TIDMREC
RNS Number : 6102Z
Record PLC
18 January 2011
RECORD PLC
THIRD QUARTER TRADING UPDATE
Record plc ("Record" or the "Company"), the specialist currency
manager, announces today that as at 31st December 2010 the Group's
assets under management equivalents ("AuME") totalled $31.4 billion
(30th September 2010: $30.8 billion).
AuME expressed in Sterling as at 31st December 2010 totalled
GBP20.1 billion (30th September 2010: GBP19.5 billion).
1 AuME composition
Record saw an increase in AuME when expressed in both US Dollars
and Sterling during the period between 30th September 2010 and 31st
December 2010. The composition of AuME at 31st December 2010 was as
follows:
AuME $ bn
----------------------------------------------------------------
31 December 2010 30 September 2010
--------------------- ------------------- --------------------
Currency for Return
Segregated 2.7 2.1
Pooled 1.3 1.9
-------- --------
Currency for Return
Sub Total 4.0 4.0
Dynamic Hedging 11.7 11.5
Passive Hedging 15.3 14.8
Cash & Futures 0.4 0.5
--------------------- -------- --------- -------- ----------
Total 31.4 30.8
--------------------- -------- --------- -------- ----------
2 AuME MOVEMENT
Net client AuME flows in the three months to 31st December 2010
by product were as follows:
Net client AuME flows - $ bn
--------------------------------------------------------------------------
3 mths to 31 December 3 mths to 30 September
2010 2010
--------------------- ------------------------ -------------------------
Currency for Return
Segregated 0.5 (0.6)
Pooled (0.6) (0.7)
----------- ------------
Currency for Return
Sub Total (0.1) (1.3)
Dynamic Hedging - -
Passive Hedging 0.2 0.6
Cash & Futures (0.1) (0.2)
--------------------- ----------- ----------- ------------ -----------
Total 0.0 (0.9)
--------------------- ----------- ----------- ------------ -----------
The inflow of $0.5 billion into segregated Currency for Return
mandates represents an increase in mandate size by an existing
client for which Record implements a bespoke return seeking
programme.
Record had 47 clients at 31st December 2010, compared to 57 at
30th September 2010.
The factors other than client flows which impacted AuME during
the quarter, totalling $0.6 billion, were:
(i) Exchange rate movements: $0.4bn
Exchange rate movements during the period
affect the conversion of non-US Dollar mandate
sizes into US Dollar AuME;
(ii) Movements in global stock and other markets: $0.2bn
Substantially all the Passive and Dynamic
Hedging, and some of the Currency for Return
mandates are linked to stock and other market
levels. Consequently AuME is affected by movements
in these markets;
(iii) Pooled fund investment performance: $0.0bn
Investment returns are compounded on a geared
basis into the AuME of the pooled funds and
so impact AuME.
Investment performance in Record's established Currency for
Return product was negative during the quarter ending 31st December
2010 and for an un-geared portfolio equated to a negative return of
-1.01% over the quarter (6 months to 30th September 2010: negative
return of -2.49%). This compares to a positive return in the
quarter of 1.20% for the FTSE Currency FRB10 index (excess return
in Sterling), driven by the index's greater exposure to less liquid
currencies and absence of risk management costs.
3 AVERAGE FEE RATES
During the quarter to 31st December 2010, fee rates for both
Passive and Dynamic Hedging were maintained. Whilst individual
client fee rates remained unaltered for both pooled and segregated
Currency for Return clients, the change in business mix resulted in
a marginal reduction in average management fee rates.
4 CHIEF EXECUTIVE'S COMMENT
Chief Executive James Wood-Collins, commenting on trading, said
"Our Dynamic Hedging product continues to perform as expected by
allowing our clients to benefit from foreign currency strength and
protecting them from foreign currency weakness. Whilst it is
clearly disappointing not to have won any new mandates in the first
nine months, we have seen requests for proposals (RFPs) for Dynamic
Hedging and are hopeful that there could be further client
additions before the middle of 2011. We have also seen interest in
passive hedging and are pleased to have added additional AuME in
the quarter.
For the Currency for Return product, investment performance in
the first nine months has been negative with an overall return of
our Alpha Composite of -3.47%. The continuing poor performance and
the overall three year negative performance has led to further
client redemptions in the last quarter. We anticipate further
redemptions in the Currency for Return product before the end of
the financial year. We remain confident in the long-term
performance and committed to the long-term investment strategy for
this product. During this challenging period we have continued to
communicate the investment philosophy and long term track record
with investment consultants and our clients.
In December we launched our first index tracking product, the
FTSE FRB10 Index fund, and our first emerging market fund, the
Emerging Market Currency fund. Both these products are being
marketed to new and existing clients and we are hopeful that we can
generate external subscriptions by the middle of 2011. We have been
encouraged by the reception that the new funds are having from
investment consultants."
Record will announce its fourth quarter trading update on 15th
April 2011.
For further information, please contact:
Record plc Tel: +44 (0) 1753 852 222
Neil Record
James Wood-Collins
Paul Sheriff
MHP Tel: +44 (0)20 7357 9477
Nick Denton
John Olsen
Vicky Watkins
Notes to Editors
Record plc
Record is a specialist currency manager and provider of currency
hedging services for institutional clients. Founded in 1983, Record
has established a market leading position as a currency manager.
Specifically, the Group has a leading position in managing Dynamic
Hedging and Currency for Return for institutional clients.
The Group has three principal product lines:
- Currency for Return, formerly known as Absolute Return, in
which Record enters into currency contracts for clients with the
objective of generating positive returns;
- Dynamic Hedging, formerly known as Active Hedging, where
Record seeks to eliminate the impact of currency movements on
elements of clients' investment portfolios that are denominated in
foreign currencies when these movements are expected to result in
an economic loss to the client but not to do so when they are
expected to result in an economic gain; and
- Passive Hedging, where Record seeks to eliminate fully or
partially the economic impact of currency movements on elements of
clients' investment portfolios that are denominated in foreign
currencies.
Record (LSE: REC) was admitted to trading on the London Stock
Exchange on 3rd December 2007.
This announcement includes information with respect to Record's
financial condition, its results of operations and business,
strategy, plans and objectives. All statements in this document,
other than statements of historical fact, including words such as
"anticipates", "expects", "intends", "plans", "believes", "seeks",
"estimates", "may", "will", "continue", "project" and similar
expressions, are forward-looking statements.
These forward-looking statements are not guarantees of the
Company's future performance and are subject to risks,
uncertainties and assumptions that could cause the actual future
results, performance or achievements of the Company to differ
materially from those expressed in or implied by such
forward-looking statements.
The forward-looking statements contained in this document are
based on numerous assumptions regarding Record's present and future
business and strategy and speak only as at the date of this
announcement.
The Company expressly disclaims any obligation or undertaking to
disseminate any updates or revisions to any forward-looking
statements contained in this announcement whether as a result of
new information, future events or otherwise.
This information is provided by RNS
The company news service from the London Stock Exchange
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