Rathbone Brothers grows funds but analysts eye downgrades

16th Oct 2014 09:17

Rathbone Brothers grew funds under management (FUM) broadly in line with expectations in the third quarter despite relatively flat markets, but analysts eyed downgrades due to the recent market wobbles.FUM were up 10% from the position at the end of June, compared to a decrease of 1.8% in the FTSE 100 Index.Underlying net inflows were £0.3bn before acquisitions but £2.4bn when new additions were included.In late September 2014, the Rathbone Investment Management arm completed the acquisition of Jupiter Asset Management's investment management business for £40m, adding £1.9bn of FUM in the third quarter.The underlying annualised rate of net organic growth was 5.3% for the third quarter contributing to a rate of 4.7% for the nine months so far this year.The unit trust business continued strongly, with FUM up 4.5% at £2.3bn from June end, with net inflows of £100m in what was a difficult third quarter for the industry, compared to £91 million a year ago.Net operating income was £49.0m for the three months to 30 September, up 13.4% year on year.Chief executive Philip Howell said: "Our outlook remains positive as we respond to the ongoing changes in the industry and continue to invest to ensure that we have the infrastructure and resources to support our growth objectives."Broker Liberum said the wealth management business was "broadly in-line" but was "at risk to slight downgrades for the full year due to recent market weakness".The unit trust business was "better than expected and clearly performing well", with the net inflow result broadly in-line although full year results "are likely to be at risk due to recent market weakness".