River and Mercantile Group PLC Trading Statement (4939M)

TIDMRIV

RNS Number : 4939M

River and Mercantile Group PLC

31 July 2017

31 July 2017

River and Mercantile Group PLC

Trading Update

30 June 2017

River and Mercantile Group PLC (R&M), the investment solutions business today provides a trading update for the three and twelve months ended 30 June 2017.

Highlights for the three months ended 30 June 2017:

   --     Fee earning AUM/NUM increased by 1% to GBP31.0bn. 

-- Net inflows were GBP0.4bn in the quarter, with net sales of GBP0.2bn and positive rebalancing flows in Derivative Solutions of GBP0.2bn.

-- Performance fees in the three months ended 30 June 2017 are estimated to be GBP6.7m, of which GBP5.0m relates to the Equity Solutions division.

Highlights for the twelve months ended 30 June 2017:

   --     Fee earning AUM/NUM increased by 22% to GBP31.0bn. 

-- Net inflows were GBP3.8bn in the year, with net sales of GBP2.2bn and positive rebalancing flows in Derivative Solutions of GBP1.6bn.

   --     Positive investment performance in all divisions added GBP1.7bn. 
   --     Performance fees for the twelve months ended 30 June 2017 are estimated to be GBP12.5m. 

Mike Faulkner, CEO of River and Mercantile, said:

In the quarter, we grew assets and in-force revenue from positive net flows and rebalance in Derivative Solutions. Our client orientated solutions and low attrition rates have resulted in positive net flows in each of the last thirteen 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.

This year has seen record aggregate performance fees of GBP12.5m and our investment platform has delivered strong performance across all of our divisions. I believe it is rare for any investment firm to have this consistency across product offerings, and that is testament to both the quality of our people and the focus of the business on those areas we are confident we can do well.

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

AUM/NUM for the three months ended 30 June 2017.

 
                                 Assets Under Management (AUM) and Notional Under Management (NUM) 
 
                                                                   Equity Solutions 
                                                          ---------------------------------- 
                          Fiduciary        Derivative 
 GBP'm                    Management        Solutions      Wholesale   Institutional   Total   Total AUM/NUM 
                       ---------------  ----------------  ----------  --------------  ------  -------------- 
                            (AUM)             (NUM)          (AUM)         (AUM)       (AUM) 
 Opening Fee Earning 
  AUM/NUM                       10,675            16,621       1,735           1,569   3,304          30,600 
 Sales                             195               533         181             414     595           1,323 
 Redemptions                     (284)             (512)       (137)           (198)   (335)         (1,131) 
                                                                                              -------------- 
                                  (89)                21          44             216     260             192 
 Net Rebalance                       -               246           -               -       -             246 
 
 Net Flow                         (89)               267          44             216     260             438 
 
 Investment 
  Performance                     (58)                 -          42              27      69              11 
 Fee Earning AUM/NUM            10,528            16,888       1,821           1,812   3,633          31,049 
 Mandates in                         -                 -           -               -       -               - 
 Transition (30 June 
 2017) 
 
 Redemptions in 
  Transition (30 June 
  2017)                            (2)             (572)           -               -       -           (574) 
 Mandated AUM/NUM               10,526            16,316       1,821           1,812   3,633          30,475 
                       ===============  ================  ==========  ==============  ======  ============== 
 
 Increase/(Decrease) 
  in Fee Earning 
  Assets                        (1.4%)              1.6%        5.0%           15.5%   10.0%            1.5% 
                       ---------------  ----------------  ----------  --------------  ------  -------------- 
 Increase/(Decrease) 
  in Mandated Assets            (0.3%)            (2.1%)        5.0%            1.9%    3.4%          (0.9%) 
                       ---------------  ----------------  ----------  --------------  ------  -------------- 
 

Fiduciary Management closing fee earning AUM includes GBP141m relating to the River and Mercantile Dynamic Asset Allocation Fund.

AUM/NUM for the twelve months ended 30 June 2017.

 
                                   Assets Under Management (AUM) and Notional Under Management (NUM) 
 
                                                                   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                               969           2,800         666             656   1,322           5,091 
 Redemptions                       (650)         (1,443)       (407)           (413)   (820)         (2,913) 
                                                                                              -------------- 
                                     319           1,357         259             243     502           2,178 
 Net Rebalance                         -           1,628           -               -       -           1,628 
 
 Net Flow                            319           2,985         259             243     502           3,806 
 
 Investment Performance              922               -         391             382     773           1,695 
 Fee Earning AUM/NUM              10,528          16,888       1,821           1,812   3,633          31,049 
 
 Mandates in Transition 
  (30 June 2016)                       -             170           -               -       -             170 
 Transitions/Adjustments               -           (170)           -               -       -           (170) 
                                                                                              -------------- 
 Mandates in Transition                -               -           -               -       -               - 
 (30 June 2017) 
 
 Redemptions in 
  Transition (30 June 
  2016)                             (49)           (590)           -               -       -           (639) 
 Transitions                          47              18           -               -       -              65 
                                                                                              -------------- 
 Redemptions in 
  Transition (30 June 
  2017)                              (2)           (572)           -               -       -           (574) 
                           ------------- 
 Mandated AUM/NUM                 10,526          16,316       1,821           1,812   3,633          30,475 
                           =============  ==============  ==========  ==============  ======  ============== 
 
 Increase/(decrease) in 
  Fee Earning Assets               13.4%           21.5%       55.5%           52.7%   54.1%           21.5% 
                           -------------  --------------  ----------  --------------  ------  -------------- 
 Increase/(decrease) in 
  Mandated Assets                  13.9%           21.0%       55.5%           52.7%   54.1%           21.5% 
                           -------------  --------------  ----------  --------------  ------  -------------- 
 

Fiduciary Management closing fee earning AUM includes GBP141m relating to the River and Mercantile Dynamic Asset Allocation Fund.

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 GBP31bn under management, including GBP17bn of derivatives, and advises on more than GBP27bn 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. We report an estimated AUM/NUM for those mandates where there is a high likelihood of the amount being redeemed within the next three months.

This information is provided by RNS

The company news service from the London Stock Exchange

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July 31, 2017 02:00 ET (06:00 GMT)