Adviser purchase of investment companies hits record in 2017

Thursday, 11 January 2018 07:38

The latest research from the Association of Investment Companies, the trade body for investment trusts and investment companies, has revealed that purchases of investment companies by advisers and wealth managers on adviser platforms surged to a record level of £745m in the first nine months of 2017.

The figure beat the total for 2016 (£671m) and 2015 (£698m), the previous record. The research used data from Matrix Financial Clarity.

In Q3 2017 investment company purchases totalled £235m, up 35% on the same quarter of 2016 (£175m). However, quarterly purchases were lower than in Q1 2017 (£252m) or Q2 2017 (£257m), reflecting the trend in platform purchases of all products, says the AIC, which fell in Q3 relative to the previous two quarters.

The most popular sectors in Q3 2017 were Global (18%), UK Equity Income (10%), Property Direct – UK (10%) and Property Specialist (8%). Two of the four most popular sectors were property related. Fourth was the highest ranking for the Property Specialist sector since records began.

The quarter saw the launch of three new companies in the sector (Residential Secure Income REIT, Triple Point Social Housing REIT and Warehouse REIT) as well as fundraisings from Empiric Student Property and GCP Student Living.

Ian Sayers, chief executive of the AIC, said: “The latest quarterly data also shows the continuing popularity of property investment companies since the Brexit vote, and the problems experienced by open-ended property funds. There was significant fundraising in the quarter, and for the first time, property sectors made up two of the four most popular sectors for advisers and wealth managers.”

Other findings included:
• Total purchases on platforms were £29.7bn in Q3 2017, 13% up on Q3 2016, but lower than in Q1 2017 (£31.4bn) and Q2 2017 (£32.6bn).
• The main adviser platforms for investment company purchases during Q3 2017 were Transact with 41% of the market, followed by Alliance Trust Savings and Ascentric with 18% each. FundsNetwork took a 6% share, Raymond James 5% and 7IM 4%.