Fees in the fund management world are a hot topic, and average fees across collective investment funds around the world have seen relentless declines. According to research from Morningstar, the average asset-weighted fee for actively managed equity funds has fallen by 18% since 2013, compared with a 28% decline at passive funds.
Companies: JAM ATST SUPP JEO RIV
AuM/NuM grew by 3% in Q1 (4% incl. inbound mandates) with £1.1bn net inflows and flat investment performance. Positive flows returned in Equity Solutions after outflows in H2’18. Markets have been uncertain, but we expect this to drive demand in Fiduciary Management and Derivative Solutions, albeit Equity Solutions may be more volatile. We update our model but this prompts no change to earnings. We reiterate our BUY and 355p 12m target price (18x management fee EPS blended with a yield valuation
Companies: River and Mercantile Group PLC
Futura Medical (FUM LN) First patient enrolled in Phase III trial of MED2002 | i-nexus Global (INX LN) Licence to execute | River and Mercantile Group (RIV LN) AuM +3% in Q1, positive flows in Equity Solutions | SDL (SDL LN) Capital Markets Event: clear strategy for profitable growth
Companies: FUM INX RIV RWS
R&M has posted a small earnings beat (+6% vs N+1Se) on slightly better performance fees than expected, although core management fee earnings are in line. A number of issues (Rodrigs, CMA, FCA) have now been faced and navigated; the CMA conclusions standing to create opportunity. We see earnings more insulated from equity market performance, solid structural growth and a position of strength. We reiterate our BUY recommendation and 355p 12m Target Price.
Instem (INS LN) Poised for accelerated growth | Miton Group (MGR LN) Interims reflect AuM momentum, small upgrades | River and Mercantile Group (RIV LN) Sunshine through parting clouds? | Tufton Oceanic Assets (SHIP LN) Fully invested and looking to grow | Zinc Media Group (ZIN LN) Channel 5 and BBC Scotland commissions
Companies: INS RIV PMI
Clipper Logistics (CLG LN) Retail headwinds prompt downgrades despite strong pipeline | Dialight (DIA LN) H1: Getting to grips with manufacturing issues | GlobalData (DATA LN) Ahead on revenue, profit and cash | River and Mercantile Group (RIV LN) AuM +3% in Q4, plenty of positives | RM Secured Direct Lending (RMDL LN) Critical mass achieved | Springfield Properties (SPR LN) Significant land agreement increases GDV by 17%
Companies: CLG DIA DATA RIV RMII SPR
AuM/NuM grew by 3% in Q4 to £33.8bn (N+1Se £33.7bn) with net inflows and positive performance. Performance fees are expected to hit £10m. Remuneration will be a little higher than expected. The pipeline is described as strong. Shadows from the FCA and CMA have now all but passed. Despite some moving parts, we make no material changes to our headline earnings forecasts and reiterate our BUY (355p 12m TP).
BCA Marketplace (BCA LN) Apax walks away as board’s resistance to low-ball bid grows | River and Mercantile Group (RIV LN) Positive update on FCA investigation, trading in line with a month to go | Wilmington (WIL LN) FY19 expectations lowered
Companies: BCA RIV WIL
We have refreshed our quality style screen for the second time and report on style performance since the last refresh in October. Performance has been very strong, outperforming the small-cap index by c.1600bps (weighted basis) and c.1000bps (unweighted). There has been volatility with the market and this style has yet to be tested in a concerted down market, but in a flat or rising market quality appears to be a successful investment style in small-caps. We have highlighted 11 focus stocks in t
Companies: LIO GHT AFRN CHH ZYT DOTD GTLY RIV FCRM TAM PMI
R&M has issued a solid Q2 update: 6% growth in fee earnings assets on net inflows and positive performance, as well as a strong performance fee outturn (c.£7m). There are additional positives on closer examination: underlying organic net flows are higher and potential deferred value from TIGS performance fees. We update our model for the outturn but also incorporate MiFID2 research cost guidance and prudence on peripheral income leaving our forecasts largely unchanged (+/-5%). We see upside to t
River and Mercantile (“R&M”) has announced that it will absorb the cost of research through the income statement following the implementation of MiFID2 on 1st January 2018. This will add £1.0-1.5m of extra costs which were previously borne by the funds. The PBT impact is lower, £0.7-1.1m, with some of the extra cost prompting a reduction in the remuneration expense. This does not have a material impact on forecasts: 1-3% on the remainder of FY18e and 2-4% in outer years. We reiterate our BUY rec
Curtis Banks Group (CBP LN) IT platform selected, positive development – reiterate our BUY | dotdigital Group (DOTD LN) Positive AGM statement | ECO Animal Health Group (EAH LN) Marketing authorisation for Aivlosin® in the Philippines | Microsaic Systems (MSYS LN) Appointment of Non-Executive Chairman | Nichols (NICL LN) 2017 – A positive year tempered by recent Yemen developments | River and Mercantile Group (RIV LN) Research costs to be absorbed under MiFID2, not a material impact | Springfiel
Companies: NICL DOTD EAH MSYS RIV CBP SPR
The FCA has referred the investment consultancy and fiduciary management industry to the CMA. This remedy was deferred in June’s Asset Management Market Study. Whilst R&M operates in this space, we do not believe that it is the direct target of the investigation which focuses on the market dominance of a small number of players, not R&M. Remedies could impact R&M if they are wide-ranging, or be positive if they improve the ability for smaller players to compete. We recognise that the CMA’s inves
River & Mercantile (“R&M”) has 90% AuM/NuM in Fiduciary Management and Derivative Solutions which have relatively low correlation with equity markets. The Equity Solutions funds have a strong track record and are growing. We feel that R&M offers value given growth potential and the quality of earnings in Fiduciary Management and Derivative Solutions from long-term relationships with pension funds. We forecast 20%+ 3yr management fee EPS CAGR and a 4%+ dividend yield. We initiate with a 400p 12m
Research Tree provides access to ongoing research coverage, media content and regulatory news on River and Mercantile Group PLC.
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We see the UK Government’s Net Zero Strategy as being overall helpful but not especially definitive. Amongst our coverage group, Drax Group (DRX LN) and Velocys (VLS LN) benefit from the Humberside CCS cluster prioritisation and Velocys from SAF support. The amount of renewables is likely to boost the need for flexibility solutions where Drax, Gore Street (GSF LN) and SIMEC Atlantis (SAE LN) can benefit. Hydrogen companies ITM (ITM LN) and Powerhouse Energy (PHE LN) are likely to find support. T
Companies: ADN DRX GSF ITM NESF PHE SAE SIT STRLNG TLG VLS
The third quarter continued to enjoy record CIB revenues and loan provision recoveries. Consensus expectations have now largely aligned with our projections, thus leaving limited upside potential in our view.
Companies: Barclays PLC
Companies: Plus500 Ltd.
Updating at the end of H1, Urban Logistics REIT (“ULR”) continued to deploy capital, with 2 further transactions in the last weeks of H1 bringing the total to £103m since the last raise (£109m in Jul-21). There is a further £50m in advanced stages and a £400m pipeline beyond that. Yields are in line with expectations and assets are pregnant with active management opportunities, which ULR thrives on. The board is seeking to move to Premium List to facilitate future growth. We leave forecasts unch
Companies: Urban Logistics REIT plc
Non-Standard Finance (‘NSF’), one of the leading providers of unsecured credit to UK adults, published interim results for the half year to 30 June 2021 on 28 September. Overall, these showed a significantly lower loss before tax due to improved operational performance and lower below the line charges. The group also reported that current trading was ahead of plan primarily due to strong collections performance. Discussions with the FCA regarding the redress programme for guarantor loans custome
Companies: Non-Standard Finance Plc
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Devolver Digital to join AIM, an award-winning digital video games publisher and developer in the indie games space. Recently awarded indie 'Publisher of the Year 2021' by GamesIndustry.biz. Offer TBA. Due early Nov.
Life Science REIT to join AIM raising up to £100m. This will be the first London listed real estate investment trust (REIT) focused on UK life science properties providing investors with exposure
Companies: SYS1 ARE SO4 SNG TMG TMT OHG IDE KIBO MRL
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ATOM headquartered in Leeds, focussed on the large-scale production of green hydrogen and ammonia intends to join AIM towards the end of the year. ATOME intends to be spun-out from AIM-listed President Energy Plc, an oil and gas company which has incubated and financially supported ATOME to date, by way of a dividend in specie and flotation.
Devolver Digital to join AIM, an award-winning digital video games pu
Companies: SAE HMI MNO MSMN NSCI OMG PCA
Gore Street’s trading update confirms expectations of a strong trading environment for batteries in both the GB and Irish markets. Driven principally by high gas prices creating electricity market volatility and with tight capacity margins likely to remain, we see the company continuing to generate excess cash returns in this financial year at least.
Companies: Gore Street Energy Storage Fund PLC
Palace Capital has released a good trading update of for the 6 months to 30 September. The Group has achieved good progress both across the portfolio and in sales achieved at Hudson Quarter. With cash reserves rising, the Group continues to look for value creative opportunities to recycle capital which should realise value for shareholders. Buy
Companies: Palace Capital plc
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Arrow Exploration Corp. (AIM: AXL ; TSXV: AXL) , the oil and gas exploration and production company, has conditionally raised approximately £8.8m and is due to complete its dual listing on AIM on 25 Oct. Market cap c£13.1m.
Devolver Digital to join AIM, an award-winning digital video games publisher and developer in the indie games space. Recently awarded indie 'Publisher of the Year 2021' by GamesIndustry.biz.
Companies: ZYT CIC DMTR GILD LMS MMAG PYC SMRT SBI
Currently, Gore Street Energy Storage Fund (GSF) primarily relies on revenue from frequency response services, including Dynamic Containment (DC), to estimate near-term returns. The dislocation in the UK power market has led to a sharp rise in returns available from energy arbitrage leaving GSF’s assets well placed to benefit from this increased volatility. In September, those of GSF’s GB storage assets that participated in the actively-traded GB power markets generated revenues that were signif
Anglo American (AAL LN) – On track to achieve 2021 production guidance following continuing production recovery in Q3
Antofagasta (ANTO LN) - US Forest Service proposed a 20-year ban on mining in the watershed of the Boundary Waters in Minnesota
Bushveld Minerals* (BMN LN) – BUY - Valuation 33p - Bushveld back on track with solid Q3 production and cost report
Condor Gold* (CNR LN) - Valuation 102.5p – Infill drilling completed ahead of PFS/FS at the La Mestiza Open Pit
TMC the Metals Comp
Companies: TMC ANTO BMN CNR WRES PXC RMM SHG
TMT Investments PLC have provided a portfoloio update. We have published research on this which is attached and a snapshot of the research is below.
The venture capital company investing in high-growth technology companies has moved one step closer to its first IPO driven exit. In a portfolio update announced this week TMT noted that its portfolio company Backblaze, Inc. publicly filed with the SEC on 18 October 2021. TMT currently holds a 9.97% interest in Backblaze, Inc. (pre its expected fun
Companies: TMT Investments
The quarter enjoyed record provision recoveries and strong fee income generation. The coming quarters should remain supportive. The accelerated capital accumulation enabled management to announce a new $2bn share buyback.
Companies: HSBC Holdings Plc
What’s new: Tatton’s interims trading update confirm it has “delivered strong growth in all its key metrics during the period including revenue, profits and assets under management” (AUM). It is “trading in line with expectations”.
Companies: Tatton Asset Management Plc