Market underwhelmed by Rathbone's recovery

Funds under management (FUM) at investment management firm Rathbone Brothers recovered in the fourth quarter, ensuring the end-year figure came in a bit higher than a year earlier.

Total FUM as at the end of 2011 stood at £15.85bn, up from £15.1bn at the end of September, and up 1.4% from the end-2010 number of £15.63bn.

Funds managed by Rathbone Investment Management Limited totalled £14.76bn at the end of the year, up 1.2% from £14.59bn as at 31 December 2010. This compares to a 5.6% decrease in the FTSE 100 Index and a 2.8% decrease in the FTSE APCIMS Balanced Index over the same period, the company noted.

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up

The underlying annualised rate of net organic growth in funds under management in Rathbone Investment Management Limited was 5.4% in the year ended 31 December 2011, a marginal improvement on 2010's growth rate of 5.3%.

Acquired inflows of FUM into Rathbone Investment Management totalled £0.31bn in the year (2010: £0.60bn) which, when added to net organic growth, represents a net annual growth rate of 7.5% (2010: 10.2%).

Cash held in client portfolios was £0.9bn as at 31 December 2011, up from £0.8bn at the end of 2010.

On the unit trust side of the business, funds managed by Rathbone Unit Trust Management rose to £1.09bn at the end of 2011 from £1.04bn a year earlier, an increase of 4.8%. Total net fund inflows were positive each month in 2011, totalling £35m in the fourth quarter of 2011 and £97m for the full year.

The company said it was cautiously optimistic about prospects for 2012, notwithstanding the undoubted uncertainties over Europe; these are "balanced by indications that the economic environment is showing small signs of improvement, particularly in the USA," the company said.

Despite the fourth quarter recovery in FUM, the market was underwhelmed; in early trading the shares were trading down 48p at 880p, just 13p above their 52-week low.

jh