Premier Miton profits jump despite market volatility

Premier Miton profits jump despite outflows from asset manager’s UK equity funds amid market volatility

  • AuM down 8% to £12.8bn at the end of March amid recent market falls
  • Revenues up 10% to £48.5m; pretax profit up 22% to £14.6m 
  • It warned of ‘much tougher environment’ for UK retail funds across the industry

Premier Miton has seen revenues and profits jump despite market volatility and rising uncertainty caused by the war in Ukraine and soaring inflation. 

The London-based fund manager said recent market falls have resulted in some clients withdrawing money, with its asset under management 8 per cent lower than last year at £12.8billion at the end of March.

But while it has not been immune from a ‘much tougher environment’ for UK retail funds across the industry, it still posted a 10 per cent surge in revenues to £48.5million in the six months to the end of March. 

Adjusted pretax profit rose by 22 per cent to £14.6million. 

Premier Miton said recent geopolitical events have created a challenging period for markets and this was reflected in a fall in the group’s assets under management

‘Inevitably, the falls in markets we have seen of late have impacted on our total AuM […],’ chief executive Mike O’Shea said.

‘However, we are long term investors both for our clients and for our business and recognise that there will be many fluctuations in markets as we build for the future.’ 

Despite ‘strong relative investment performance’ the fund manager saw negative market returns of £683million. 

Net outflows from open ended funds were £303million, compared to net inflows of £14million in the first half of 2021.

‘These were primarily from UK equity funds and the multi-asset multi-manager funds where there was weaker client demand,’ it explained. 

These outflows were partially offset by inflows into its fixed income funds and the its diversified multi-asset funds.

Looking at the longer-term picture, O’Shea said that almost 90 per cent of Premier Miton’s funds outperformed the market over three years.

Premier Miton shares were 9 per cent higher at 123p in afternoon trading on Friday.

O’Shea highlighted how a new generation of investors would be facing extra challenges as it ‘has never had to worry about investing in an inflationary era’.

He said: ‘The last decade or so has been dominated by quantitative easing, falling bond yields, and falling inflation. This has had the effect of ‘raising all boats’ across asset classes and reducing the dispersion of returns within major indices.

‘As we look forward, the long-term implications of current events remain unclear. Investors are pondering issues such as energy security, global supply chains, energy transition, increased defence spending and the end of quantitative easing. 

‘Above all, a generation of investors has never had to worry about investing in an inflationary era.

‘Irrespective of whether these issues turn out to be permanent or more transitory in nature, they will create opportunities for genuinely active managers who have the courage of their convictions to run long term, focused portfolios.’

In the half-year, the fund manager relaunched its Balanced Multi Asset Fund under a new name – Diversified Sustainable Growth Fund – to ‘better’ reflect its ‘strong environmental, social and governance profile and long-term sustainable growth themes’.

Premier Miton now has six funds that are dedicated to responsible and sustainable investing as this remains a ‘key business development focus’.

‘Dedicated responsible and sustainable investing funds have been a significant area of demand from investors in the UK and elsewhere, and this is believed to be a significant, long-term trend,’ O’Shea added.