Broker snap: Barclays sees improving outlook for UK asset managers

3rd Jan 2014 09:17

Analysts at Barclays Capital have highlighted potential improving flows for UK asset managers, saying that stocks will benefit from a bullish outlook for 2014.According to the bank, its group of listed UK asset managers outperformed in 2013, rising on average by 38% compared with the FTSE 100 and Euroxtoxx which increased by 14-17%.With more upside seen this year - Barclays' equity strategists predict that the FTSE 100 will end the year up 14% at 7,700 - asset managers should benefit, given the "improving industry-wide flow momentum [...] particularly from UK retail".The bank said that inflow rates are still "sub-trend" and have the potential to improve further.Meanwhile, the average price-to-earnings valuation multiple for asset managers remains at around 14-14.5, which "appear[s] mid-range with the potential to re-rate higher".The bank said: "Phase 2 of the Retail Distribution Review (RDR) kicks in for non-advised sales from April 2014 and attention has focused on superclean discounts. We believe there are offsets to such price discounting through market share gains and possible consolidation. "The improving flow momentum, equity bias and attractive valuations of our names still causes us to be positive overall."Barclays has named Schroders, Aberdeen Asset Management and Hargreaves Lansdown as its key 'overweight'-rated stocks.BC