Tatton Asset Management: Flourishing while others flounder

Tatton Asset Management might be a name you haven’t heard of – but it seems like you will soon.

Listed on London’s junior market AIM, the fundhouse’s stock price has more than tripled over the last five years.

With a skyrocketing profile, Tatton has recorded sector-leading growth. The amount of new money coming into its coffers doubled in the last six months, and assets under management have jumped 35 per cent to almost £20bn, according to its latest results statement.

This is still far behind the giant money managers like St James’s Place (£168.2bn) and Legal & General (£1.2 trillion). Still, Tatton stands out for its growth in an industry that’s struggled to gain traction over the past decade.

For example, Jupiter Fund Management, one of the most well-known asset managers, has reported multiple consecutive quarters of asset outflows and assets under management have slumped to £51.3bn.

Meanwhile, Brooks Macdonald has struggled to push its assets under management above £18bn.

Tatton’s sector-leading growth

RBC analyst Ben Bathurst said that Tatton has “sector-leading growth prospects” thanks to its investor appeal.

Inflows totalled £1.8bn in the last six months, compared to £2.4bn forecast for the entire year by Peel Hunt.

“This averages £305m per month and demonstrates the momentum in the business (adviser numbers were up seven per cent supporting this growth),” said Peel Hunt analysts Stuart Duncan and Robert Sage.

Tatton AM specialises in managed portfolio services (MPS), and is now the largest MPS provider in the country, ahead of competitor Quilter.

An MPS integrates a range of actively managed funds into one strategy, allowing for diversification across asset classes and regions.

According to RBC’s Bathurst, it is now the “fastest-growing segment of the UK wealth market. “

Thanks to their low cost, the services are especially popular with financial advisers, and Duncan and Sage noted the “ongoing shift towards the MPS offering by advisers.”

A secondary push for the sector has been the regulator’s clampdown on expensive fees, as Consumer Duty has caused advisers to fear accusations of overcharging customers.

Tatton also has a 99 per cent retention rate, described as “remarkably high” by Zeus analyst Robin Savage, bringing down costs further as it is not forced to be constantly searching for new advisers and cashing them out.

This has left it bringing in millions every week in new money, swelling in size and leaving it “well paced for future growth,” according to the Peel Hunt analysts.