Rathbones: Outflows subside as Investec merger progresses
Rathbones has managed to turn the tide on the wave of outflows that followed its merger with Investec’s wealth arm.
In a trading update published today, the wealth manager said investors pulled £200m from its platform in the final quarter of the year, down from £600m the quarter before.
Despite having “particularly strong discretionary inflows”, the asset manager said that a short-term increase in withdrawals around the Autumn Budget pushed outflows up to a net negative.
Flows into the firm’s discretionary and managed propositions rose to £400m from £100m between July and September 2024.
However, cash continued to flow out from the Investec Wealth & Investment business (IW&I) as the transition into Rathbones continued. Outflows jumped from £300m in the quarter before to £400m.
In 2023, Investec announced that its wealth and management division would combine with Rathbones in a £839m tie-up.
“The integration of IW&I continues to proceed well, and we have made substantial progress in the integration process, in line with our expectations,” said the firm today.
“The client consent process is well-progressed with very encouraging responses, and we continue to anticipate completing the client migration onto a single operating platform during the first half of 2025.”
Over the last year, investors have pulled over £1bn from IW&I, offset the £415m that has flowed into Rathbones’ investment management arm and £606m into its asset management arm.
Overall, firm funds under management stood at £109.2bn at the end of the year, up from £108.8bn at the end of September and £105.3bn at the end of 2023.
However, this was slightly below the £110bn closing funds under management that had been expected by analysts.
The firm’s stock price has struggled to gain much traction in recent months, as it is trading down four per cent from a year ago.
“Rathbones’ shares have weakened like others in the sector in recent months, reflecting the generally weak sentiment towards asset-gathering stocks given the uncertainty that has prevailed,” said Peel Hunt analysts.
“Our priorities for 2025 include completing the migration of IW&I clients whilst adding marketing and distribution capability to support organic growth opportunities, both directly and in tandem with third-party IFAs,” the firm added.
The asset manager is set to publish its preliminary statement of annual results on 26 February.