Buoyancy in UK’s Asset Management Industry – ValueWalk Premium

Buoyancy in UK’s Asset Management Industry

UK’s funds management industry declared enhanced performance with large funds flow by investors. Jupiter Fund Management PLC (LON:JUP) reported 11 percent growth in its Assets Under Management during first quarter. During the first three months of last quarter, its funds rose to £29.1 billion ($44.4 billion), thanks to £2.7 billion investment gains and £209 million inflows, largely into mutual funds.

Buoyancy in UK’s Asset Management Industry

Jupiter Fund Management PLC (LON:JUP)’s biggest market is the UK. Recently, a UK regulatory ruling imposed a ban on financial advisors from accepting commission from fund firms through Retail Distribution Review (RDR). However, Jupiter was able to mitigate its impact with superior performance from its fund managers that outperformed the market. While FTSE 100 index gained 8.7 percent, Jupiter reported a higher 10.1 percent returns on its funds during the first quarter.

UK’s largest retail broker, Hargreaves Lansdown PLC (LON:HL) has reported a record inflow of £1.8 billion ($2.8 billion) during the third quarter. Hargreaves performance beat Citi’s estimates by about 2 percent. Net inflows and growth in client numbers were both much stronger than Citi’s earlier forecast. With yield-hungry investors pouring cash into equity funds, Hargreaves’ Assets Under Administration rose 35 percent to £35.1 billion as compared to last year.

Hargreaves Lansdown PLC (LON:HL) attributed this enhanced performance to rising investor confidence, rise in transfers and to Self Invested Personal Pension (SIPP) loyalty bonus.

With paltry returns offered by banks and fixed-income instruments, retail investors have largely started looking at equities and other high-yielding investment options offered by many Asset Management firms. Besides, SIPP is one of the most tax-efficient ways of saving for retirement.

Ashmore Group plc (LON:ASHM) (PINK:AJMPF), a provider of investment management services reported $77.7 billion AUM at end of March 2013. This surpassed Citi’s forecast by over 7 percent. The UK fund manager that invests in emerging markets reported net inflows of $7.3 billion in the quarter ended March 31.

The management attributed strong net inflows, corporate debt and blended debt as the primary reasons for its enhanced AUM. Besides, Ashmore Group plc (LON:ASHM) (PINK:AJMPF) successfully attracted funds principally from government related clients in emerging markets with augmented flows from European and US institutions. Net inflows to multi-strategy and overlay also attributed as the contributing factors for growth in its AUM.

Thus with results still awaited from other leading Asset Management players such as Aberdeen Asset Management plc (LON:ADN), the initial results released by some of the leading players in the UK asset management industry amply indicate strong revival in the growth of the industry. Despite tough investment scenarios, each of the large players that announced results has chalked out niche strategy to stay competitive and enhance its business.


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