Customers actually putting money into asset managers, rather than withdrawing billions, may seem like an unbelievable situation nowadays, but Tatton Asset Management is the rare exception.
The AIM-listed company’s assets under management jumped by a whopping 27 per cent in the last year, after investors poured billions into their funds.
Tatton AM now manages £17.6bn in assets, with record inflows totalling £2.3bn throughout the year, or 28.4 per cent more than last year and way above expectations by analysts.
“Whilst the contribution from investment performance at £1.5bn was better than expected, it was the strength of flows that was the real highlight,” said Peel Hunt analysts Stuart Duncan and Robert Sage.
The flows into Tatton’s coffers continued throughout the second half of the year at over £230m per month, showing continued momentum.
This is a notable exception to the rest of the UK market, with Premier Miton reporting £268m pulled from its funds and Ashmore Group reporting £1.6bn in withdrawals just in the last week.
Almost every other asset manager is bleeding funds right now as customers flee the market due to uncertainty and the cost-of-living crisis.
So what is Tatton AM doing differently?
Tatton specialises in managed portfolio services (MPS), which construct a range of actively managed funds into one strategy, allowing for diversification across asset classes and regions.
The market for MPS services has continued to grow, as financial advisers suggest them as a low-cost alternative for their clients to invest in various funds.
“Amid the increased market focus of the potential impacts of the Consumer Duty, we believe Tatton AM stands out as best positioned versus peers,” RBC analysts Ben Bathurst and Jude Neanor said.
They explained that financial advisers may be more drawn towards MPS due to fears of overcharging customers, which the regulator has recently begun to clamp down on heavily.
The analysts also praised Tatton AM for ” the group’s sector-leading organic growth prospects and the improving financial return profile afforded by its lean operating model.”
Tatton also has a mortgage service, which is expected to continue contracting due to uncertainties in the UK housing market
“Whilst Paradigm saw a 10 per cent reduction in mortgage completions, this was ahead of the market and in line with expectations,” said Duncan and Sage.
Paul Hogarth, founder and CEO of Tatton AM, said: “I am very pleased with this year’s results, especially when we consider the difficult economic backdrop our industry has faced over the last twelve months.
“As a management team, we are excited about the future market opportunity and the continued growth and adoption of MPS as a core investment proposition by the IFA community.”