Record Regulatory News (REC)

19 Jan 2010 07:00



19 JANUARY 2010

RECORD PLC

THIRD QUARTER TRADING UPDATE

Record plc ("Record" or the "Company"), the specialist currency investment manager, announces today that as at 31st December 2009 the Group's assets under management equivalents ("AuME") totalled $35.7 billion (30th September 2009: $36.0 billion).

AuME expressed in Sterling as at 31st December 2009 totalled £22.1 billion (30th September 2009: £22.5 billion). 

1. AuME composition

Record saw a marginal decrease to AuME during the period between 30th September 2009 and 31st December 2009. The composition of AuME at 31st December 2009 was as follows:

The mandates for the two US state pension funds have now been fully implemented and totalled $7.9 bn at 31st December 2009. The largest of these was $6.2 bn at 31st December 2009. Given the size of this client's mandate, any change it may decide to make to its asset allocation or hedging policy could have a significant impact on AuME.

2. AuME MOVEMENT 

Net client AuME flows in the three months to 31st December 2009 by product were as follows:

Record had 102 clients at 31st December 2009, compared to 118 at 30th September 2009.

The factors other than client flows which impacted AuME during the quarter, totalling +$0.3 billion, were: 

(i) Exchange rate movements: +$0.2bn

Exchange rate movements during the period affect the conversion of non-US Dollar mandate sizes into US Dollar AuME; 

(ii) Movements in global stock and other markets: +$0.2bn

Substantially all the Passive and Active Hedging, and some of the Absolute Return mandates are linked to stock and other market levels. Consequently AuME is affected by movements in these markets which had a positive impact in the quarter; 

(iii) Pooled fund investment performance:  -$0.1bn 

Investment returns are compounded on a geared basis into the AuME of the pooled funds and so impact AuME. 

Investment performance in Record's Absolute Return product was negative during the quarter ending 31st December 2009 and for an un-geared portfolio equated to a decrease of 0.44% over the quarter as a whole (six months to 30th September 2009: increase of 0.89%).

3. AVERAGE FEE RATES 

During the quarter to 31st December 2009, average management fee rates were maintained across all products.  

4. CHAIRMAN'S COMMENT

Chairman and CEO, Neil Record, commenting on trading, said "We continue to benefit from the diversification of active hedging which is now slightly larger than the absolute return business.

Our active hedging product, being systematic in nature, continues to perform in line with client expectations.  We continue to see interest in the active hedging product.

For the absolute return product, investment performance in the quarter was negative, although investment performance of our Alpha Composite was +0.45% for the first three quarters of the financial year. This compares to a negative return of 3.49% for the whole of the financial year ended 31st March 2009. Our Cash Plus fund, which is seven times geared, achieved a positive return of 2.15% for the first three quarters of the financial year. Whilst there may be further Absolute Return outflows, we remain confident in and committed to our long-term investment strategy." 

Record will announce its fourth quarter trading update on 20th April 2010.

Notes to Editors

Record plc

Record is a specialist currency investment manager and provider of currency hedging services for institutional clients. Founded in 1983, Record has established a market leading position as a currency asset manager. Specifically, the Group has a leading position in managing currency for Absolute Return for institutional clients.

The Group has three principal product lines:

currency for Absolute Return, in which Record enters into currency contracts for clients with the objective of generating positive returns;

active hedging, where Record seeks to eliminate the impact of currency movements on elements of clients' investment portfolios that are denominated in foreign currencies when these movements are expected to result in an economic loss to the client, but not to do so when they are expected to result in an economic gain; and

passive hedging, where Record seeks to eliminate fully the economic impact of currency movements on elements of clients' investment portfolios that are denominated in foreign currencies.

Record (LSE: REC) was admitted to trading on the London Stock Exchange on 3rd December 2007.

This announcement includes information with respect to Record's financial condition, its results of operations and business, strategy, plans and objectives. All statements in this document, other than statements of historical fact, including words such as "anticipates", "expects", "intends", "plans", "believes", "seeks", "estimates", "may", "will", "continue", "project" and similar expressions, are forward-looking statements. 

These forward-looking statements are not guarantees of the Company's future performance and are subject to risks, uncertainties and assumptions that could cause the actual future results, performance or achievements of the Company to differ materially from those expressed in or implied by such forward-looking statements. 

The forward-looking statements contained in this document are based on numerous assumptions regarding Record's present and future business and strategy and speak only as at the date of this announcement.

The Company expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained in this announcement whether as a result of new information, future events or otherwise.