Liontrust Asset Management Regulatory News (LIO)

LEI: 549300XVXU6S7PLCL855

For immediate release

14 July 2023

Stock Exchange Announcement

LIONTRUST ASSET MANAGEMENT PLC

Trading Update

Liontrust Asset Management Plc ("Liontrust", or the "Company"), the specialist independent fund management group, today issues its trading update for the three months ended 30 June 2023 (the "Period").

Highlights

· Net outflows of £1.6 billion1 in the Period.

· Assets under management and advice ("AuMA") were £29.5 billion as at 30 June 2023, a decrease of 6% over the Period.

· At the 7 July 2023 general meeting to approve the proposed acquisition of GAM Holding AG ("GAM"), the resolutions proposed were passed with 83.7% votes in favour.

· On 29 June 2023, GAM announced that it had agreed to sell its third-party Fund Management Services business to Carne Group, a material step towards fulfilling the FMS Exit condition of our offer for GAM.

· Silchester International Investors LLP has informed GAM that it will tender its shares (approximately 17.3% of GAM's share capital) into the Liontrust offer.

· AuMA as at 12 July 2023 were £29.0 billion.

1 Includes £516 million related to the Tortoise funds following the previously announced resignation of the lead manager, Matt Smith.

Commenting, John Ions, Chief Executive, said:

"The last quarter continued to show the importance and benefits of having a broad product range with diversification across investment styles as well as asset classes. In a risk-off environment, our strong focus on equities has proved to be challenging, especially when the UK market has been out of favour. This is demonstrated by equities having had net negative retail sales in the UK in 10 of the last 12 months to the end of May 2023, according to the Investment Association.

Our business is in robust health despite the current market environment. This provides a strong platform for future growth with the proposed acquisition of GAM bringing us the benefits of increasing investment talent; diversifying funds, asset classes and investment styles to offer more solutions to clients; broadening distribution across the world; and expanding the client base.

The support for the proposed acquisition of GAM by Liontrust's shareholders is a vindication of our belief this deal will accelerate our strategic aims. We have also gained the support of GAM's largest shareholder, Silchester International Investors LLP, who announced they are tendering approximately 17.3% of GAM's share capital as they believe it is in the best interests of their clients to do so. 

The excellence of our investment teams and investor service has been illustrated again during this period. The Liontrust European Dynamic Fund has won the award for Best Europe Fund at the Fund Manager of the Year Awards for the second year running. The Liontrust GF European Strategic Equity Fund, also managed by the Cashflow Solution team, was nominated as the Best Absolute Return Fund at the same awards.

We were also awarded Best Website at the Investment Marketing and Innovation Awards and named Best Investment Trust Group at the Online Money Awards, with the latter voted for by retail investors.

In response to client demand, we have launched the Liontrust GF Sustainable Future US Growth Fund, which will seek to take advantage of the opportunities for sustainable investment in the US. The fund applies the Sustainable Future investment process that has been investing in the US through the team's global growth strategies for more than two decades.

We continue to apply the right processes to managing the business day in, day out and have full confidence in the investment teams' processes. These will ensure Liontrust delivers for clients and shareholders over the long term."

Update on the proposed acquisition of GAM Holding AG

Rationale for the proposed acquisition of GAM

The proposed acquisition of GAM will accelerate Liontrust's strategic progress and growth through its broader investment capability and global distribution.

· Deliver market leading investment performance over the longer term: GAM's investment teams have delivered strong performance over the long term across asset classes, and nine fund managers are rated A to AAA by Citywire. Liontrust has created an environment in which fund managers can focus on investment and their distinctive investment processes; in taking this approach, there is cultural alignment between Liontrust and GAM.

· Diversify the fund range: GAM's broad range of funds and asset classes will enhance Liontrust's product range. The expanded range will offer the potential to grow the combined client base and provides Liontrust with differentiated performance across the fund range through the market cycle.

· Expand distribution and the client base: GAM will enhance distribution globally and provide the opportunity to increase sales and market share. GAM's largest markets are Switzerland, Germany, Iberia, Italy and the US, compared with the UK for Liontrust, and therefore the two companies have limited overlap in distribution by source of AuMA. The Proposed Acquisition also presents the opportunity to access and develop nascent markets such as the Americas and Asia-Pacific, where GAM has a presence.

Liontrust general meeting

At the 7 July 2023 general meeting, the resolutions to approve the proposed acquisition of GAM and to authorise the Directors to allot new ordinary shares in the Company up to an aggregate nominal amount of £94,053.03 were passed with 83.7% votes.

GAM Fund Management services business

On 29 June 2023, GAM announced that it had entered into definitive asset purchase agreements to sell its loss-making third-party fund management services businesses in Luxembourg and Switzerland ("FMS Businesses") to Carne Group (the "FMS Sale"). The Board understands that the FMS Sale includes the transfer of relevant employees, fund contracts and other agreements relating to the FMS Businesses and is a material step towards fulfilling the FMS Exit2 condition of our offer for GAM.

2 As defined in paragraph 3 of Part 5 of the circular in relation to the proposed acquisition of GAM dated 13 June 2023.

Support from GAM's largest shareholder

On 13 July 2023, GAM announced that its largest shareholder, Silchester International Investors LLP, had informed GAM that, in recognition of the strategic review carried out by GAM and in the absence of viable alternatives, Silchester confirmed it will tender its shareholding of approximately 17.3% of GAM's share capital into the Liontrust offer.

Assets under management and advice

On 30 June 2023, our AuMA stood at £29,507 million and were broken down by type and investment process as follows:

AuMA as at 12 July 2023 were £28,975 million.

Flows

The net outflows over the Period were £1,629 million2 (2022: £541 million). A reconciliation of fund flows and AuMA over the Period is as follows:

3 Includes £516 million related to the Tortoise funds following the previously announced resignation of the lead manager, Matt Smith..

UK Retail Fund Performance (Quartile ranking)

Source: Financial Express to 30 June 2023 as at 5 July 2023, bid-bid, total return, net of fees, based on primary share classes. Past performance is not a guide to future performance, investments can result in total loss of capital. The above funds are all UK authorised unit trusts, OEICs, Irish authorised OEICs (primary share class) or UK listed investment trusts.

4 Liontrust Russia Fund is not included as it is currently suspended and in an IA sector that is not rankable (e.g., Specialist) so it would not be a fair comparison to make.

5 The onshore and offshore Tortoise funds are not included as they are not in IA sectors.

6 Edinburgh Investment Trust Plc uses the IT UK Equity Income sector.

For further information please contact:

Teneo (Tel: 020 7353 4200, Email: liontrust@teneo.com)

Tom Murray

Liontrust Asset Management Plc (Tel: 020 7412 1700, Website: liontrust.co.uk)

John Ions: Chief Executive

Vinay Abrol: Chief Financial Officer & Chief Operating Officer

Simon Hildrey: Chief Marketing Officer

David Boyle: Head of Corporate Development

Singer Capital Markets (Tel: 020 7496 3000)

Corporate Broking: Tom Salvesen

Corporate Finance: Justin McKeegan

Panmure Gordon (Tel: 020 7886 2500)

Corporate Broking: David Watkins

Corporate Advisory: Atholl Tweedie

Forward Looking Statements

This announcement contains certain forward-looking statements with respect to the financial condition, results of operations and businesses and plans of Liontrust. These statements and forecasts involve risk and uncertainty because they relate to events and depend upon circumstances that have not yet occurred. There are a number of factors that could cause actual results or developments to differ materially from those expressed or implied by these forward-looking statements and forecasts. As a result, the Liontrust's actual future financial condition, results of operations and business and plans may differ materially from the plans, goals and expectations expressed or implied by these forward-looking statements. Liontrust undertakes no obligation publicly to update or revise forward-looking statements, except as may be required by applicable law and regulation (including the Listing Rules of the Financial Conduct Authority). Nothing in this announcement should be construed as a profit forecast or be relied upon as a guide to future performance.

Other information

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ENDS