River and Mercantile see performance fees skyrocket 448%

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River and Mercantile reported an 8% increase in remunerated assets under management to £ 47.6bn, along with a 448% increase in performance fees, to £ 6.4m.

The company, which specializes in investment and actuarial products, reported pre-tax profit of £ 10.9million, up from £ 8.3million the previous year. His performance fees of £ 6.4million were up from £ 1.2million in the previous period. Its underlying revenue (total revenue minus performance fees) fell 2% to £ 67.9million from £ 69.4million the year before.

The company said 92% of AUM funds and strategies have outperformed relevant benchmarks in the past 12 months.

The good results of the asset manager published on November 5 come just one week after the announcement of the sale of its Solutions division to Schroders.

The £ 230million deal would see RMG CEO James Barham transferred with the sale to run that company and also to take a broader leadership role at Schroders. Until completion, he will remain CEO of RMG, the company said. Alex Hoctor-Duncan will eventually succeed James Barham and join the Board of Directors on November 29.

The deal is also likely to give AssetCo a boost – the trading company set up by former Standard Life Aberdeen co-CEO Martin Gilbert.

In February, AssetCo doubled its stake in River & Mercantile, bringing its total stake in the company to almost 6%. Gilbert sits on the Board of Directors of River & Mercantile as Vice President.

READ Schroders signs agreement for River & Mercantile solutions business

Shareholders, who are expected to receive a dividend of 11.69 pence – 23% more than the previous year – will be consulted on how to use the proceeds of the Schroders deal.

The company said the board of directors “intends to return the majority of the proceeds to shareholders while retaining sufficient funds both to ensure that its existing business remains well capitalized and to facilitate its development plans. ‘asset management activity’.

President Jonathan Dawson underlined “the significant improvement in the group’s profitability which allows us to pay an attractive dividend”, including a special dividend drawn from performance fees.

“The proposed sale of our solutions business to Schroders will allow us to focus on transforming the remaining business into a dedicated asset manager, where we see significant potential for creating additional shareholder value,” said Dawson.

Barham said the company’s investments in wholesale and institutional distribution, as well as deepening and broadening investment capabilities, were delivered ahead of schedule.

“We once again increased our assets by £ 3.4 billion during the period, the seventh year in a row that we have done so, and this is a testament to the quality of our offering, where 92% of funds and AUM strategies have outperformed their relevant benchmarks over the past 12 months.

“Wholesale distribution has improved significantly with an increase in net flows of £ 554million over the previous year and we have successfully completed a CMA bidding process retaining 90% of customer assets affected throughout the process and winning 12 new clients during the period, delivering an additional £ 4.9 billion in assets and fiduciary and derivative and transition assets. This, combined with our strong investment performance, positions the group very well for continued growth over the next few years, ”said Barham.

READ Grand Mayor Martin Gilbert Joins River & Mercantile Board of Directors

The Board of Directors has stated that it is keen to continue developing the ongoing asset management business to create and offer a wider range of high quality and value-added equity products, as well as alternatives. and private market products in high demand, building on the group’s existing offer.

Shareholders will receive an update on its after-sales strategy and capital allocation plans and dividend policy in spring 2022.

To contact the author of this story with comments or news, email Penny Sukhraj

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