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Former Old Mutual unit bounces back after Brexit jitters

Jan 29 2020 16:44
Londiwe Buthelezi

After spending most of 2019 witnessing clients pull their money out of the UK due to Brexit jitters, former Old Mutual’s UK business, Quilter, attracted more money from investors in the last quarter. 

The wealth management firm, which separated from Old Mutual in 2018, said it recorded net inflows of £500m from clients in the last three months of 2019, which turned its fortunes around from the net outflow of £200m in the nine months of the year. Companies record net inflows when they’ve received more funds from customers who want to invest with them than money taken out by those who left. Net outflows, on the other hand, show that more people withdrew their investments.

In Quilter’s case, uncertainty over Brexit - which made British clients reluctant to invest, coupled with the resignation of some investment managers, who took their clients with them in 2018 - saw the company record massive outflows for most of 2019. At the half-year mark, the company had lost £900m in outflows, when including the life assurance business that was sold later in the year.

But in a trading update that the company published on Wednesday morning, CEO Paul Feeney said because of the investments Quilter received in the fourth quarter, its overall net client cash flows for 2019 stood at £300m.

“2019 was a good year for market performance but a challenging year for net client flows. We were pleased to finish the year in a positive position,” said Feeney.

The new inflows and good market returns pushed up Quilter’s assets under management and administration to £110.4bn by the end of 2019, a 13% increase from December 2018.

The news about the rebound appeared to please shareholders, 60% of whom are South African institutional investors, as the company’s share price jumped 7.5% on the JSE by 14.04pm.

quilter  |  paul feeney  |  investments
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