Trust in Liontrust

The latest financial year was a case in point. Each quarter was among the top 10 in Liontrust’s history for both gross and net inflows, despite the UK’s equity funds industry witnessing negative flows in 10 of the 12 months to March. All told, this resulted in £1.8bn-worth of extra money being managed across Liontrust’s funds (a 17 per cent increase on the prior year's net inflows) taking assets under management (AUM) to £12.7bn. That was despite £264m of net outflows from institutional clients in the period, highlighting the strength of sales to the higher-growth UK retail investor sector.

Those sales have held up since the year-end. By 25 June, AUM had grown a further 10.5 per cent to £14bn, of which Numis attributes 45 per cent to net inflows and the rest to investment gains.  

Liontrust’s investment teams have repeatedly proved their worth, which is a pre-requisite for any actively managed fund hoping to compete in the exchange traded fund (ETF) era. From their launch until 3 April this year, 16 of Liontrust’s 21 funds ranked in the top two quartiles of their peers, with the group’s UK growth, UK micro-cap, UK smaller companies and special situations funds all in the top quartile relative to peers on a short, medium and long-term basis. To its largely UK-based customer base, that’s an important selling point.

Investment performance accounted for 19 per cent of last year's AUM growth. By contrast, the more globally focused and specialist fund house Polar Capital (POLR) – which manages £14.1bn-worth of assets – attributed 72 per cent of its £1.8bn increase in its AUM in the same period to “market uplift and performance”.

Then again, stock markets aren’t a precise analogue for Liontrust’s performance. The group launched three fixed-income strategies in 2018, which attracted an impressive £419m in net inflows in the year to March 2019.

The group has also been ahead of the curve in perhaps the biggest topic in asset allocation today: environmental, social and governance (ESG) investing. Backed by two major distribution partners in Europe, Liontrust’s sustainable investment mandates boosted AUM by 25 per cent in the year to March to £3.7bn; about 29 per cent of the total. This is an area were active management can be a big advantage and seven of Liontrust’s nine sustainable future funds boast top-quartile places over five, three and one-year periods, or since launch. As such, the business appears to be well-positioned.