R&M has reported an outflow in Q1 – the first since IPO – however, redemptions are concentrated in low margin Derivative Solutions whilst higher margin Equity Solutions has outperformed. We increase our management fee EPS by 1-2% given flows. Also nudging up our headline EPS by 5-6% and DPS by 6-7% on a higher performance fee forecast. Potential for growth remains, indicated by “in transition” mandates and pipeline commentary. We reiterate our BUY and 400p target price (17.5x FY19e PER).
30 Oct 2017
N+1 Singer - River and Mercantile Group - Growth in higher margin funds outweighs outflow
Sign up to access
Get access to our full offering from over 30 providers
Get access to our full offering from over 30 providers
N+1 Singer - River and Mercantile Group - Growth in higher margin funds outweighs outflow
- Published:
30 Oct 2017 -
Author:
Andrew Watson -
Pages:
6
R&M has reported an outflow in Q1 – the first since IPO – however, redemptions are concentrated in low margin Derivative Solutions whilst higher margin Equity Solutions has outperformed. We increase our management fee EPS by 1-2% given flows. Also nudging up our headline EPS by 5-6% and DPS by 6-7% on a higher performance fee forecast. Potential for growth remains, indicated by “in transition” mandates and pipeline commentary. We reiterate our BUY and 400p target price (17.5x FY19e PER).