Liontrust's failed takeover bid for GAM "will lead to restructuring" in the FTSE 250-listed fund house, which has seen further outflows of £1.6bn over the past quarter.
Writing in its three-month trading update to 30 September 2023, Liontrust CEO John Ions reflected on the attempted M&A move, arguing while the acquisition would have "accelerated" the firm's strategic objectives of broadening its fund range and expanding geographical distribution, the failure does not change these goals.
Liontrust bid fails as GAM enters discussions with shareholder group NewGAMe
"Our belief in them has only strengthened," he wrote. "The knowledge and insight gained through the GAM process is also helping us shape our future operating model for the long-term growth of the Liontrust business."
Ions stated the lessons gained from the process will result in "restructuring and efficiencies in some areas of the business", while confirming its "flexible remuneration model" will remain unchanged.
"As one leading analyst has said, the absence of a step forward is not the same as a step backward," he added.
Assets under management and advice fell a further 6.3% over the quarter, down to £27.7bn at 30 September 2023, which has since dropped to £27.5bn on 12 October.
Net outflows of £1.6bn were felt across the board, with retail, investment trusts, institutional, alternatives and international funds all seeing a decline.
Over six months, AUMA has dropped 12%, largely owed to £3.2bn of net outflows, accompanied by market and investment performance losses of £567m.
Sustainable investment remained the largest sole arm of Liontrust, representing more than a third of the business with just shy of £10bn in AUMA.
This was followed by economic advantage (£7.1bn), multi-asset (£4.5bn) and global fundamental (£3.5bn).
Questions raised over 'management credibility' as Liontrust fails to buy GAM
Ions said he was "proud" to be CEO of Liontrust, a business "built on the quality of [its] people".
"After more than a decade of significant growth for Liontrust, the past year or so has been more challenging," he wrote. "Like many other asset managers, Liontrust continues to face the headwind of current investor sentiment.
"Liontrust has been impacted by our bias towards equities, the quality growth style, mid and small caps and the broad negative sentiment towards the UK.
"Investor sentiment continues to be negatively affected by rising interest rates and the increased yield available on cash. But holding cash over the long term is not a strategy for delivering real growth for savers. In time, cash will leave savings accounts and money market funds to return to investment markets.
"We are striving for Liontrust to be in the best position possible to attract investors' savings and to benefit when sentiment changes."
