Rathbones outpaces its benchmarks

Investment management firm Rathbone Brothers said the first quarter of 2012 was one of growth, despite challenging investment conditions.

The Investment Management division's net operating income in the first three months of 2012 was up 11.8% to £37.8m from £33.9m the year before, while on the Unit Trusts side net operating income was up 10.0% to £2.2m from £2.0m the year before.

Net interest income of £2.6m in the first three months of 2012 was 13.0% higher than the £2.3m earned in the corresponding period in 2011, reflecting both a slightly higher yield and a higher average balance of treasury assets. Treasury assets averaged £944m in the first quarter of 2012 (2011 average: £836m).

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Funds under management (FUM) by the Investment Management division as at April 5th stood at £15,628m, up 4.3% from £14,984m a year earlier. The group saw inflows of £612m during the year, an improvement on inflows of £589m the year before, but outflows also rose, hitting £313m, versus £233m the year before.

Organic new fund management business improvement was £447m, down from £557m the year before, but acquired new business was higher this time round at £165m versus £42m last year.

To save us doing the maths, Rathbone Brothers said that the improvement in FUM that can be attributed to rising market values was £565m, up from £42m in the previous year.

The investment management operations notched up an underlying annualised rate of net organic growth of 3.6%, down from 8.6% the year before, while the total annualised net organic and acquired growth rate eased to 8.1% from 9.8% last year. However, the company pointed out that over the same period the FTSE 100 index has declined 4.7% while the FTSE APCIMS Balanced Index - APCIMS stands for Association of Private Client Investment Managers and Stockbrokers - declined 0.3% over the same period.

FUM at the end of March on the Unit Trusts side rose 11.8% to £1,179m from £1,055m a year earlier, helped by net inflows of £30m, up from £17m the year before.

Total funds under management were £16.81bn at the end of the first quarter, up 6.1% from £15.85bn at December 31st 2011. This compares to an increase of 2.7% in the FTSE 100 Index and an increase of 3.2% in the FTSE APCIMS Balanced Index over the same period, Rathbones noted.

"Whilst investment markets are expected to remain uncertain, Rathbones is as well placed as ever to develop future growth opportunities from our new and much improved head office at 1 Curzon Street," said Mark Nicholls, Chairman of Rathbones.

The shares were up 17p to 1,272p in mid-morning trade.

JH