The assets under management equivalent (AUME) figure of $64.7bn for the end of December was up 8% in the quarter. We calculate that average sterling AUME in the quarter was virtually unchanged compared with H120, despite the strength in the pound at the end of the year. There were net inflows of $2.5bn including a previously announced $1bn tactical mandate which will only be in place for a short period. Other inflows were primarily in passive hedging. Market moves were neutral but foreign exchange movements added $2.3bn.
Encouragingly the client count increased by three to 73 in the period and this compares with 65 at the beginning of FY20. Also positive was the crystallisation of performance fees of £1.8m relating to performance over the six and 12 months to end December. This compares with the £2.3m earned in FY19 and is equivalent to 0.4bps of 12 month average AUME, which is material in relation to average passive hedging management fees of c 3bps, for example.
This demonstrates the potential for Record to add value for clients and compensate for lower management fees in performance fee capable mandates. We will adjust estimates for both performance fee and the net inflows (positive) and a small (negative) currency move since our last update.
Author: Andrew Mitchell