Liontrust and Ashmore shares tumble as outflows mount

Shares in Liontrust and Ashmore have tumbled after the asset managers flagged growing outflows as investors pull cash out of riskier asset classes. 

Ashmore, which focuses on emerging markets, said its assets under management fell by $1.8billion to $55.9billion (£42.6billion) in the three months to the end of June after outflows of almost $3billion (£2.2billion).

‘There remains some global macro uncertainty and certain investors have therefore reduced risk during the quarter,’ said Ashmore chief executive, Mark Coombs.

Risk-off environment: Asset managers are suffering due to global economic uncertainty

However, Coombs assured investors that emerging markets ‘continue to perform well, with support from improving fundamentals such as accelerating GDP growth, falling inflation and the potential for rate cuts, as well as the benefit of a weaker US dollar’.

Ashmore had a positive investment performance of $1.1billion over the period, though this was more than offset by net outflows of $2.9billion.

‘Net outflows were primarily the result of top-down asset allocation decisions by institutional clients in the external debt theme and, to a lesser extended, in the blended debt and local currency themes,’ Ashmore said.

Ashmore shares tumbled almost 7 per cent to 202p, making it the top faller on the FTSE 250 on Friday morning. 

The second biggest loser was Liontrust Asset Management, which also reported falling assets under management after a rise in outflows.

The London-based asset manager said assets under management were just shy of £29billion as of this week, down from £29.5billion at the end of June and from £31.4billion at the end of March.

This was put down to net outflows of £1.6billion, while £294million was lost through market and investment performance.

‘In a risk-off environment, our strong focus on equities has proved to be challenging, especially when the UK market has been out of favour,’ said chief executive, John Ions.

‘This is demonstrated by equities having had net negative retail sales in the UK in 10 of the last 12 months to the end of May 2023, according to the Investment Association.’

Liontrust Asset Management shares were down more than 6 per cent to 665.50p on Friday morning. 

However, the fund group said its business was in ‘robust health’ and that the proposed acquisition of Zurich-listed GAM would boost growth.

The £96million acquisition, which was backed by 84 per cent of shareholders last week, ‘will accelerate Liontrust’s strategic progress and growth through its broader investment capability and global distributior’, according to the group.

But the deal continues to receive some opposition, with a group of minority shareholders of GAM this week revealing a rival plan it says will boost Swiss firm’s value by up to five times.

Liontrust’s growing outflows and today’s share price decline are likely to embolden GAM investor rebels, NewGame and Bruellan, which control 9.5 per cent of the fund manager’s shares.

Among their criticisms of the deal, the pair highlight a ‘lop-sided deal structure under which GAM shareholders will own only 12.5 per cent of the combined entity while contributing 40 per cent of [assets under management]’.

They also criticise Liontrust’s ‘track record as one of the worst-performing stocks in the fund management sector over the past 12-24 months’.