Rathbones UT funds nearly halved

8 January 2009

The latest trading statement from Rathbone Brothers (Rathbones) shows that funds under management by its unit trust arm have almost halved since the start of 2008.

Rathbones Unit Trust Management saw its assets drop from £1.89 billion at December 31, 2007, to £1.03 billion one year later, a 45.5% fall. Redemptions from unit trusts were high over the period, totalling £234m.

Meanwhile, Rathbone Investment Management saw its funds under management fall 16% from £11.23 billion to £9.43 billion over the period.

Taken together, and including the discretionary and wealth management divisions, total assets have fallen 20.3% over the year, from £13.12 billion to £10.46 billion. This compares with a fall of just over 30% by the FTSE 100 over the same period, according to the group.

Andy Pomfret, chief executive of Rathbones, says: “The overall fall in assets has been in line with the market, but the unit trust business has seen a net outflow of 10%. Most unit trust businesses have seen significant outflows and we have had poorer performance. We will not be sitting around twiddling our thumbs ahead of the next trading statement, but it takes time to rebuild a track record - it will not happen overnight.

“It is going to be a tough year, but we remain profitable at much lower levels than these,” he says, adding he sees opportunities opening up in equity markets.

Rathbones is in talks to sell its small Geneva-based and British Virgin Islands-based trust businesses to their respective management teams.

The group completed the sale of its Jersey trust operations to Hawksford in October, and is discussing the possible sale of Rathbone Trust Singapore. Pomfret says offshore tax and trust planning has been under attack from tax authorities, and it has become harder to attract clients in these areas.