Market volatility has taken its toll on a host of asset and wealth managers, with Liberum predicting they will suffer.
The investment bank has put together a note from its financial analysts Daryl Smith and Justin Bates outlining a downgrade in its target pricing for several companies including: Schroders, Man Group, Jupiter, Hargreaves Lansdown, Brooks Macdonald and Aberdeen.
However, the news is not all doom and gloom – there have been no revisions of the groups ‘buy’ or ‘hold’ ratings. Indeed none of the companies have been given a ‘sell’ recommendation.
The note commented: “We have downgraded most of the asset and wealth managers in light of the Q1 2016 market rout. We expect volatility to remain a key feature of markets over the coming 12 months.
“Given the market correction we see a lot of value in our coverage universe but are conscious of short-term pressures.”
According to the analysts, they considered technological developments, margin pressures and increasing costs as they weighed up the balance sheet and market impact. Aberdeen is said to offer the highest yield across this diverse financial sector; while Brooks Macdonald was seen as the “most comfortable”. Meanwhile, Ashmore and Hargreaves Lansdown were seen as the “least comfortable”. However, at the same time, Hargreaves Lansdown was put forward as a “winner” because of its progression in market share – during 2015 the market share was at 37 per cent, and this was predicted to rise to 59 per cent.
Meanwhile, both Bates and Smith and Aberdeen reduced their earnings per shares forecasts for 2016 by 15 per cent and eight per cent for 2017. Wealth Professional
reached out to Aberdeen for comment but they declined to react to analyst notes.