First Quarter Trading Update

RNS Number : 5519Z

Record PLC

22 July 2008

 

 22 July 2008

RECORD PLC

FIRST QUARTER TRADING UPDATE

Record plc ('Record' or the 'Company'), the specialist currency investment manager, announces today that as at 30th June 2008 the Group's assets under management equivalents ('AuME') totalled $56.2 billion (31st March 2008: $55.7 billion).  

1   AuME composition

Record continued to grow AuME and client numbers during the period between 31st March 2008 and 30th June 2008.  The composition of the AuME at 30th June 2008 was as follows:

AuME $ bn
	30 June 2008		31 March 2008
Absolute Return
Segregated	13.9		14.1
Pooled	16.5		14.9
Absolute Return Sub Total		30.4		29.0
Active Hedging		5.3		5.0
Passive Hedging		17.4		18.3
Cash & Futures		3.1		3.4
Total		56.2		55.7

2   AUME Growth 

Net client AuME flows in the three months to 30th June 2008 by product were as follows:

Net Client AuME flows - $ millions
	3 mths to 30th June 2008		3 mths to 31 March 2008
Absolute Return
Segregated	(454)		875
Pooled	391		1,098
Absolute Return Sub Total		(63)		1,973
Active Hedging		200		434
Passive Hedging		(1,085)		697
Cash & Futures		17		229
Total		(931)		3,333

Record had 147 clients at 30th June 2008, compared to 141 at 31st March 2008.  Seven new clients invested in the pooled absolute return product.

One client loss during the first quarter reduced Passive AuME by $1.0bn and Absolute Return AuME by $0.3bn.  The factors other than client flows which impacted AuME during the quarter were: 

(i)                  Pooled fund investment performance:                                   +$1.2bn              Investment returns are compounded on a geared basis into the AuME of the pooled funds and so impact AuME. This was positive and the most significant factor influencing AuME in the quarter; and

(ii)                Movements in global stock and other markets:                   +$0.6bn              Substantially all the Passive and Active Hedging, and some of the Absolute Return mandates are linked to stock and other market levels. Consequently Record’s AuME is affected by movements in these markets which had a positive impact in the quarter;

(iii)               Exchange rate movements:                                                 -$0.4bn 
Exchange rate movements during the period affect the conversion of non-US dollar mandate sizes into US dollar AuME which resulted in a reduction in AuME valuation during the quarter.

Investment performance in Record's Absolute Return product was positive in each month of the quarter ending 30th June 2008 and for an un-geared portfolio equated to 90 bps over the quarter as a whole.  While concerns over credit persist in the markets, the unusually high correlation between currency and equity returns experienced during the second half of calendar year 2007, now appears to be returning to low correlation which has been the long term norm.  Record's directors are encouraged by these developments and maintain their confidence in the investment process.

3    AVERAGE FEE RATES 

During the quarter to 30th June 2008, average management fee rates were maintained across all product categories. Modest performance fees were earned during the quarter. 

Chairman and CEO, Neil Record, commenting on trading, said 'We are encouraged by the recent performance of the Absolute Return investment process and by the apparent return to the long term low correlation between currency and equity returns.  During the recent challenging environment we have been supported by the high quality relationships we have developed with investment consultants and with our clients, which are based on our long term track record and our commitment to communicate. We will continue to work hard to maintain these relationships and to communicate information on market developments and the implications for Absolute Return investment performance.' 

For further information, please contact:

Record plc                                                                                             Tel: [phone]

Neil Record

Mike Timmins

Hogarth                                                                                                    Tel: [phone]

Nick Denton

Julian Walker

  Notes to Editors

Record plc

Record is a specialist currency investment manager and provider of currency hedging services for institutional clients. Founded in 1983, Record has established a market leading position as a currency asset manager. Specifically, the Group has a leading position in managing currency for absolute return for institutional clients, a new asset class which the Directors expect to continue to increase in popularity with institutional investors, including defined benefit pension schemes, both in the United Kingdom and overseas.

The Group has three principal product lines:

–       currency for absolute return, in which Record enters into currency contracts for clients with the objective of generating positive returns;

–        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 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.  

 

END

 

 

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