September 26, 2012 / 8:21 AM / 5 years ago

UPDATE 1-Liontrust attracts new cash, sees industry shake-up

* Net inflows of 88 mln stg in 3 months to end-Sept

* Assets under management increased to 2.36 bln stg

* Says new British regulations pose challenges

* Shares rise 4 percent

By Anjuli Davies

LONDON, Sept 26 (Reuters) - British fund manager Liontrust Asset Management’s strongly performing funds continued to attract new client money in the first half of the year, it said on Wednesday, though it warned new regulations posed challenges to the industry.

Liontrust said in a half-year trading statement it had attracted 88 million pounds ($143 million) of net inflows in the three months ended September, up 11 percent on the quarter, boosting its assets under management to 2.36 billion pounds.

So far this year the London-based firm has drawn in 181 million pounds of new client cash, following nine successive quarters of pulling in more money than it lost.

News of the inflows helped send shares in Liontrust up 4 percent to 113.13 pence by 0800 GMT, outperforming the FTSE-All Shares index’s 1 percent rise.

“There is no better endorsement of our strategy than clients continuing to invest,” Chief Executive John Ions said in a statement.

Ions warned new British regulations due in 2013, that are set to shake-up the way financial advisers charge fees and promote products, could pose serious threats as well as opportunities for the industry.

“The changes brought on by RDR (the Retail Distribution Review) should not be underestimated,” he said. “An even greater amount of fund flows will be controlled by fewer more powerful distributors.”

Central bank action to boost flagging economies has helped spur strong gains in stock markets over the past few months, boosting demand for equity fund products, although jitters about the euro zone debt crisis mean clients remain nervous.

Earlier this week Aberdeen Asset Management reported net outflows in the two months ended August.

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