Flexible Sector Leads AIC Sales in Q2

It was also the most popular in terms of net demand, according to ISS Financial Clarity data compiled for the Association of Investment Firms.

Flexible investing accounted for 18% of purchases in Q3 2022, widening the gap with the world’s second largest sector, which accounted for 10% of purchases.

In the second quarter, flexible gained 17% and global 13%. Previously, the global sector had been the most purchased sector for the previous five years (20 quarters).

“Buying opportunities are better than ever” for investment funds

The flexible investment industry includes “capital preservation” investment companies such as Capital Gearing, Personal Assets and Ruffer Investment Company.

It is also home to RIT Capital Partners and Caledonia, which invests in both public and private markets and whose largest holding is Seven Investment Management.

Elsewhere, the private equity sector gained popularity in the third quarter, rising from 14th to fifth place in terms of net demand.

This suggests that bargain hunters may have been active in the market. Investment companies in the sector traded at an average discount of 33% during the quarter.

Year-to-date, 2022 has been a strong year for investment company sales.

Purchases of investment firms on adviser platforms totaled £334m in the third quarter of the year, down 7% from the previous quarter but up 20% from the same quarter of 2021 (Q3 2021: £279m).

This contrasts with the broader trend in purchases of all products on advisor platforms which fell 9% year-on-year, from £46bn in Q3 2021 to £41.7bn in the third quarter of 2021. last trimestre.

Nick Britton, Head of Intermediate Communications at AIC, said: “In times of trouble, financial advisers and wealth managers turn to flexible friends – those investment firms with a mandate to invest in a combination of different assets.

“However, there are also signs of bargain hunting in heavily discounted sectors such as real estate, private equity and small businesses, which are seen by some as offering value. The technology sector and media ranked seventh in net demand during the quarter, its highest ranking since the early days of the Covid pandemic.”

‘Excessive’ discounts offer PE trust buying opportunity despite short-term woes

In the third quarter of 2022, 2,094 companies bought investment companies, including 1,936 financial advisory firms and 45 wealth managers. This is the highest total figure since the third quarter of 2021.

Most of these purchases were made via the Transact platform, which accounted for 58% of the purchases tracked by ISS Financial Clarity.

Other advisor platforms taking a share of buys from investment firms include 7IM (11%), Ascentric (11%) and FundsNetwork (9%).

Sallie R. Loera