Rathbone Brothers PLC (LON:RAT) saw total funds under management and administration rise by 2% in the first quarter to £55.6bn.

The firm’s funds business grew strongly in the quarter, topping the £10bn mark at £10.3bn, up from £9.8bn at the end of 2020. Net inflows totalled £0.5bn, versus inflows of 0.2bn in the first quarter of 2020 (Q1 2020).

The investment management side of the business saw funds under management rise to £45.5bn from £44.9bn three months earlier, with net inflows of £0.2bn (Q1 2020: nil).

Total net inflows across investment management and Rathbone funds were £0.7bn in the first quarter, on a par with the same quarter of 2020 – a period that included the acquisition of the Barclays Wealth Court of Protection business – representing an annualised net growth rate of 5.1% (Q1 2020: 5.2%).

Underlying net operating income totalled £107.3mln in the quarter, up 26.8% year-on-year. Investment management fees were up 40.4% on last year while commissions were little changed.

“We continue to deliver on our strategy, progressing our responsible investing agenda with the addition of four new Rathbone Greenbank Multi-Asset Portfolios in the first quarter. As markets begin to look beyond the pandemic, we will pursue our plans to strengthen services to clients and advisers and take advantage of future growth opportunities,” said Paul Stockton, the chief executive officer, ahead of the company’s annual general meeting today.

Peel Hunt described it as “a good start to the year” for the group, although assets under management (AuM) at £55.8bn were a shade below the broker’s forecast of £55.9bn.

“Revenues in the period were £107.3m, well ahead of the c.£100m we expected, an increase of 27% relative to the Covid-impacted comparative period. Fee income increased by 40% given the higher market levels and benefit from S&J acquisition, whilst commissions were flat and interest income was lower, as expected,” Peel Hunt said.

The broker has increased its full-year assumptions, with the main change being an increase to investment management fee assumptions.

The full-year profit estimate is hiked by 11% to £108.9mln (earnings pr share of 138p – 2p below consensus).

“We remain at Buy, believing that the long-term growth being delivered deserves a higher valuation,” the broker concluded.

Shares in Rathbones were up 3.6% at 1,756p in early deals.

— adds broker comment —

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