Liontrust outflows continue as new funds lined up

LONDON - British fund firm Liontrust Asset Management, which earlier this year lost two of its star fund managers, said clients had continued to withdraw money, but it plans new fixed income funds to help stem the tide.

By (Reuters)

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Published: Tue 14 Jul 2009, 7:07 PM

Last updated: Thu 2 Apr 2015, 7:36 AM

Total net outflows were 902 million pounds ($1.47 billion) in the three months to June 30, and would have brought assets under management (AuM) below the 1 billion pound mark but for positive market movements.

AuM stood at 1.12 billion pounds at June 30, down from 1.2 billion at June 9. Performance fees bounced back from zero in the same period last year to reach 0.58 million pounds, almost entirely accrued from the firm’s credit fund.

Liontrust has been battling the impact of the departure of star fund managers Jeremy Lang and William Pattisson, who ran most of the firm’s assets. The move was blamed for a 25 percent drop in full-year pretax profits and also ended Liontrust’s talks with prospective merger partners.

The firm has tried to counter withdrawals sparked by that announcement with the hire of Ross Hollyman from Julius Baer’s hedge fund business, GAM. He will join in January 2010.

‘His appointment has been very well received by clients and investors,’ Liontrust said.

According to a separate filing, Pattisson earned 4 million pounds in the year to March 2009, including 820,000 pounds of severance pay.

Lang — well known for the ‘Lang approach’ to investing, which focuses on stocks with positive earnings surprises — earned 3.9 million pounds, including 621,000 pounds of severance pay.

Public details of star stockpickers’ pay are rarely available and relatively few have the type of deal Lang and Pattisson had, whereby they were remunerated based on a share of fund management fees on portfolios as well as on performance.

‘BUY’ RATING

Liontrust shares were up 1.1 percent at 113.5 pence at 1152 GMT and closed at 113.75 pence on Monday. Altium Securities upped its price target to 130 pence from 120 pence and kept its ‘Buy’ rating on the stock.

The broker cheered the ‘positive’ arrival of Hollyman.

‘We note that there is some short term downside risk to estimates from the cost of hiring new managers. We are however, encouraged at the growing momentum at LIO and the steps being taken to rebuild AUM, revenues and profitability,’ it said in a note.

Hollyman will develop the Global Value, Global Earnings Surprise and Global Multi-Factor equity investment strategies as the company bids to diversify its product range.

Liontrust has also recruited the three members of Hollyman’s investment team at GAM. Nikki Martin, Rob Cornish and Tom Ayres will join Liontrust in October 2009.

Liontrust is planning other fund launches later this year including a fourth-quarter debut for a long-only Liontrust Strategic Bond Fund and Liontrust High Yield Fund, which will be managed by a team recruited from Ilex in March 2009.

The firm is also planning a retail version of its credit fund.



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