A person familiar with the firm, which manages £4.9 billion, confirmed Premier was overweight UK equities going into the referendum.
According to a review of the Guildford-based company by its broker Numis, seen by Financial News, Premier’s funds lagged their benchmarks by 3.1 percentage points in the 12 months to June. Over the same period 16% of their assets were top or second quartile. The data excludes Premier’s absolute return and volatility-driven funds.
The hit made a more modest dent to the group’s long-term outperformance. Over three years Numis said 96% of Premier’s assets were managed by funds in the top or second quartile.
Sterling and many London shares were badly hit when the referendum result was announced. Within two days the FTSE 250 was down nearly 14%. Shares – but not sterling – bounced back in the following weeks and this shows through in Premier’s more recent performance data.
The Numis report says that by the end of the 12 months to July Premier’s funds had cut their underperformance by 1.2 percentage points to 1.9 percentage points. Over three years, they outperformed by an annualised 1.6 percentage points. Over five, they were 2.5 over par.
Premier is best known as a retail manager. It wants to list its shares to restructure its equity capital with a view to commencing dividend payments. It has seen strong inflows over the years, including the year to June, where it was ranked fifth in terms of net UK retail sales.
Strong cash flow helped Premier to produce impressive operating margins of 69% on an adjusted basis, significantly ahead of the 51% generated by its UK retail rival Jupiter Fund Management and an average of 40% for UK listed managers.
Premier is confident of growth, thanks to the long-term record of its multi-asset and income funds, despite the headwinds asset management is facing. According to Numis, Premier should achieve net yearly inflows of £850 million in the year to September. Premier’s market value could achieve £150 million, it says.
As a result of a float, private equity firm Electra is expected to sell its equity in the company.
Premier chairman Mike Vogel, renowned for building up boutique manager Framlington, sold to Axa in July 2005, expects to sell between 25% and 50% of his interest in Premier, held through Elcot Capital Management.
Multi-asset funds comprise 51% of Premier’s assets, according to Numis, and David Hambidge’s £1.06 million multi-asset fund, the largest managed by Premier, was one of the funds contributing to the overall hit.
In the 12 months to June the fund was 3.2 percentage points below its benchmark, by the end of July this gap had reduced to 2.2 percentage points.