Liontrust assets plunge as investors pull £1.1bn from funds

Liontrust’s assets under management slumped over the summer as investors pulled £1.1bn from its funds.

Every area of the asset manager’s business saw net outflows in the second quarter of its financial year, with the largest, UK retail funds and managed portfolio services, suffering a £904m exodus from investors.

“We anticipated that the industry had a lacklustre quarter for flows and Liontrust has not escaped the general malaise, with September having proven particularly difficult,” said Rae Maile, research analyst at Panmure Liberum.

The £1.1bn in outflows brought Liontrust’s assets down to just £26bn, some £5.7bn lower than two years ago.

The poor performance caused analysts at Berenberg to cut their price target for the firm down to 625 pence, while the group’s stock price dipped three per cent to 513 pence this morning.

Shares in Liontrust slid more than three per cent in early trading after the update.

Chief exec John Ions blamed the poor performance of the business on uncertainty over this month’s budget, saying the speculation around changes to tax “have impacted investor confidence and fund flows for the whole industry”.

However, the business has been struggling for some time, as it lost £900m in investor cash during the first three months of the financial year.

Investment performance for the firm was also lacklustre, adding just £62m to Liontrust’s total assets over the three months, with the group’s institutional and international arms actually losing cash in the market.

“Given the lower assets under management and little sign of improving sentiment, we anticipate reducing forecasts by about 10 per cent,” said Peel Hunt analysts Robert Sage and Stuart Duncan.

Liontrust is set to release its half-year results on 21 November, with worries building that the firm may shift its dividend payout of 72 pence.

“We believe that fears with respect to Liontrust’s dividend are misplaced, with an estimated 13.6 per cent yield on offer helping to soothe the continued wait,” added Maile.