(Alliance News) - Asset manager River & Mercantile Group PLC on Monday reported growth in assets under management over the first half due to growth from its largest fund class - Derivative Solutions.
At December 31, River & Mercantile recorded assets under management of GBP42.28 billion, up 6.2% from the GBP39.81 billion seen at June 30.
"In the six month period we have continued to see strong net sales growth from our Derivatives business with NUM increasing by 8.6% and positive net sales from Institutional Equities. Wholesale Equities, whilst negative for the six months, showed a return to positive net sales in the last quarter of the year, which was the first net positive quarter for over 18 months. Fiduciary Management was slightly negative, mainly due to a number of long standing clients who, due to strong investment performance, were able to buy out their liabilities," the asset manager said.
Chief Executive James Barham said: "We have seen a steady period of growth for the business over the last six months and strong investment outcomes for our clients, with the exception in the short term of our value dominant strategies where the underlying factors continue to be out of favour. These portfolios now provide very exciting return characteristics not too dissimilar to the environment immediately post the global financial crisis. In spite of this factor headwind, all of our equity strategies have positive absolute returns over the fourth calendar quarter 2019 and the year as a whole."
River & Mercantile's first half pretax profit was 37% lower year on year at GBP5.7 million versus GBP9.0 million.
Net management & advisory fees were up 8.0% to GBP35.2 million but performance fees slipped 83% to GBP1.1 million.
As a result, total revenue was down 7.1% year on year to GBP36.3 million from GBP39.1 million.
River & Mercantile proposed an interim dividend of 4.39 pence each, down 30% from the 6.30p distributed the year before.
Chair Jonathan Dawson added: "Whilst the global outlook remains uncertain with particular challenges arising from the Covid-19 pandemic, I am confident that our diversified business model, with its clear focus on understanding and meeting our clients' needs is well placed to meet the challenges of current markets."
Shares in River & Mercantile were 17% lower in London on Monday at 175.00 pence each.
By Paul McGowan; paulmcgowan@alliancenews.com
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