Acquisition pushes Rathbone's assets above 20bn pounds - UPDATE

14th May 2013 08:32

Investment management group Rathbone Brothers grew assets under management 8.9 per cent in the first quarter, and they now stand above 20bn pounds for the first time.Boosted by more positive investment markets and the purchase of Taylor Young's private client business, net funds under management in the investment management business grew £368m in the first quarter to March 31st to £19.6bn and by the end of the month had risen to £20.1m. The growth in funds under management (FuM) included acquired inflows of £208m in the first quarter, which included £129m from Taylor Young's private client business. The remaining £160m of net organic growth in the investment management business represented annualised growth of 3.8%, up from 3.6% in the first three months of 2012. Net operating income in the core investment management business of £41.6m was up 9.8% on the same period in 2012, which Rathbone noted was ahead of the 9.2% growth in the FTSE 100 index and the 8.8% growth in the FTSE APCIMS Balanced Index.The non-core unit trust business saw funds under management grow 10.8% to £1.4bn in the quarter, with net inflows of £23m.Chairman Mark Nicholls said Rathbone was well positioned to take advantage of healthier investment markets and future growth opportunities and the "outlook is positive".Broker Canaccord Genuity said: "Rathbone's revenue growth is lower than its FuM growth: we understand this is a consequence of an increased proportion of lower margin charity FuM, the impact of rising markets on tiered fees, and (as we expected) lower net interest income." Analyst Robin Savage added: "Wealth managers' business models are geared to financial markets. Over the past year Rathbone shares have delivered a total shareholder return of 25%, while the FTSE 250 is up 34% and APCIMS Balanced Index is up 16%. We expect Rathbone shares to outperform rising markets."Shares in Rathbone Brothers were down 0.8% at 1,487p at 14:00 on Tuesday.OH