Rathbone expands funds with purchase

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RATHBONE Brothers, the private client investment manager, has added pounds 80m to its funds under management with the pounds 1.3m purchase of Hilbre Investment Management, a small Liverpool firm, writes Paul Durman.

The deal, funded by the issue of 683,000 new shares, increases to pounds 780m the amount Rathbone manages for clients. Hilbre was set up last year by fund managers formerly with Ashton Tod McLaren, a Liverpool stockbroker. Hilbre's three directors are staying on.

Rathbone announced the purchase alongside a 24 per cent rise in interim pre-tax profits to pounds 2m. Earnings per share for the six months to 30 June were 17 per cent ahead at 8.03p and the interim divided was raised by 20 per cent to 1.5p.

Investment management contributed about pounds 1.3m of profits. The rest came from trust management ( pounds 400,000), private banking ( pounds 200,000) and financial advice and tax planning ( pounds 100,000).

Rathbone said it was cautious about the outcome for the year because of its reliance on share markets. However, it said it would not suffer significantly from recent market falls because it derived the bulk of its investment management income from dealing commissions and interest rather than from management fees.

Shares in Rathbone, which stepped up to a full listing earlier this year, were 1p higher at 193p.