19 Dec 2017 07:00
Press Release December 2017
River and Mercantile confirms decision to absorb the cost of research
River and Mercantile has confirmed that following the implementation of MiFID II in January 2018 and the unbundling of external research and execution costs, it will absorb the cost of external research.
James Barham, Head of Asset Management at River and Mercantile Group PLC, said:
River and Mercantile Asset Management LLP (RAMAM) has a very clear investment philosophy and process that has been applied to client portfolios since the business was founded in 2006. This process is known as PVT (Potential Valuation and Timing). External sourced research, alongside the proprietary developed screening tool "MoneyPenny" and the internal verification (research) teams, forms a critical part of this investment process and acts to validate our extensive internal research outcomes. The active management of our investment strategies based on this research has been demonstrated through the strong investment outcomes and has delivered significant added value for our clients since inception.
Historically, the external cost of research has been part of the total cost of investment reported to clients and has been segregated and budgeted by provider. Under MiFID II we will continue to manage and monitor external research providers in a similar manner. However, after a period of consultation with our clients we have decided that, effective from January 2018, the cost of this external research previously charged to clients will be absorbed by the Group. The estimated annualised cost of this change is expected to be £1.0m to £1.5m, however this will be offset in part by a reduction in remuneration expense, leaving a net impact on pre-tax profit of £0.7m to £1.1m. We believe this is the most appropriate course of action to support the strong competitive position of the business.
Notes for 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 £31bn under management and advises on a further £27bn of assets.
For further information, please contact:
James Barham Chris Rutt
Head of Asset Management Deputy Chief Financial Officer and Investor Relations
River & Mercantile Group PLC River & Mercantile Group PLC
+44 (0) 207 601 6262 +44 (0)20 3327 5100