RUTM AUM up 29% to £4bn

Rathbone Unit Trust Management has reported a 29 per cent increase in funds under management as it passes a record £4bn threshold.

In annual results to 31 December 2016, the unit trust division of listed entity Rathbone Brothers saw gross sales of £1.3bn over the year compared with £900m in 2015.

At group level, funds under management enjoyed a 17.1 per cent increase from £29.2bn to £34.2bn, while underlying pre-tax profits were up 6.4 per cent from £70.m to £74.9m.

Moving its London head office during 2016 from Curzon Street in the West End to Finsbury Circus in the City, plus expenses pertaining to client relationships and goodwill, resulted in an adjusted pre-tax profit of £50.1m – down 14.5 per cent compared with 2015.

Earnings per share were up 4.4 per cent to 122.1p, with the board recommending a final dividend of 36p for 2016, bringing total dividends for the year to 57p – a 3.6 per cent increase on 2015.

Rathbones is committed to promoting its discretionary investment management services to professional intermediaries – focusing on national and regional IFA networks – with 12 strategic relationships now in place.

The group expects flows into these outsourced portfolio solutions to be roughly £200m throughout 2017.

It is also launching a new managed portfolio service aimed at lower value clients of intermediary partnerships, running as a centrally managed, execution-only service underpinned by its multi-asset portfolio funds, managed by David Coombs and his team.

Against a backdrop of continued political and economic uncertainty, core investment management reported organic growth of 2.9 per cent, falling short of its strategic target of 5 per cent.

Chief executive Philip Howell says the group will continue to invest in its investment teams, in-house financial planning capability and their respective support functions as well as continuing to look for strategic acquisition opportunities.

He says: “Despite the prospect of some volatile market conditions in 2017, we intend to maintain the momentum in our strategic growth initiatives.

“We continue to work to a target operating margin of approximately 30%. However, this may be impacted in 2017 by the £5m of additional expenditure outlined above, which will be reviewed if we encounter a prolonged market downturn during the year.

“We continue to look for accretive acquisition opportunities that fit with our culture and investment philosophy, and look forward with cautious optimism.”