RIV.L Regulatory News (RIV)

River and Mercantile Group PLC

Trading Update

31 December 2015

River and Mercantile Group PLC (R&M), the advisory and investment management business today provides a trading update of Assets under Management (AUM) and Notional under Management (NUM) for the three and six months ended 31 December 2015.

Highlights for the three months ended 31 December 2015:

· Fee earning AUM/NUM increased by 5% to £22.5 billion.

· Net inflows were £909 million in the period including a £1bn structured equity options mandate by a large UK defined benefit pension scheme and our first global equity mandate in Australia.

· Investment performance was positive in all divisions.

Highlights for the six months ended 31 December 2015:

· Fee earning AUM/NUM increased by 7% to £22.5 billion, from 30 June 2015.

· Net inflows were £1,501 million in the period, with net sales of £1,169 million and positive rebalancing flows in Derivative Solutions of £332 million.

· Investment performance in the second quarter offset first quarter negative performance demonstrating our ability to defend and protect client assets in volatile markets.

Mike Faulkner, CEO of River and Mercantile, said:

"Despite difficult market conditions in the quarter; we have generated positive net flows and positive investment performance in each of our businesses. As we anticipated in our last annual report we have experienced strongest growth in our equity and derivatives solutions divisions. We continue to deliver sustained investment returns and effective outcome led solutions to our clients, and remain strongly positioned for growth."

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

AUM/NUM for the three months ended 31 December 2015.

AUM/NUM for the six months ended 31 December 2015.

At period end the Palisades advisory business was sold. Palisades' advisory revenues were £0.5 million in H1 2015/16, £0.7 million in H1 2014/15 and £1.3 million in H2 2014/15. The net economics of the Palisades business in the current period is a loss of £0.1 million (FY 2015: profit of £0.2 million).

For the 6 months ended 31 December 2015 advisory fees are estimated at £4.3 million (H1 2014/15 £6.0 million), and performance fees are estimated at £1.1million (H1 2014/15 £3.1 million).

Notes to editors:

River and Mercantile Group PLC (R&M) is an advisory and investment solutions business with a broad range of services, from consulting and advisory, to fully delegated fiduciary management and fund 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 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 £22.5 billion under management, including £12.7 billion of derivatives and advises on assets in excess of £30 billion.

For further information please contact:

River & Mercantile Group PLC +44 (0)20 3327 5100

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 notional values of derivatives 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. The redemptions will be included in a future period.