Quilter's managed assets rise on higher third-quarter inflows, shares jump

By Yamini Kalia

(Reuters) -Shares of British wealth manager Quilter rose almost 9% on Wednesday after it reported a rise in third-quarter assets under management, as more clients poured money into its funds, taking net inflows to 1.4 billion pounds ($1.82 billion).

While Quilter enjoyed a strong quarter, worries about potential changes to taxation and pension funds during finance minister Rachel Reeves' Autumn budget at the end of the month have dampened client confidence.

CEO Steven Levin told Reuters that the company remains optimistic about the future even though the market is expecting a tough budget, adding that ambiguity about where the pain is going to be felt has left clients unsure of their next moves.

Despite that, falling interest rates are expected to make for a steady fourth quarter, Levin added.

A sharp fall in UK inflation in September has bolstered expectations of another Bank of England interest rate cut next month.

Quilter's net inflows were well above quarterly expectations and equivalent to current consensus for the whole of the second half of the year, Panmure Liberum analyst James Allen said.

Shares of the FTSE midcap firm rose as far as 154.2 pence in early trading, an almost 3-year high and taking year to date gains to 49%.

Strong new business momentum along with a slowdown in client withdrawals offset the impact of a stronger pound during the quarter.

The London-based company reported AUM of 116.2 billion pounds at the end of September, up from 113.8 billion pounds at the end of June.

Last week Jupiter Fund and Liontrust Asset Management, which like Quilter are also exposed to the UK market, both reported a drop in managed assets as the approaching budget dampened investor confidence.

($1 = 0.7677 pounds)

(Reporting by Yamini Kalia in Bengaluru; Editing by Rashmi Aich, Kirsten Donovan)