Quilter jumps after its quarterly update

UK wealth and asset manager Quilter recorded net inflows of £175m in the December quarter, reflecting positive global investment dynamics that have seen investors piling back into growth assets including shares.

The positive global backdrop was particularly visible in November and December, when the US Federal Reserve laid the groundwork for a possible easing in its monetary policy after raising rates 11 times during 2022 and 2023 to fight runaway inflation, which has since eased dramatically even though it has yet to fall back to the desired 2% target.

At the time, global stocks and fixed-income markets rallied in unison, boosting asset managers such as Quilter. Risk assets tend to do well in a falling interestrate environment.

While net inflows in the review quarter are still lower year on year when they stood at £242m, they are a lot better compared with £1m achieved in the July-September quarter.

The performance of the asset management industry is largely geared to global investment markets, which are inherently volatile.

The value of Quilter’s assets under management and administration rose 5% to £106.7bn quarter on quarter.

The company’s share price rose 5.4% to almost R25 on the JSE by early Wednesday afternoon, having risen 20% over the past year, outperforming listed peers such as Coronation Fund Managers and Ninety One.

“In what has been a tough year across the industry, we finished 2023 on a positive note with an improved fourth-quarter performance relative to the third,” CEO Steven Levin said on Wednesday.

“The Quilter channel continues to drive strong net flows in both our affluent and high-networth segments.

“Our focus on reshaping our advice business is demonstrating clear results,” he said.

In recent years, Quilter, which has its primary listing in the UK, has spent nearly £500m on a new technology platform that offers easier and more secure management of assets, aiming to retain and attract financial advisers.

Gross inflows into this platform — dubbed IFA — rose 44% to £1.4bn year on year in the three months to the end of December.

However, net inflows for the rest of 2023 at a group level were just £137m, down from £1.78bn in 2022.