Rathbones to spin off third trust business after 20% asset slump
Rathbones, the UK-based private client asset manager, is preparing a management buyout of its third core trust business in less than two months, as part of an ongoing plan to sell its offshore operations, as assets under management slump 20%.
The asset manager said it has entered into a non-binding agreement to sell its Geneva-based trust business, Rathbone Trust Company SA, to its management.
The news comes as the firm announces a drop in assets under management by 20% last year from to £10.4bn from £13.2bn as worried clients lose confidence and redeem their holdings, and the falling markets wipe value off stocks.
However, Rathbones claims it is still looking to grow its staff numbers and funds under management grew by 7.3% over the year.
This is the third time in six months the firm has spun-off an offshore trust. Two months ago Rathbones Trusts in Jersey was spun-off by its parent Rathbone Brothers and renamed Hawksford International as part of a mangement buyout.
The Singapore trust unit was also spun-off.
Rathbones is also in discussions regarding the possible sale of the British Virgin Islands-based trust business to its management.
Rathbones said in a trading statement, funds managed by its investment arm, Rathbone Investment Management, were £9.4bn as at 31 December 2008, down 16% from £11.2bn the previous year.
Funds managed by Rathbone's trust management arm fell to £1bn last year, a decrease of 45.5%.
Rathbones said in common with other market participants, net unit trust redemptions during the year were high, comprising some £234m.
The asset manager said: "Whilst investment markets are expected to remain challenging, Rathbones continues to focus on investment management, emphasising the value of close personal attention to the individual needs and circumstances of each client. It is therefore well-positioned to take advantage of organic growth opportunities. Rathbones remains well-capitalised with minimal borrowings and does not make any use of the wholesale market to fund its operations."
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