying hedging strategies.

Fee Earning AUM/NUM represents amounts on which management fees and performance fees are charged.

Mandates in Transition represent the AUM/NUM of mandates which have been awarded by clients at the period-end date and will transition into fee earning assets. The timing, and ultimate amount transitioned is determined by the client. We report an estimated AUM/NUM for those mandates where there is a high likelihood of the amount being transitioned within the next three months.

Redemptions in transition are redemptions which have been notified by the client at the period-end date, but where the AUM/NUM is included in fee earning assets at period end. The redemptions will be included in a future period.

This information is provided by RNS

The company news service from the London Stock Exchange

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April 19, 2017 02:00 ET (06:00 GMT)