Liontrust shrinks by £1.14bn as investors pull out cash

The former stockmarket darling Liontrust Asset Management cited uncertainty before the budget as one reason for clients pulling a net £1.14 billion from the firm in the three months to September.
The London-based fund manager reported a 4 per cent fall in total assets under management to £26 billion over the summer quarter, with a pick-up in the pace at which customers were pulling out money.
In the quarter before, £923 million was withdrawn, though the latest pace of customer withdrawals was slightly down on the year to March 31, when £6.1 billion was pulled, amounting to a quarterly outflow rate of more than £1.5 billion.
John Ions, chief executive, said: “The new government’s large electoral mandate raised expectations of political and economic stability and a strong pro-growth agenda. The speculation and uncertainty around changes to taxation and reliefs in the lead-up to the budget, however, have impacted investor confidence and fund flows for the whole industry, including Liontrust.”
He added that the challenging environment for active fund managers, who try to beat indices, “has continued for longer than anticipated”.
Consumer confidence has been knocked in the past few weeks, according to survey evidence, with gloomy remarks by ministers about the state of the public finances blamed for some of the caution. Net outflows from UK equity funds rose to £666 million in September, according to the funds consultant Calastone.
Liontrust pleased its shareholders in the five years to 2021 as it boosted profits through a string of acquisitions but its shares have since slumped back by almost 80 per cent as retail investors pull cash out of UK-focused funds and its speciality of ESG-badged investments.
A failed bid last year for the Swiss manager GAM also raised questions about the business model, while some of the group’s stockpickers have also left.
Ions promised productivity and efficiency gains across the business and said a new global equities team led by Mark Hawtin, who was poached from GAM, was now “settled in at Liontrust and providing access to potential new clients for the company internationally”.
Liontrust is due to report half-year results on November 21. Last year it slid to a statutory loss of £579,000 from £49.3 million of profits after a string of one-off costs and non-cash write-downs.
The shares fell by 33p, or 6.2 per cent, to close at 495p, valuing the company at £321 million. It was ejected from the FTSE 250 index of midcap stocks last December.