Client rebalancing leads to Insignia outflows
Insignia Financial has experienced total net outflows of $1.8 billion in the most recent quarter as a result of client rebalancing.
In its quarterly results for the three months to 31 March, it said total net outflows were $1.8 billion driven by institutional outflows within low-margin direct asset management capabilities due to client rebalancing.
During the previous quarter, Insignia had received $3 billion into its domestic fixed income capability as a result of an existing institutional client consolidating managers. But in this quarter, it said a “significant proportion” of these funds were subsequently redeemed due to rebalancing and asset allocation requirements of the client.
“Institutional net flows can be volatile quarter-on-quarter, particularly within fixed income due to the large institutional client base who use the capability’s cash and enhanced cash strategies as a source of short-term liquidity.”
This led funds under management and administration (FUMA) to decrease by $5 billion to $321.8 billion. FUM, specifically in asset management, was $94.2 billion, down 1.2 per cent, which was driven by $1.5 billion in net outflows but partially offset by positive market movement of $346 million.
It saw net inflows of $325 million into its multi-asset capability, which reflects the benefit of increasing flows from the advised wrap product, it said, but had outflows of $179 million as a result of market movement.
“In multi-asset, net inflows of $325 million were primarily driven by continued adviser take up of MLC’s managed accounts offering, with $177 million in net inflows for the quarter. In addition, net flows in the traditional retail multi-asset funds continued to trend positive supported by strong flows in Advised Wraps.”
The quarter’s multi-asset flows are less than half the volume experienced during the previous quarter, when it saw multi-asset inflows of $663 million including $297 million into MLC managed accounts.
Funds under administration on its wrap platform were $97.7 billion, and its MLC Expand Advised suite of products saw $498 million in net inflows compared to $564 million in the previous quarter.
Insignia chief executive, Scott Hartley, said: “We continued to make progress on our strategic initiatives during the quarter and have delivered another quarter of promising net flows in strategically important channels.”
During the quarter, it enacted due diligence with two private equity bidders – Bain Capital and CC Capital – and subsequently announced that this has been extended beyond the original six-week timeline by an additional month.
AUTHOR
Laura Dew
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