C O U R A G E · P O W E R · P R I D E
A N N U A L R E P O R T A N D F I N A N C I A L S T A T E M E N T S 2 0 2 3
L I O N T R U S T A S S E T M A N A G E M E N T P L C
OUR PURPOSE
Our purpose is to enable investors to enjoy a better financial future.
INSIDE THIS REPORT
Financial highlights
Governance
Highlights and Key performance measures
4
Board of Directors
Strategic Report
Chair’s Statement
Chief Executive’s report
Our strategy
Our business model
Financial review
Sales and marketing review
Operations review
Principal risks and mitigations
Our People
Responsible Capitalism
12
14
16
24
30
38
44
46
64
70
Risk management and internal controls report
Corporate Governance report
Directors’ report
Directors’ responsibility statement
Nomination Committee report
Audit & Risk Committee report
Remuneration report
Financial Statements – Group and Company
Consolidated Statement of Comprehensive Income
Consolidated Balance Sheet
Consolidated Cash Flow Statement
Consolidated Statement of Changes in Equity
Notes to the Financial Statements
Company Financial Statements
Company Notes to the Financial Statements
Independent auditor’s report to the members of Liontrust
Asset Management PLC
Shareholder Information
2
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
78
83
86
97
102
103
108
112
142
143
144
145
146
180
183
188
197
3
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023 HIGHLIGHTS
ASSETS UNDER MANAGEMENT AND ADVICE
NET FLOWS
31 March
2023
6%
31 March
2023
£31,430 million
£(4,841) million
31 March
2022
31 March
2022
£33,548 million
£2,488 million
GROSS PROFIT
PROFIT BEFORE TAX
ADJUSTED PROFIT
BEFORE TAX*
3%
m
8
.
9
2
2
£
m
3
.
1
3
2
£
38%
m
3
.
9
4
£
m
3
.
9
7
£
10%
m
1
.
7
8
£
m
6
.
6
9
£
2022
2023
2022
2023
2022
2023
DILUTED EARNINGS
PER SHARE
ADJUSTED DILUTED
EARNINGS PER
SHARE*
TOTAL DIVIDEND
PER SHARE
37%
e
c
n
e
p
1
2
.
1
6
e
c
n
e
p
1
6
.
7
9
14%
e
c
n
e
p
8
7
.
9
0
1
e
c
n
e
p
3
6
.
7
2
1
0%
e
c
n
e
p
2
7
e
c
n
e
p
2
7
2022
2023
2022
2023
2022
2023
*These are Alternative Performance Measures. See Page 34 for further details.
4
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
FINANCIAL HIGHLIGHTS
ASSETS UNDER MANAGEMENT AND ADVICE
On 31 March 2023, our AuMA stood at £31,430 million and were broken down by type and investment process as follows:
Institutional
Accounts &
Funds
(£m)
Investment
Trusts
(£m)
UK Retail
Funds & MPS
(£m)
Alternative
Funds
(£m)
International
Funds &
nts
Acco
u
(£m)
347
430
–
–
543
1,074
–
2,394
–
–
–
–
–
1,139
–
1,139
10,286
7,242
4,810
619
747
1,886
131
25,721
–
–
242
–
140
702
–
1,084
577
224
–
–
7
54
230
1,092
Total
(£m)
11,210
7,896
5,052
619
1,437
4,855
361
31,430
31 MARCH
2022
£33,548m
Decrease of
6%
over the financial year
Process
Sustainable Investment
Economic Advantage
Multi-Asset
Global Innovation
Cashflow Solution
Global Fundamental
Global Fixed Income
Total
31 MARCH
2023
£31,430m
NET FLOWS
Liontrust recorded net outflows of £4,841 million in the financial year to 31 March 2023 (2022: £2,488 million inflows). A
reconciliation of net flows over the financial year is as follows:
Opening AuMA – 1 April 2022
Net flows
Market and Investment performance
Majedie acquisition
Closing AuM – 31 Mar 2023
31 MARCH
2023
£(4,841)m
Institutional
Accounts &
Funds
£m
1,408
(1,148)
(177)
2,311
2,394
Total
£m
33,548
(4,841)
(2,425)
5,148
31,430
Investment
Trusts
£m
UK Retail
Funds & MPS
£m
Alternative
Funds
£m
0
(89)
(11)
1,239
1,139
30,113
(3,185)
(2,085)
878
25,721
370
274
45
395
1,084
International
Funds &
Accounts
£m
1,657
(693)
(197)
325
1,092
31 MARCH
2022
£2,488m
5
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023FINANCIAL HIGHLIGHTS KEY PERFORMANCE MEASURES
Fund management ability and investment performance
The strength of Liontrust’s fund managers and investment processes
is shown by the fact that over the period from launch or fund
manager appointment to the end of each of the most recent
three financial years, on an AuMA weighted basis, we have
consistently had over 60% or more of our actively managed UK
retail AuMA in first quartile funds1 (see Figure 1).
Figure 1 – AuMA weighted quartile ranking since launch or
manager inception (covers 71% of AuMA).
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
FY21
FY22
FY23
First Quartile
Second Quartile
Third Quartile
Fourth Quartile
1net of fees and income reinvested. See UK Retail fund
performance on pages 7 to 9.
Net flows
Net flows in the year have fallen to £(4,841) million from
+£3,498 million two years ago and from +£2,488 million
last year.
Figure 2 – Net flows £’million
A Profitable and Growing business
Our AuMA has decreased by 6% from 31 March 2022
to 31 March 2023 and increased by 2% from 31 March
2021 to 31 March 2023, reflecting acquisitions, market
performance and net flows (see figure 3).
Figure 3 – AuMA by investor type £’million
40,000
35,000
30,000
25,000
20,000
15,000
10,000
5,000
0
FY21
FY22
FY23
UK Retail Funds & MPS (£’m)
Alternative Funds (£’m)
Institutional Accounts & Funds (£’m)
International Funds & Accounts (£’m)
Investment trusts (£’m)
Adjusted profit before tax*
Our adjusted profit before tax has decreased by 10% from 31
March 2022 to 31 March 2023 and increased by 47% from
31 March 2021 to 31 March 2023.
Figure 4 – Adjusted profit before tax* £’million
100
80
60
40
20
0
FY21
FY22
FY23
FY21
FY22
FY23
£4,000
£3,000
£2,000
£1,000
£0
(£1,000)
(£2,000)
(£3,000)
(£4,000)
(£5,000)
*These are Alternative Performance Measures. See Page 34 for further details.
6
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
FINANCIAL HIGHLIGHTS SPLIT OF AUMA
BY PRODUCT TYPE
BY INVESTMENT PROCESS
UK Retail Funds & MPS
82%
Institutional Accounts & Funds
Investment Trusts
Alternative Funds
International Funds & Accounts
8%
4%
3%
3%
Sustainable Investments 36%
Economic Advantage
25%
Multi-Asset
Global Fundamental
Cashflow Solution
Global Innovation
Global Fixed Income
16%
15%
5%
2%
1%
UK RETAIL FUND
PERFORMANCE
The strength of Liontrust’s fund management capability is shown
by the weighted average AuMA of our actively managed unit
trusts and ICVCs. Since launch or since the fund managers
were appointed 64% were in the first quartile.
AUMA WEIGHTED
PERFORMANCE
(SINCE LAUNCH/MANAGER
INCEPTION)
%age of AuMA covered
First Quartile
Second Quartile
Third Quartile
Fourth Quartile
64%
20%
16%
0%
7
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023FINANCIAL HIGHLIGHTS UK Retail Fund Performance (Quartile ranking)
Detailed quartile rankings by fund over one, three and five years and since launch date or fund manager appointment are shown
in the table below:
Quartile ranking
– Since Launch/
Manager
Appointed
Quartile
ranking
– 5 year
Quartile
ranking
– 3 year
Quartile
ranking
– 1 year
Launch Date/
Manager
Appointed
ECONOMIC ADVANTAGE FUNDS
Liontrust UK Growth Fund
Liontrust Special Situations Fund
Liontrust UK Smaller Companies Fund
Liontrust UK Micro Cap Fund
SUSTAINABLE FUTURE FUNDS
Liontrust SF Monthly Income Bond Fund
Liontrust SF Managed Growth Fund
Liontrust SF Corporate Bond Fund
Liontrust SF Cautious Managed Fund
Liontrust SF Defensive Managed Fund
Liontrust SF European Growth Fund
Liontrust SF Global Growth Fund
Liontrust SF Managed Fund
Liontrust UK Ethical Fund
Liontrust SF UK Growth Fund
GLOBAL INNOVATION FUNDS
Liontrust Global Dividend Fund
Liontrust Global Innovation Fund
Liontrust Global Technology Fund
GLOBAL FUNDAMENTAL GLOBAL EQUITY FUNDS1
Liontrust Balanced Fund
Liontrust China Fund
Liontrust Emerging Market Fund
Liontrust Global Smaller Companies Fund
Liontrust Global Alpha Fund
Liontrust India Fund
Liontrust Japan Equity Fund
Liontrust Latin America Fund
1
1
1
1
1
2
1
1
1
3
3
2
3
3
2
1
3
1
4
3
1
1
4
2
3
1
1
1
1
2
1
3
2
1
4
1
1
3
3
1
4
2
1
4
4
3
1
3
2
3
3
3
2
1
1
2
2
4
4
4
4
3
4
4
3
4
3
3
3
4
4
3
1
1
4
1
3
2
1
2
4
3
4
4
4
4
4
4
4
4
4
4
4
3
4
4
4
2
1
4
25/03/2009
10/11/2005
08/01/1998
09/03/2016
12/07/2010
19/02/2001
20/08/2012
23/07/2014
23/07/2014
19/02/2001
19/02/2001
19/02/2001
01/12/2000
19/02/2001
20/12/2012
31/12/2001
15/12/2015
31/12/1998
31/12/2004
30/09/2008
01/07/2016
31/12/2001
29/12/2006
22/06/2015
03/12/2007
8
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
FINANCIAL HIGHLIGHTS Quartile ranking
– Since Launch/
Manager
Appointed
Quartile
ranking
– 5 year
Quartile
ranking
– 3 year
Quartile
ranking
– 1 year
Launch Date/
Manager
Appointed
CASHFLOW SOLUTION FUNDS
Liontrust European Dynamic Fund2
GLOBAL FIXED INCOME FUNDS
Liontrust Strategic Bond Fund
GLOBAL FUNDAMENTAL TEAM FUNDS3
Liontrust UK Equity Fund
Liontrust UK Focus Fund
Liontrust Income Fund
Liontrust UK Equity Income Fund
Liontrust US Opportunities Fund
Edinburgh Investment Trust Plc4
Liontrust Global Equity Fund
Liontrust Global Focus Fund
Liontrust GF US Equity Fund
Liontrust GF UK Equity Fund
Liontrust GF International Equity Fund
1
3
1
1
1
2
2
1
2
2
3
4
2
1
— —
3
3
4
3
1
1
3
3
3
2
4
3
— —
— —
2
2
2
3
— —
2
2
2
3
3
2
15/11/2006
2
08/05/2018
2
3
2
4
4
1
3
2
3
2
3
27/03/2003
29/09/2003
31/12/2002
19/12/2011
31/12/2002
27/03/2020
30/06/2014
30/06/2014
26/06/2014
03/03/2014
17/12/2019
Financial Express to 31 March 2023 as at 5 April 2023, bid-bid, total return, net of fees, based on primary share classes. Past
performance is not a guide to future performance, investments can result in total loss of capital. The above funds are all UK authorised
unit trusts or UK authorised ICVCs (primary share class).
1Liontrust Russia Fund is not included as it is currently suspended and in an IA sector that is not rankable (e.g. Specialist).
2Renamed from Liontrust European Growth fund
9
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023FINANCIAL HIGHLIGHTS STRATEGIC REPORT
Chair’s Statement
Chief Executive’s report
Our strategy
Our business model
Financial review
Sales and marketing review
Operations review
Principal risks and mitigations
Our People
Responsible Capitalism
12
14
16
24
30
38
44
46
64
70
CHAIR’S STATEMENT
Introduction
As a Board, we are wholly focused on the long-term objectives
of your Company and the interests of shareholders, clients
and colleagues. We are convinced the business has the right
strategy to generate sustained growth over the longer term
and the management team to implement it. While the last
year has been challenging for the business, in terms of both
performance and net sales, the Group is financially robust,
and our belief in the effectiveness of the investment teams’
processes and the Distribution team’s ability to generate
growth for the business is steadfast. Our confidence in the
financial strength of Liontrust has allowed us to maintain the
full-year dividend at 72.0 pence per share.
Strategic overview
At the heart of what Liontrust stands for are the rigorous
and distinct processes of each of the investment teams.
Remaining true to and focused on these processes, even
when the economic and market environment is against them,
has enabled the teams to deliver for their clients over the
long term. The Board has been impressed by the continued
strength of the teams’ convictions in their individual processes
over the past year and this gives us confidence that Liontrust
will achieve the strategic aim of delivering market leading
investment performance over the longer term. We have full
confidence in Liontrust’s sales and marketing strategy; and its
ability to deliver our strategic aims of expanding distribution
and our client base whilst also enhancing the investor
experience. The engagement that is being generated through
events, webinars and content demonstrates the breadth of
coverage of our distribution.
While the year has been difficult with net outflows of £4.84
billion, the continuing strength of distribution and investor
engagement is reflected in the relatively strong gross sales that
the Company has been generating. Over the 2022 calendar
year and in the fourth quarter of 2022, Liontrust had the
seventh largest gross retail sales in the UK, according to the
Pridham Report, despite UK equity strategies continuing to be
out of favour with investors. The Board appreciates the trust
that clients put in Liontrust and the investment teams, and we
do not take this loyalty for granted. The proposed acquisition
of GAM Holding AG presents a significant opportunity
for us as a Group to enhance our investment capability,
physical distribution and the service we provide clients; it
will accelerate progress against our seven strategic pillars
and enable the Group to become a global asset manager.
While Liontrust has established a strong brand in the UK,
acquiring GAM will give us the foundations to replicate this
internationally through its global footprint. The Board believes
in the value that Liontrust and GAM can bring to each other,
and to our respective clients and shareholders. Liontrust has
made what we believe is a good offer for GAM and a
compelling case for why the acquisition works for all parties.
Delivering our responsibilities
We are committed to serving our clients and have always
taken our responsibility as managers of investors’ savings
very seriously. Client support and understanding has come
under increased focus in the UK with the introduction of the
FCA’s Consumer Duty and Liontrust believes we are well
positioned to show how we are delivering the outcomes
expected under this new standard.
The Board is committed to ensuring that Responsible
Capitalism is integral to Liontrust’s overall strategy and
that this resonates throughout the business and any future
acquisitions. Responsible Capitalism covers both Liontrust’s
operations and investments.
From an operational perspective, Liontrust is committed
to understanding and managing well its key risks and
opportunities, which include attracting and retaining talent,
preventing internal fraud, managing cyber security, and
keeping up to date with legislative changes. We are furthering,
where possible, the integration of ESG considerations into
our investment processes, practicing effective stewardship
and evidencing and reporting on this work on a
regular basis.
12
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
STRATEGIC REPORT “ The proposed acquisition of GAM Holding AG presents a significant opportunity
for us as a Group to enhance our investment capability, physical distribution
and the service we provide clients; it will accelerate progress against our seven
strategic pillars and enable the Group to become a global asset manager”
ALASTAIR BARBOUR
CHAIR
Liontrust is a member and supporter of the Net Zero Asset
Manager’s Initiative and also committed to achieving net
zero greenhouse gas emissions by 2050 across our own
business and investments. Liontrust is also currently working to
understand its own, operational, impacts from a biodiversity
perspective as well as the impact in this area of the investments
it makes on behalf of clients.
We report on these all activities and our progress in this
area in the Liontrust Responsible Capitalism report that was
published in April this year.
Of equal importance is our commitment is to our employees
and members, and one of our seven strategic pillars is to
attract and develop talent. The Group is focused on offering
all staff development opportunities, good benefits and
an environment in which they can flourish. This year, we
continued to strengthen our leadership team, both through
new hires and investing in a formal development programme
to promote our leaders and develop consistent leadership
capability for 2023 and beyond. The programme is not
limited to Heads of Department and will be rolled out further
in the coming year, giving development opportunities to a
wide group of employees.
We are pleased that our annual workforce engagement survey
had a greater participation rate of 82% this year against
79% last year. Based on feedback from our survey provider,
this is higher than industry averages, which are in the mid-
60s. As participation is a proxy for engagement, this is a
positive result. By delivering policies based on colleagues’
feedback, Liontrust continues to offer an attractive working
environment. Liontrust is also committed to diversity and
inclusion, which is an ongoing objective and one where we
are continuing to make progress. The Diversity and Inclusion
Committee chaired by our CFO/COO has been instrumental
in organising events through Pride, Black History Month and
around International Women’s Day in March. The Committee
has also organised training for all colleagues, which goes
towards creating an inclusive culture where colleagues can
flourish. I can see this supported by the survey results, in
which 92% of colleagues agreed ‘I feel like I can be myself
at Liontrust’.
Liontrust has not stood still over the past year, and I want to
thank all our colleagues for their hard work and dedication
over the period.
individually as directors and collectively as a Board, sets
the tone from the top. The boardroom is a place for robust
debate and constructive challenge which, together with
support, diversity of thought and teamwork, are essential
features for the operation of an effective Board.
In March, two Non-Executive Directors tendered their
resignations from the Board. While their departure is
regrettable, the Board is satisfied that it continues to meet
those essential features of an effective board.
I have set out in my Nomination Report our carefully
considered succession plans. We are seeking to balance
speed of change, both for the Board and the Group, with
continuity and a careful and diligent selection process is in
place to ensure that new appointments are the right cultural
fit for the Board and Company.
Results
Adjusted profit before tax is £87.083 million (2022:
£96.556 million), a decrease of 10% compared to last
year. Adjusted profit before tax is disclosed in order to give
shareholders an indication of the profitability of the Group
excluding non-cash (intangible asset amortisation) expenses
and non-recurring (professional fees relating to acquisition,
cost reduction, restructuring and severance compensation
related) expenses, see note 5 below for a reconciliation of
adjusted profit before tax.
Dividend
The Board has declared a second interim dividend of 50.0
pence per share (2022: 50.0 pence) bringing the total
dividend for the financial year ending 31 March 2023 to
72.0 pence per share (2022: 72.0 pence per share).
The second interim dividend will be payable on 4 August
2023 to shareholders who are on the register as at 30 June
2023, the shares going ex-dividend on 29 June 2023. Last
day for Dividend Reinvestment Plan elections is 14 July 2023.
Looking forward
Despite the challenges of the past year, there has been
continued progress in ensuring that Liontrust can generate
sustained growth in the future. We have belief in our
investment teams and their processes delivering for our
clients. And we will continue to focus on our strategy in which
we have full confidence.
Board changes
The Board has reflected deeply on the way it carries out
its role. We are aware that the behaviours we display,
Alastair Barbour
Non-executive Chair
20 June 2023
13
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023STRATEGIC REPORT CHIEF EXECUTIVE’S REPORT
Introduction
The role of asset managers has never been more important.
Investors are seeking to secure their financial futures at a time
of having to navigate higher inflation, rising interest rates,
political instability and fragmentation in globalisation. While
cash has been seen by many people as an attractive home
for their savings in recent months, this will not deliver the real
returns to enable them to achieve their long-term objectives.
We believe these long-term financial objectives are best
achieved through the application of robust investment
processes. This is despite the inevitable periods when active
managers underperform and sentiment is negative about
particular markets and asset classes.
As I highlighted in last year’s Annual Report and Accounts,
the rotation from quality growth to value stocks had started to
impact the performance of many of our funds. While this has
continued over the past year, it does not detract from the proven
track record of our teams and their processes. This includes the
Sustainable Investment team, who have delivered strong returns
following previous periods of relative underperformance.
The compelling case for sustainable investment and finding
companies that will drive and benefit from the transition to a
cleaner, healthier and safer world has only been strengthened,
not lessened, by the events of the past year.
Our confidence is shown by the fact we are launching the
Liontrust GF Sustainable Future US Growth Fund in July. This
will enable investors to take advantage of the growing number
of sustainable opportunities in the world’s largest stock market,
particularly among mid cap stocks.
The economic and market environment also does not detract
from the strength of the Liontrust business.
Over the past decade, we have been building an asset
manager with excellent investment capability across our now
seven investment teams. For example, Edinburgh Investment
Trust (“EIT”) reached the three-year anniversary of being
managed by James de Uphaugh in March with strong relative
performance and a narrowing of the discount over that
period. Liontrust has worked with the board of EIT on
creating a brand and now marketing EIT to both
professional advisers and retail investors.
is
through
reflected
sales and marketing
teams have
Our
continued to regularly interact with clients,
face-to-face meetings,
whether
videos or written
events, webinars,
communications. This
in
impressive engagement such as 553
professional advisers watching our virtual
Sustainable Investment conference live,
more than 500,000 views of our videos,
a 19% increase in page views on the
Liontrust website over the past year,
and 85,000 clicks on our brand
advertising. Liontrust has been named
as the 6th strongest asset management
brand in the UK by Broadridge.
14
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
STRATEGIC REPORT “ Liontrust is financially strong and we have been investing in
digital marketing, performance data and the infrastructure
of the business to enhance our engagement with clients, the
investor experience and support growth”
JOHN IONS
CHIEF EXECUTIVE
Proposed acquisition of GAM Holding AG
The importance of our strategic objectives of (i) Expanding
distribution and our client base and (ii) Diversifying our fund
range has been clearly demonstrated over the past year.
The diversification in asset classes and a more international
distribution footprint are two of the principal reasons why we
have agreed the proposed acquisition of GAM Holding AG
(“GAM”).
The financial strength of Liontrust enables us to achieve these
acquisitions which in turn accelerate our strategic objectives.
Outlook
I am pleased with the development of the business and the
foundations that have been put in place for future growth even if
the past year has been more challenging in terms of net flows.
The expanded range of funds will offer the potential to grow
AuMA through marketing new funds to
existing clients, attract new clients and
exploit new distribution channels in markets
where Liontrust and GAM have strength
of distribution. It will also provide the
opportunity to grow distribution in markets
where there is currently little or a developing
presence.
6th
The investment teams and their processes have proven themselves
over the long term. The Sustainable Investment and Economic
Advantage teams are regarded as market
leaders in the UK and we have been
diversifying sales across other teams and
funds. Our brand is strong and we have
great reach through our sales and marketing.
Liontrust has been named
as the 6th strongest asset
management brand in the
UK by Broadridge.
Liontrust is financially strong and we
have been investing in digital marketing,
performance data and the infrastructure of
the business to enhance our engagement
with clients, the investor experience and
support growth.
The expanded number of asset classes and
styles of investment, led by highly regarded
fund managers, will also enable us to
reduce the correlation of returns across the
range and therefore increase the number of
funds that will be attractive to clients during different periods
of the market cycle. This will provide an investment proposition
that ensures Liontrust can sustain growth even when certain
styles of investment are out of favour with investors.
The positive response of the GAM investment teams and
clients to the proposed acquisition reflects the stability and
certainty of leadership that Liontrust will provide. We have
shown that integrating businesses which need support into the
Liontrust operating model leads to a stronger enlarged group.
The proposed acquisition of GAM gives us
the opportunity to accelerate Liontrust’s strategic development
by expanding the product range, the physical footprint of our
distribution and talent across the company.
It is for all these reasons that I look forward with confidence
about the future development of Liontrust.
John Ions
Chief Executive
20 June 2023
15
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023STRATEGIC REPORT OUR STRATEGY
Liontrust has seven principal strategic objectives:
1
Be a responsible
company and investor
2
Deliver market
leading investment
performance over the
longer term
3
Diversify the
fund range
4
Expand distribution
and the client base
5
Enhance the
investor experience
6
Attract and
develop talent
7
Develop the business
infrastructure to help
drive growth
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LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
STRATEGIC REPORT 1 BE A RESPONSIBLE COMPANY AND INVESTOR
Asset managers have a key role to play in providing
capital to enable businesses to grow and in helping
investors to achieve their financial objectives. We also have an
important role to play in supporting businesses and innovative
companies, working to allocate capital towards positive
outcomes including delivering products and services that benefit
the economy and society. Liontrust aims to achieve this through
the use of active management and proprietary investment
processes to identify companies that can generate sustained
growth and by investing in businesses for the long term.
Since 2001, the Liontrust Sustainable Investment team has been
seeking well-run companies that capitalise on transformative
themes that will shape the economy and society for the future.
Engagement is integral to the team’s process as it provides greater
insight into companies and helps to ensure best practice. Over
the past year, the Responsible Capitalism team has been working
with our other investment teams on evaluating ESG risks and
opportunities as part of their investment processes and engaging
with companies they hold, including through proxy voting.
Responsible Capitalism focuses on the material considerations
(as determined by our investment teams’ individual processes)
that could impact investments over the investable time horizon
of the funds. Understanding these risks and opportunities,
including those that are ESG related, can be part of
fundamental analysis in fund management, and may help our
investment teams be more aware of issues and make better
investment decisions over the longer term. Overall, integrating
these considerations may also help create shareholder value
and deliver investment performance for our clients.
Our clients are interested in knowing what their funds hold and
why they are held. They also want to know how Liontrust’s ESG
integration and stewardship practices affect the investment
decisions that impact longer-term fund performance. We aim
to report on this, as much as possible, from an evidenced-
based perspective so clients can see what is factored in when
our investment teams make decisions on their behalf.
Liontrust – across its business and investments – is committed
to achieving net zero greenhouse gas emissions by 2050.
The Group has undertaken this commitment as part of its
fiduciary duty to clients – to understand the key exposures that
its investments face and to make well informed decisions. The
Group also feels that this commitment helps it promote well-
functioning financial systems as it makes informed investment
decisions and takes responsibility for its own financed
emissions.
Liontrust values its people and aims to nurture a working
environment and culture that attracts talent to its business and
retains the talent that it has (see strategic pillar 6 – Attract and
develop talent – for more detail on this).
Being a responsible company and investor also means being
compliant with rules and regulations. This includes Consumer
Duty in the UK which came into force in two stages in April
and July 2023.
Outcomes: Each investment team at Liontrust has its own
methodology for considering ESG and other risks in its
investment process and engaging holdings on these issues.
Some teams were supported by the Responsible Capitalism
team understanding these issues and engaging on them.
Liontrust’s investment teams also undertook proxy voting
(Liontrust votes its proxies and reports on its proxy voting on
its website).
As active fund managers, many of Liontrust’s investment teams
meet and engage with current and prospective investee
companies. In 2022, Liontrust’s investment teams (and/or the
Responsible Capitalism on their behalf) met companies face
to face or virtually and/or corresponded via emails, calls,
or letters. Depending on the issues, the investment teams’
interactions with companies might be with Board members,
senior management, investor relations or experts within
organisations. In 2022, Liontrust’s investment teams undertook
a total of 363 engagements with companies. There were often
multiple engagements with the same company over the course
17
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023STRATEGIC REPORT of the year. Company engagements were regularly attended
by representatives of several investment teams. Engagements
in 2022 covered a range of topics, including financial
performance, strategy, and ESG-related issues. In total, 251
different ESG issues were raised with holdings.
In May 2022, Liontrust joined the Net Zero Asset Managers’
(NZAM) initiative to adopt formally this goal. This includes
setting out the initial percentage of AuMA that the Group
commits to the goal. This percentage will increase over time.
Liontrust aims for its funds to be net zero aligned by 2050.
Liontrust has interim targets in place for 2025 and 2030
to achieve this part of its goal. By 2025, Liontrust aims to
reduce its financed emissions by 25% (as compared to the
relevant funds’ benchmarks from the end of December 2019).
By 2030, Liontrust aims to achieve a 50% reduction in its
financed emissions (as compared to the same benchmark used
for the 2025 reduction target).
As data become more reliable and available, Liontrust’s
investment teams will have a clearer understanding of how
to account for carbon emissions across all asset classes, and
the investment teams should see more clearly the impact of net
zero efforts on their funds’ investments. The speed at which
Liontrust’s funds move towards net zero will vary between the
teams, depending on each investment process. Following
Liontrust’s first submission to NZAM, we will report annually
on its progress against targets, either through CDP’s annual
assessment or via the PRI’s annual reporting tool.
2 DELIVER MARKET LEADING INVESTMENT
PERFORMANCE OVER THE LONGER TERM
Liontrust focuses only on managing funds and portfolios
in which we have particular expertise. All teams operate a
rigorous and repeatable investment process. We believe these
processes are key to delivering strong long-term performance
and effective risk control. Our funds strive to outperform their
relevant benchmarks and the average returns of their respective
peer groups over the medium to long term.
Outcomes: Over five years to 31 March 2023, 84% of
Liontrust’s UK-domiciled funds were in the 1st or 2nd quartile
of their respective IA sectors (source: Financial Express, as at
31.03.22, total return, net of fees, income reinvested, on an
AuMA weighted basis. This excludes the Liontrust Multi-Asset
Funds, most of which do not have sector benchmarks, and
funds in the IA Specialist sector). Over three years, 23% of
UK-domiciled funds in the 1st or 2nd quartile of their respective
IA sectors.
At Incisive Media’s 2022 Fund Manager of the Year Awards,
Liontrust won the Award for Global Group of the Year for the
second year running. The European Dynamic Fund won the
Award for Best Europe Fund, UK Micro Cap Fund was Highly
Commended in the UK Smaller Companies category, and the
GF High Yield Bond Fund was Highly Commended in the £
High Yield Bond category.
Liontrust won the award for Best UK Manager of the Year at
Financial News’ Excellence in Institutional Fund Management
Awards 2022.
UK Micro Cap won the UK Smaller Companies Fund Manager
of the Year Award at the Small Cap Awards, Liontrust won
the Best Investment Trust Group Award at the Online Money
Awards, and Liontrust was voted the Best Active Investment
Solution Provider and the Best ESG Investment Solution Provider
at the Professional Paraplanner Awards.
The Economic Advantage UK Smaller Companies Fund won
the award for the best UK Smaller Companies – Active fund at
the 2022 AJ Bell Fund and Investment Trust Awards.
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LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
STRATEGIC REPORT 3 DIVERSIFY THE FUND RANGE
We add to our product range when we possess the
fund management expertise and there is investor
demand. The demand for product varies between markets
and an expanded fund range helps to meet the different client
requirements. Diversification of investment styles and product
type, therefore, will appeal to a wider client base and enable
Liontrust to have funds that perform well in different parts of the
market cycle. We believe this will enable Liontrust to provide
more sustainable growth in the future even when certain styles
of investments are out of favour with investors.
Outcomes: On 1 April 2022, Liontrust completed the acquisition
of Majedie Asset Management. The acquisition has broadened
our investment capability, including in alternative investments
through the GF Tortoise Fund and global equity funds. In February
2023, we announced the consolidation of our global investment
teams to provide greater focus. This led to the Global Equity team
and funds becoming part of the Global Fundamental team, with
the former reporting to Tom Record, who is responsible for global
equities within the enlarged Global Fundamental team.
Liontrust was honoured to take on the management of the prestigious
£1.1 billion Edinburgh Investment Trust through the Majedie
acquisition. The end of March 2023 marked the three-year
anniversary of James de Uphaugh becoming Portfolio Manager
of the Trust, during which time its NAV delivered a cumulative
total return of 65.9% against 47.4% by the FTSE All-Share index
(Source: Morningstar). The discount of the Trust has narrowed from
11.5% at 31 March 2020 to 7.5% at 31 March 2023.
On 4 May 2023, we announced that Liontrust had
conditionally agreed to acquire the entire issued share capital
of GAM Holding AG. The proposed acquisition will broaden
Liontrust’s fund range and asset classes, including in fixed
income, thematic equities and alternatives.
The expanded range will offer the potential to grow AuMA
through marketing new funds to existing clients, attracting new
clients and exploiting new distribution channels in markets
where the two asset managers have strength of distribution. It
will also provide the opportunity to grow distribution in markets
where there is currently little or a developing presence.
The expanded number of asset classes and styles of investment,
which have little overlap with Liontrust’s existing strategies, will
also enable us to reduce the correlation of returns across the
range and therefore increase the number of funds that will be
attractive to clients during different periods of the market cycle.
4 EXPAND DISTRIBUTION AND THE CLIENT BASE
We seek to distribute our funds and portfolios to as
broad a client base in the UK and internationally as
possible, striving continually to raise awareness and knowledge
of Liontrust and our funds, widen the number of clients who
invest with us, deepen our relationships with existing investors
and increase our assets under management.
Outcomes: It has been a challenging year for Liontrust in terms
of net outflows and mixed performance for our funds. But this
has to be set against a backdrop of the industry in aggregate
suffering UK retail net outflows in 10 out of the 12 months last
year, according to the Investment Association (IA).
Liontrust had net outflows of £4.8 billion for the financial year
ended 31 March 2023. This included £608 million related to
the termination of a life company advisory agreement for the
Multi Asset team and £149 million related to the termination of
the agreement with Majedie Investments Plc (as at 31 January
2023) for the Global Fundamental team.
Gross sales have remained relatively strong. Over the 2022
calendar year and in the fourth quarter of 2022, Liontrust had
the seventh largest gross retail sales in the UK, according to
the Pridham Report.
We have been expanding our distribution internationally, including
through our Cashflow Solution and Global Fundamental teams,
that will help us to continue to diversify our client base. We have
exclusive distribution deals in Europe with ABN AMRO (mainland
Europe excluding Scandinavia) and SEB (Scandinavia) for the SF
Pan-European strategy (ABN AMRO and SEB) and SF Global
Impact strategy (ABN AMRO). We also have a distribution
partner in South America and a specialist distribution company in
the Middle East for the Cashflow Solution funds.
In early February 2023, we started a months-long roadshow
for our Multi-Asset team that will be attended by around 700
financial advisers at 50 venues across the UK.
The proposed acquisition of GAM Holding AG that was
announced on 4 May 2023 will enhance distribution globally
and provide the opportunity to increase sales and market share.
GAM’s largest markets are Switzerland, Germany, Iberia, Italy
and the US, compared with the UK for Liontrust. The proposed
acquisition presents the opportunity to access and develop
nascent markets such as the Americas and Asia-Pacific, where
GAM has a presence. GAM also has a significant presence in
the institutional market, both within the UK and internationally.
Therefore, the two groups have limited overlap in distribution
by source of AuMA.
19
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023STRATEGIC REPORT 5 ENHANCE THE INVESTOR EXPERIENCE
We aim to provide our investors with exceptional
service, support and communications, striving to be
as transparent as possible. This will include in-person meetings
and events; digital events and communications; investment
views, fund updates, thought leadership and educational
content; personalised digital communications; and bespoke
customer journeys and information. We communicate clearly
and frequently with our investors, regularly updating them
on the performance of each of our funds and portfolios, the
effectiveness of the investment processes applied to each of
our funds and portfolios and the progress of the business as a
whole. We also provide regular educational content to help
investors with their understanding, which is a key part of the
UK’s Consumer Duty. Liontrust is investing in developing online
services and digital communications.
Outcomes: Despite the general negative investor sentiment,
Liontrust has been able to maintain strong communications and
engagement with our clients. This is reflected in the fact that
Liontrust has the 6th strongest brand in the UK according to the
latest Broadridge research.
It is also reflected in the fact that more than 900 professional
investors registered for Liontrust’s virtual Sustainable investment
conference on 9 November 2022, which is over 20% higher
than two years ago, and Liontrust fund manager videos
distributed between 1 April 2022 and 28 February 2023
had 511,301 views.
The new Liontrust website went live at the end of March
2022. It has clearer and more efficient customer journeys;
six different user types; improved functionality; and a greater
range of content. Between 1 January and 22 May 2023,
visitors increased by 2%, page views rose 19%, bounce rates
were down 93%, there was an average 5,000 content views
per month and there was a 25% in interactions with the email
preference centre.
Liontrust’s LinkedIn followers have grown, reaching 9,607on
22 May 2023, an increase of 33% over the past year. From 1
January to 22 May 2023, there were almost 2,500 reactions
on LinkedIn.
As part of our ongoing work to ensure Liontrust is providing
value to investors, a survey was conducted to find out their
views on whether Liontrust is delivering value. This survey
is carried out to identify any areas where Liontrust could
improve its service and ensure we are regularly engaging with
investors. Of the direct retail investors in Liontrust funds, 74.5%
were satisfied with the service they have received in terms of
information, materials, communication and client servicing. Of
those who had contacted client services, 83% were satisfied
with the service they received.
20
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
STRATEGIC REPORT 6 ATTRACT AND DEVELOP TALENT
We will continue to recruit fund managers who have
excellent track records, expertise in their respective
asset classes and who use rigorous and repeatable investment
processes. We will make acquisitions that enhance and
grow our business. The quality and performance of our fund
management teams is one of our key potential competitive
advantages. We have created an environment in which
fund managers can focus on managing money and not get
distracted by other day-to-day aspects of running a business,
particularly administration.
Liontrust is proud of the people who work at the company
and we are investing in their training, qualifications and
development as part of our strategy to retain talented fund
managers, partners and employees. We are seeking greater
diversity across the company as we believe this enhances
the performance of businesses and leads to better decision
making, innovation and growth through independent thinking
and new ideas.
In seeking to nurture a working environment and culture that
attracts and retains talent, Liontrust:
• is committed to building a work place that fosters diversity,
inclusion and equity for its employees
• wants to hire the talent that best fits its recruitment needs
• is committed to a working environment that is nurturing
yet challenging; encourages a healthy work-life balance;
provides opportunities for staff to develop their careers and
progress; places value on mental health; and focuses on
servicing clients and investors
Outcomes: Liontrust completed the acquisition of Majedie
Asset Management on 1 April 2022. Over the financial year,
the investment team who were rebranded as the Liontrust
Global Fundamental team generated performance fees of
£12 million, out of a total of £18.5 million for Liontrust as
a whole. The acquisition of Majedie has broadened our
investment capability, including in alternative investments
and global equity funds. In February 2023, we announced
the consolidation of our global investment teams to provide
greater focus. This led to the Global Equity team and funds
becoming part of the Global Fundamental team.
We make acquisitions such as Majedie and GAM to enhance
and grow our business through adding investment teams that
complement our own and therefore diversify our product range
and investment styles. GAM, which on 4 May 2023 Liontrust
announced it had agreed to acquire, has investment teams
with excellent track records, expertise in their respective asset
classes and who use rigorous and repeatable investment
processes. GAM will also bring talent in distribution and across
the rest of the business, which will enhance the performance
and potential growth of the enlarged group.
Liontrust has created an environment in which fund managers
can focus on investment and their distinctive investment
processes and not get distracted by other day-to-day aspects
of running a business, particularly administration; in taking
this approach, there is cultural alignment between Liontrust
and GAM. It is our belief that this environment, coupled with
stability in the corporate parent, will create the conditions the
experienced fund managers and other employees at GAM
seek, encouraging them to commit their future to the enlarged
group. This stability will facilitate the recruitment of additional
talent, both investment and non-investment, during and after
the integration.
Achieving diversity and inclusion (D&L) is an ongoing objective
and one that the financial sector has had to continually work
to achieve, especially in terms of recruiting women and
individuals from under-represented ethnic and/or educational
21
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023STRATEGIC REPORT backgrounds. Obviously, it takes time for D&I related efforts to
feed through, from recruitment to training to progression. While
there is still progress to be made, Liontrust is more cognisant of
the areas for improvement and is working to make progress in
these over time. Importantly, Liontrust’s executive remuneration
is linked to D&I, with a 30% allocation to ESG as part of
the remuneration scorecard for 2022/23. Within this 30%
allocation, 10% focuses on having a joined up approach to
increasing the diversity and inclusiveness of Liontrust.
For the past three years, Liontrust has undertaken an annual
workforce engagement survey every year. In 2022, the survey
had an 82% response rate, which was higher than the 79%
response rate in 2021. This response rate is above the industry
average of those that run surveys, which is around 65%. The
survey was benchmarked against pillars of engagement
themes with Liontrust’s score indicated after each in brackets:
Following Liontrust’s 2021 survey, the Group was encouraged
to make several changes to improve the amount of flexibility
that employees have, help improve employee mental health,
and boost employee engagement. To fulfil these needs, the
Group:
• Extended hybrid working (three days in the office and two
days working from home)
• Launched a monthly wellbeing allowance for each employee
• Introduced a mental wellness intranet site
• Sponsored and enhanced communications around activities
for Pride and Black History Month
• Requested input from employees on facilities improvements
• Enhance internal communications
• Engaging managers (87%)
• Compelling leadership (73%)
• Realising potential (82%)
• Organisational integrity (83%)
• Employee voice (75%)
• Health and Wellbeing (89%)
• Overall, the survey score for Liontrust for 2022 was 84%
(2021: 83%; 2020: 95%).
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LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
STRATEGIC REPORT 7 DEVELOP THE BUSINESS INFRASTRUCTURE TO
HELP DRIVE GROWTH
We aspire for excellence in administration, risk
management and corporate governance to ensure we can
deliver a first-class service. We have moved our funds to
one administrator to secure a solid foundation from which
to support our future expansion and to ensure we and our
investors benefit from efficiencies. The support provided to our
clients, fund managers and the sales and marketing teams by
Operations is another key potential competitive advantage.
Having a single Operations function and fund administrator
ensures the fund management, sales and marketing divisions
have the appropriate tools to be effective, provides executive
management with the performance and risk monitoring
information required to manage the business and supports
the requirements of external stakeholders such as clients,
shareholders and regulators.
Outcomes: Liontrust has integrated Majedie into our single
operating model. This enables Liontrust to benefit from
economies of scale and therefore cost savings. A number of
fund mergers have been implemented where Liontrust believes
it is in the best interests of investors to provide more focused
range of funds. Liontrust believes in managing funds only
where we believe we have expertise.
Liontrust has changed the way in which we show the costs that
are paid by the funds to make this clearer for our investors.
Previously, to meet different rules and requirements, Liontrust
had shown two different costs for our funds. One of the
costs was displayed on factsheets, Key Investor Information
Documents (KIIDs) and the Liontrust website. The other was
included in regulatory reports and also provided to other
companies such as Morningstar and FE fundinfo which share
that information with their users who include financial advisers
and retail investors. The methods used to calculate these costs
differ slightly in the way in which they treat certain costs,
namely ‘synthetic costs’, which are the specific costs for funds
that invest in other funds. This meant that the costs provided to
other companies can appear higher than the costs displayed
on the factsheets, KIIDs and Liontrust website. Liontrust has
adopted one number that includes all costs linked to running
the funds (excluding transaction costs), which means we now
only show the higher cost figure that, where relevant, includes
the extra ‘synthetic cost’.
23
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023STRATEGIC REPORT OUR BUSINESS MODEL
Liontrust is a specialist fund management company that was
established in 1995 and was listed on the London Stock
Exchange in 1999. Liontrust invests on behalf of our clients
– institutional investors, professional intermediaries and
private investors – who are primarily, but not exclusively,
based in the UK and Europe. These investments are managed
through funds, portfolios and segregated accounts. As
at 31 March 2023, Liontrust managed £31.4 billion in
assets under management and advice (AuMA) across seven
investment teams.
These assets are invested with the objective of delivering
strong long-term performance to help our clients to achieve
their investment goals. This is complemented by Liontrust
developing long-term relationships with our clients.
innovative
Liontrust also has an important role to play in supporting
businesses and
working to allocate capital towards positive
outcomes that benefit the economy and
society. Liontrust takes great pride in our
role as active and responsible investors.
companies,
What makes Liontrust distinctive?
EXPERTISE
We focus only on those
areas of investment in
which we have particular
expertise.
INVESTMENT FOCUSED
Our fund managers can
concentrate on managing
their funds and portfolios
without being distracted
by other day-to-day
aspects of running an asset
management business.
PROCESS DRIVEN
Each fund management
team applies rigorous and
documented investment
processes to managing
funds and portfolios to
ensure the way they manage
money is predictable and
repeatable and to prevent
them from investing in
stocks and portfolios for
the wrong reasons.
CULTURE
Liontrust seeks to foster an
environment in which all
employees are engaged in
the business, help us achieve
our purpose and strategic
objectives, and behave
in line with our values. All
employees are focused on
delivering good outcomes
to our clients. We promote
diversity and inclusion
across the business.
ACTIVE MANAGEMENT
Our fund managers have
the courage of their
convictions in making
investment decisions,
ensuring our funds and
portfolios are truly actively
managed for the long-term
benefit of our clients and
investors.
STRONG AND
DISTINCTIVE BRAND
Our brand is accessible and
engaging, and represents
our strength, conviction,
independence, innovation,
excellence, transparency
and ethics.
COMMUNITY
ENGAGEMENT
We focus on financial
education, providing
opportunities for young
people and wildlife
conservation.
24
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
STRATEGIC REPORT 25
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023STRATEGIC REPORT HOW WE GENERATE SHAREHOLDER VALUE
Sustainable earnings growth
We look to grow our earnings by increasing our AuMA through sales, investment
performance, new products and acquisitions while maintaining pricing. Increased
AuMA delivers greater revenues which in turn support the equity value of your Company.
Consistency of earnings
Attracting and retaining clients maintains AuMA and fees. Liontrust seeks to
achieve this through delivering the right products for our investors, strong long-term
investment performance, excellent service, communications and administration,
and memorable experiences.
Business discipline
Managing the business efficiently controls costs and therefore increases profitability
with scale. This is achieved through strong infrastructure, operations, risk management
and governance.
26
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
STRATEGIC REPORT HOW WE ACHIEVE THIS
Investment Management
The quality and performance of the investment management
teams is one of Liontrust’s key competitive advantages and
core to helping investors to achieve their financial goals.
We have a single division of seven fund management teams that
manage a range of funds, portfolios and segregated accounts
using distinct investment processes supported by a centralised
trading team. There is no house view at Liontrust, and each of
the teams manages funds according to their own investment
process and market views without being distracted by other day-
to-day aspects of running an asset management company.
Liontrust believes robust and transparent investment processes
are critical to delivering long-term performance and effective
risk control. The teams subscribe to the belief that robust active
management can deliver enhanced risk adjusted returns in the
long term.
Staying true to their documented investment processes helps to
create an in-built risk control for our fund managers, especially
in more challenging environments, by preventing them from
investing in companies and funds for the wrong reasons.
Documenting an investment process means an investor in our
funds and portfolios knows exactly how each team manages
their investments.
Liontrust ensures that appropriate and prudent levels of risk are
taken to meet the investment objectives and policies of all our
funds.
Distribution
The strength of the Liontrust brand, the breadth and depth of
our client base and the relationships we have with our investors
are competitive advantages.
to institutional investors, discretionary fund managers, wealth
managers, financial advisers and private investors. Outside
the UK, we are focused on the wholesale market, primarily
family offices, private banks, wealth managers and multi-
managers in a number of countries. Liontrust has developed
strong relationships across the different distribution channels.
We have developed a strong brand through our marketing
activities, including events, regular communications, advertising,
sponsorships, PR and both print and digital communications.
Digital is a key, and ever-more important, driver of our brand
profile and engagement, including through our website, social
media, email communications and digital advertising and
promotions. Liontrust has the 6th strongest brand in the UK and
an improving brand across Europe, according to the annual
study by Broadridge.
Operations
The support provided to our clients, fund managers and
the sales and marketing teams by operations is another
key competitive advantage. We have a single Operations
division, designed to support a fast-growing business, and
have one fund administrator – Bank of New York Mellon.
Having a single Operations function and fund administrator
ensures the fund management and sales and marketing
divisions have the appropriate tools to be effective, provides
executive management with the performance and risk
monitoring information required to manage the business and
supports the requirements of external stakeholders such as
clients, shareholders and regulators.
Risk Management
Liontrust takes a cautious and pro-active approach to risk
management, recognising the importance of understanding
risks to the business, setting and monitoring risk appetite and
implementing the systems and controls required to mitigate them.
Our sales and marketing teams promote our funds and
portfolios in the UK and internationally. In the UK, we market
For more on risk management, see the section on Principal Risks.
Liontrust remains the market leader for sustainable investments in the opinion of
professional advisers and retail investors in the UK
More than 30% of professional advisers named Liontrust as the best for sustainable
investing while 27% of retail investors said Liontrust is top spot
(Source: Research in Finance)
27
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023STRATEGIC REPORT Liontrust ensures that appropriate and prudent levels of risk are
taken to meet the investment objectives and policies of all our
funds. In general, risk within a fund is controlled and monitored
in two ways: the investment process and predetermined risk
controls monitored by the Portfolio Risk Committee that is
Chaired by the CRO.
Governance
Liontrust takes its corporate governance responsibilities very
seriously. The first of the seven pillars of Liontrust’s strategy is
to be a responsible company and investor, which involves
upholding the highest standards of integrity in all of our actions
and striving for excellence in everything we do.
Liontrust has committed to integrating sustainability appropriately
throughout the business. This includes publishing our Responsible
Investment policy, which provides details of our engagement-
led approach and how we manage our stewardship at both
the company level and for individual investment teams, and
our Responsible Capitalism 2023 report, which outlines the
successes, where we need to do more and our priorities for the
year ahead.
We are seeking greater diversity across the company as we
believe this enhances the performance of businesses and leads
to better decision making, innovation and growth through
independent thinking and new ideas.
The Board of Directors is responsible for organising and
directing the affairs of the Company in the best interests of the
shareholders, meeting legal and regulatory requirements and
ensuring good corporate governance practices.
This is supported by Liontrust’s values
EXCELLENCE
We strive for excellence in our
products, service and people so
we can have a positive impact on
clients, stakeholders and society. We
pride ourselves on the quality of our
investment teams and their processes
and the knowledge and ability of our
employees across the business. We
seek to provide first-class service to our
clients and are transparent about the
management of our funds, portfolios
and
the business, communicating
clearly and frequently.
COURAGE
We do not follow the herd and have
the courage to have independence of
thought. Our fund managers have the
courage of their convictions through
their differentiated and
rigorous
investment processes. The business
has the courage to do the right thing,
make decisive decisions and to be
innovative and nimble.
RESPONSIBILITY
All employees have a responsibility
to act in the best interests of our
clients. We seek to uphold the highest
standards of integrity at all times.
Everyone at Liontrust is empowered to
fulfil their potential and are personally
accountable for their commitments and
actions, delivering on their promises.
We are responsible for supporting
each other, collaborating and treating
each other with dignity and respect.
28
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
STRATEGIC REPORT HOW THIS BENEFITS OUR STAKEHOLDERS
OUR CLIENTS
Investment excellence,
rigorous processes, wide
choice of funds, strong
service and communications,
robust operations and risk
management
OUR COMMUNITY
Sustainability being
integrated throughout the
business, promoting financial
education and numeracy
among school pupils, and
wildlife conservation
OUR
SHAREHOLDERS
Growing, sustainable and
profitable business, and
successful acquisitions
OUR
COLLEAGUES
Empowerment and
responsibility, and innovative
working environment
29
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023STRATEGIC REPORT FINANCIAL REVIEW
Financial performance
Profit before tax decreased to £49.301 million (2022:
£79.291 million). The profit before tax for the year includes
£10.2 million of acquisition and reorganisation costs incurred
as a result of the acquisition and reorganisation of the Architas
UK Multi-Asset business and Majedie acquisition costs. In
addition, the impairment losses of £8.8m and £4.0m on
Architas and Majedie respectively have been recognised in
the period. The amortisation charge has further increased
compared to prior year in the year due to the completion of
the Majedie acquisition on 1 April 2022.
Adjusted profit before tax*, which adjusts for amortisation,
impairments and other costs relating to acquisitions and
reorganisation decreased to £87.083 million from £96.556
million last year, reflecting the decreased fund flows and fall
in AuMA. Nonetheless, adjusted profit before tax is ahead
of market expectations, driven primarily by stronger than
expected performance fee revenues during the Financial
Year of £18.5 million (2022: £12.6 million) received
across three of our investment teams (Global Fundamental
team, Cashflow team and Sustainable Investment team), the
Global Fundamental team, who joined as part of the Majedie
acquisition, contributing £11.9 million.
Table (a) Analysis of financial performance
Year ended
31 Mar 23
£’000
Year ended
31 Mar 22
£’000
Year on
year
change
Revenue
Revenue excluding performance fees fell by 3% compared to
2022 but remains 39% higher than 2021.
Figure 1 – Revenue £’000
250,000
200,000
150,000
100,000
50,000
0
FY21
FY22
FY23
Performance fee revenues (£’000)
Non-performance fee revenues (£’000)
Average AuMA
Average AuMA decreased by 2% to £33,815 million
compared to last year but was 45% higher than 2021
reflecting acquisitions, net flows and investment performance.
Figure 2 – Average AuMA £’billion
Revenue excluding
performance fees
224,855
232,976
Performance fees
18,484
12,595
Cost of sales
Gross Profit
Other gains
(13,569)
(14,252)
229,770
231,319
2,467
26
Administration expenses
(183,210)
(151,916)
Operating profit
49,027
79,429
Net interest
275
(138)
-3%
47%
-5%
-1%
–
21%
-38%
Profit before tax
49,302
79,291
-38%
Adjustments – see note 7
on page 160
37,781
17,265
Adjusted profit before tax
87,083
96,556
-10%
£40
£35
£30
£25
£20
£15
£10
£5
£0
47%
Increase in performance fees
received across three of our
investment teams (Global
Fundamental team, Cashflow
team and Sustainable
Investment team).
FY21
FY22
FY23
30
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
STRATEGIC REPORT Revenue Margin*
Revenue margin increased by 2% from 31 March 2022 to
31 March 2023 compared to decrease by 1% two years
ago. Revenue margin is calculated by taking the Revenues
excluding performance fees, less cost of sales and dividing by
the average AuMA.
Figure 3 – Revenue Margin*
7%
6%
5%
FY21
FY22
FY23
Adjusted profit before tax* and operating margin*
Adjusted profit before tax* fell from £96.556 million to £87.083
million but remains significantly higher than the £58.987 million
reported two years ago. This in turn is reflected in the Adjusted
basic and Diluted earnings per share.
Figure 4 – Adjusted profit before tax* £’million
120
100
80
60
40
20
0
FY21
FY22
FY23
Adjusted operating margin (calculated as Adjusted operating
profit divided by Gross profit) reflects the operating gearing
inherent in the business (see Figure 5 below).
Figure 5 – Adjusted operating margin*
42%
40%
38%
36%
34%
32%
30%
FY21
FY22
FY23
£87m*
Adjusted operating profit
*These are Alternative Performance Measures. See Page 34 for further details.
31
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023STRATEGIC REPORT Administration expenses
The largest component of our costs, in common with other
service companies,
related
expenses. Staff compensation as a percentage of Gross profit
was maintained, even though headcount increased reflecting
stringent cost control. See Figure 6 below.
is member and employee
Figure 6 – Employee and member related expenses as a
percentage of Gross profit*
50%
45%
40%
35%
30%
FY21
FY22
FY23
Member and employee related costs are the sum of Director
and employee costs, pensions, members’ drawings charged
as an expense, and members’ advance drawings (where
applicable).
Dividend
The Board has considered current market environment, the
financial performance for the Group in the current year and
its cash generation abilities in future years, and is declaring
a second interim dividend of 50.0 pence per share (2022:
50.0 pence) which will result in total dividends for the
financial year ending 31 March 2023 of 72.0 pence per
share (2022: 72.0 pence) (See Figure 7 below). This reflects
a dividend margin (dividend per share divided by Adjusted
diluted earnings per share excluding performance fees) of
71% (See Figures 7 and 8 below).
Figure 7 – Dividend per share (pence)
80
70
60
50
40
30
20
10
0
FY21
FY22
FY23
Dividend margin is calculated by taking the dividend amount
divided by adjusted diluted EPS excluding performance fees.
Figure 8 – Dividend margin*
74%
72%
70%
68%
66%
64%
62%
60%
58%
56%
54%
52%
FY21
FY22
FY23
*These are Alternative Performance Measures. See Page 34 for details.
32
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
STRATEGIC REPORT Dividend policy
Our policy is to grow our dividend progressively in line with
our view of the underlying adjusted earnings per share on a
diluted basis and cash flow of Liontrust.
assessment has been made with reference to the Group’s
current position and strategy, the Group’s risk appetite, the
Group’s financial forecasts, and the Group’s principal risks
and mitigations, as detailed in the Strategic Report.
When setting the dividend, the Board looks at a range of
factors, including:
• the macro environment;
• the current balance sheet; and
• future plans.
The three-year period is consistent with the Group’s current
strategic forecast and the internal capital and risk assessment
(ICARA). The forecast incorporates both the Group’s strategy
and principal risks. The forecast is approved by the Board at
least annually. This formal approval is underpinned by regular
Board discussions of strategy and risks, in the normal course of
business. The forecast is updated as appropriate.
It is our intention that dividends will be declared and paid half
yearly.
Statement of viability
In accordance with provision 31 of the 2018 revision of the
Code, the Directors have assessed the prospects of the Group
over a longer period than the 12 months required by the
Going Concern provision.
The Directors confirm that they have a reasonable expectation
that the Group will continue to operate and meet its liabilities,
as they fall due, up to 31 March 2026. The Directors’
The three-year strategic forecast considers the Group’s
profitability, cash flows, dividend payments, share purchases,
seed capital and other key variables. These metrics are subject
to sensitivity analysis, which involves downside scenarios,
flexing a number of the main assumptions in the forecast, both
individually and in unison. Given the market volatility and
economic uncertainty due to the ongoing geopolitical tensions,
management produced additional sensitivity scenario analysis
for the strategic forecast and has considered mitigating actions
should any of these scenarios occur. Scenario analysis is also
performed as part of the Group’s ICARA, which is approved
by the Board.
33
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023STRATEGIC REPORT ALTERNATIVE PERFORMANCE MEASURES (‘APMs’)
The Group uses the following APMs:
ADJUSTED PROFIT BEFORE TAX*
Definition: Profit before taxation, amortisation, impairment and
non-recurring items (which include: professional fees relating to
acquisitions; restructuring and severance compensation related
costs).
Reconciliation: Note 7.
Reason for use: This is used to present a measure of profitability
of the Group which is aligned to the requirements of
shareholders, potential shareholders and financial analysts, and
which removes the effects of non-cash and non-recurring items,
which eases the comparison with the Group’s competitors who
may use different accounting policies and financing methods.
Specifically, calculation of Adjusted profit before tax excludes
amortisation expenses, and costs associated with acquisitions
and their integration into the Group. It provides shareholders,
potential shareholders and financial analysts a consistent year
on year basis of comparison of a “profit before tax number”,
when comparing the current year to the previous year and also
when comparing multiple historical years to the current year, of
how the underlying ongoing business is performing.
ADJUSTED OPERATING PROFIT
Definition: Operating profit before interest, amortisation
and impairment, and non-recurring items (which include:
professional fees relating to acquisitions; restructuring and
severance compensation related costs).
Reconciliation: Note 7.
Reason for use: This is used to present a measure of
profitability of the Group which is aligned to the requirements
of shareholders, potential shareholders and financial analysts,
and which removes the effects of financing and capital
investment, which eases the comparison with the Group’s
competitors who may use different accounting policies and
financing methods.
Specifically, calculation of Adjusted operating profit before
tax excludes amortisation expenses, and costs associated with
acquisitions and their integration into the Group. It provides
shareholders, potential shareholders and financial analysts a
consistent year on year basis of comparison of a “operating
profit”, when comparing the current year to the previous year
and also when comparing multiple historical years to the current
year, of how the underlying business is performing.
ADJUSTED OPERATING MARGIN
Definition: Adjusted operating profit divided by Gross profit.
Reconciliation: Note 7.
Reason for use: This is used to present a consistent year on
year measure of adjusted operating profit compared to gross
profits, identifying the operating gearing within the business.
REVENUE EXCLUDING PERFORMANCE FEES
Definition: Revenue
performance related fees.
less any
revenue attributable
to
Reconciliation: Note 4.
Reason for use: This is used to present a consistent year on
year measure of gross profits within the business, removing the
element of revenue that may fluctuate significantly year-on-year.
ADJUSTED EARNINGS PER SHARE
Definition: Adjusted profit before tax divided by the weighted
average number of shares in issue.
Reconciliation: Note 7.
Reason for use: This is used to present a measure of profitability
per share in line with the adjusted profit as detailed above.
*This measure is used to assess the performance of the Executive Directors.
34
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
STRATEGIC REPORT ADJUSTED DILUTED EARNINGS PER SHARE
Definition: Adjusted profit before tax divided by the diluted
weighted average number of shares in issue.
Reconciliation: Note 7.
Reason for use: This is used to present a measure of profitability
per share in line with the adjusted profit as detailed above.
REVENUE MARGIN
Definition: Revenues excluding performance fees, less cost of
sales divided by the average AuMA.
Reason for use: This is used to present a measure of profitability
over average AuMA.
DIRECTOR, EMPLOYEE AND MEMBER RELATED EXPENSES
AS A PERCENTAGE OF GROSS PROFIT
Definition: A component of our costs, in common with other
service companies, is Director, member and employee related
expenses. Staff compensation as a percentage of Gross profit
was maintained reflecting stringent cost control.
DIVIDEND MARGIN
Definition: This is the dividends declared per share for the year
divided by the Adjusted diluted earnings per share excluding
performance fees.
Reconciliation: This can be recalculated with the information
in notes 7 and 9.
Reason for use: This is used to identify the dividend cover versus
adjusted diluted earnings per share excluding performance fees.
ASSETS UNDER MANAGEMENT AND ADVICE (‘AUMA’)
Definition: the total aggregate assets managed or advised by
the Group.
Reconciliation: A detailed breakdown of AuMA is shown in
the Strategic Report
Reason for use: AuMA is a key performance indicator for
management and is used both internally and externally to
determine the direction of growth of the business. When used
intra-month (i.e. AuMA for dates that are not a month end date)
or used at month end but early in the following month then
the AuMA for some accounts, funds or portfolios may not be
the most recent actual AuMA, rather it will be the most recent
available AuMA which may be the previous month end AuMA
or the most recently available AuMA.
AVERAGE ASSETS UNDER MANAGEMENT AND ADVICE
(“AVERAGE AUMA”)
Definition: The average of aggregate assets managed or
advised by the Group during the relevant period.
Reconciliation: Average AuMA for the year is the average of
each month end aggregate AuMA during the relevant period.
Reason for use: Average AuMA shows AuMA without the
volatility of short term net flows and allows for comparability
between years.
NET FLOWS
Definition: Total aggregate sales into Group funds less total
redemptions from Group funds accounts and portfolios. If
positive may also be referred to as “Net inflows” and where
negative as “Net outflows”.
Reconciliation: A detailed breakdown of net flows is shown in
the Strategic Report.
Reason for use: Net flows is a key performance indicator for
management and is used both internally and externally to
assess the organic growth of the business. For certain MPS
accounts, the net flow number is not available from the relevant
administrator, so the net flow number is derived from the
difference between the starting and ending AuMA adjusted
for investment performance, if there is a reliable source for the
investment performance. For certain Model Portfolio Service
accounts where there is no reliable investment performance
benchmark, the flows are not included.
35
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023STRATEGIC REPORT
DELIVERING THE ASSESSMENT OF VALUE AND
ENGAGEMENT WITH INVESTORS
Every fund with the exception of two has an overall fund score of
Green, which means we have assessed them as delivering value.
The Liontrust focus on robust and repeatable investment processes
and the excellence and breadth of our fund management
capability is reflected in the fact that of the 52 Liontrust funds
assessed, 39 have a Green score for performance.
The responsibility of asset managers as guardians of investors’
savings are particularly important during periods of such volatility
in investment markets and the current cost of living crisis. It is to
meet this responsibility that we stress the importance of having
expertise in all the areas of investment we offer and for each
of our fund management teams to have robust and rigorous
processes, which enable Liontrust to help investors to achieve their
long-term financial objectives and enjoy a better financial future.
The benefit of this approach is demonstrated by strong long-
term fund performance and the fact that research shows the
Liontrust Sustainable Investment and Economic Advantage
teams are regarded as leaders in their respective asset
classes among both professional intermediaries and retail
investors in the UK (Source: Research in Finance).
Meeting our responsibility to investors is about more than just
long-term performance, however. This is demonstrated by this
Assessment of Value Report, which has evaluated whether
the Liontrust funds are delivering value to investors against
seven criteria and then provided an overall summary for each
one. The criteria and overall assessment are judged through
a RAG (Red, Amber and Green) scoring system.
CONSUMER DUTY
We have always taken seriously our responsibility as
guardians of investors’ assets and never forget that we are
looking after other people’s savings. Therefore, we have
welcomed the FCA’s Consumer Duty in seeking to improve
the quality of products and services to retail investors and
believe these are in the interests of everyone delivering
financial services as well as of the ultimate consumers.
Since the final rules for Consumer Duty were issued by the
FCA in July 2022, Liontrust has been working on ensuring
we are delivering - and can evidence how we are doing
so - on the four good consumer outcomes that cover products
and services, price and value, consumer understanding, and
consumer support. We established a number of working
groups within Liontrust to cover each of the four outcomes of
the Consumer Duty as well as the cross-cutting rules (act in
good faith towards retail customers, avoid foreseeable harm
to retail customers, and enable and support retail customers
to pursue their financial objectives).
These working groups have
representatives
from different departments across the business, as well as
included
the Board of Liontrust Asset Management PLC and all the
senior management. Our Consumer Champion is Mandy
Donald, who is a Non-executive Director of Liontrust Asset
Management PLC, and we have appointed three internal
Vulnerable Customers Champions.
Liontrust has also been consulting and collaborating with
a number of external partners, clients, companies and
organisations, including the IA (Investment Association) and
The Investing and Savings Alliance (TISA).
Culture and Strategy
The FCA has emphasised the importance company culture
has on delivering good outcomes for the retail investor. We
are dedicated to ensuring that our purpose, leadership,
governance and people aligns with the Consumer Duty. All
employees have a responsibility to act in the best interests of
our clients.
How we plan to monitor outcomes
Our approach to identifying areas of harm considered the
four consumer outcomes at each stage in our documented
36
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
STRATEGIC REPORT consumer journey and product life cycle. This enables us to
assess what we want investors to experience at each stage
and how we can support them. We plan to use the Group
Risk Scorecard system to measure levels of harm and confirm
whether we have met consumer outcomes. Risk indicators
show when an action should be considered. The output of
this proactive and reactive monitoring approach will be
supplemented with additional reporting on Consumer Duty.
We are also in the process of establishing a new Committee
- the Consumer & Conduct Committee - that will replace
our existing Treating Customers Fairly (TCF) Committee.
The Committee will be structured around the four consumer
outcomes, cross-cutting rules, and culture, conduct and
competence.
Consumer Understanding and Consumer Support outcomes
• The educational content on the website is continually being
expanded. This is available for personal investors when they
visit the website and for distributors to use with their clients.
We are planning to broaden the use of infographics and
videos for education.
• The Liontrust website has separate customer journeys for
different users, including one for professional advisers
based in the UK and another for personal investors. We
have reviewed the wording across the personal investor
website and the accessibility to information. We are making
changes to some of the content, signposting and quicker
access to some information such as How to Invest and the
annual Assessment of Value Report; and other wording
including for ISAs and JISAs.
• We are also reviewing and expanding the literature that
we produce for distributors to share with their clients.
Liontrust has joined with other asset managers to establish a
consumer panel run by an independent research company.
The panel is testing communications, literature and other
content (written, video and podcast) with retail investors.
This is providing feedback on whether retail investors
understand the communications, literature and content; what
they find interesting and useful; and what else they want to
be given and informed about. This will help us to make our
communications as relevant and accessible as possible.
• We will be engaging directly with a number of distributors
going forward to ensure our communications and literature
promote understanding for their clients.
Vulnerability & Accessibility
• The work we have undertaken so far in relation to
characteristics of vulnerability focuses on the FCA’s four
key drivers – poor health, negative life event, low financial
resilience and low capability. We have reviewed available
information, processes and controls and considered
how scenarios may require different and/or additional
information and support, depending on the type of product
or service. We are actively looking at ways to improve
consumer outcomes for investors with characteristics of
vulnerability.
• We have appointed three internal Vulnerable Customers
Champions who have received specialist training.
• Training on the Duty is being provided to ensure all Liontrust
employees are aware of their responsibilities as part of their
specific roles and how they are able to contribute to good
customer outcomes. This will include specific consideration
of retail investors with characteristics of vulnerability.
• We have added tools to the website to aid accessibility
for users. This includes providing the ability to change font
sizes, colours and have an audio option for written content.
• We are working to enable the provision of consumer
communications in different accessible formats.
37
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023STRATEGIC REPORT SALES AND MARKETING REVIEW
It has been a year of negative investor sentiment, weighed down
by the ongoing macroeconomic and geopolitical concerns.
Liontrust has not been immune to the volatility in stock markets,
leading to net outflows of £4.8 billion in the 12 months to 31
March 2023. In aggregate, the asset management industry
suffered UK retail net outflows in 10 out of the 12 months in
2022, according to the Investment Association (IA).
Liontrust has shown that the business as a whole is operating
well and we will continue to broaden our products and
distribution channels while the adherence to process, focus
in distribution and strong brand ensure we will emerge well
positioned for future expansion. Despite the net outflows and
the market environment, gross sales have remained relatively
strong. Over the 2022 calendar year and
in the fourth quarter of 2022, Liontrust had
the seventh largest gross retail sales in the
UK, according to the Pridham Report.
The Liontrust brand will be a key driver of
the growth of the business. The brand has
risen in the rankings in the UK (to 6th) as
well as across the rest of Europe according
to Broadridge’s annual survey of asset
management brands, which was released
in March 2023.
leader
remains
the market
Liontrust
for
sustainable investments in the opinion of
professional advisers and retail investors in the UK (Source:
Research in Finance in December 2023). More than 30% of
professional advisers named Liontrust as the best for sustainable
investing while 27% of retail investors said Liontrust is top spot.
The research is supported by the fact that more than 900
professional advisers registered for the virtual Sustainable
Investment conference in November 2022.
Liontrust is also joint first for UK equities among professional
advisers and joint third among retail investors (Source:
Research in Finance in December 2023).
Our Multi-Asset range has been refocused and enhanced to
continue to ensure it offers vital consistency and meets the
suitability requirements of advisers and their clients. Over the
first few months of 2023, the team has been presenting to
around 700 advisers at 50 venues throughout the UK.
Liontrust has continued to expand distribution internationally,
particularly in Europe but also in South America and the
Middle East, partly through the growing interest in Global
Fundamental and Cashflow Solution funds.
The new Liontrust website launched in March 2022 and its
success and the benefit users have gained is demonstrated
by the feedback from and strong engagement of clients
and investors. This includes feedback through research with
professionals and retail investors on how easily they find the
information they want, with five scores ranging from extremely
easily to I didn’t find what I wanted.
93% of professionals say it is extremely easy or
fairly easy to find information while 96% of retail
investors say it is extremely or fairly easy to find.
Since launch, there has been a 47.68% increase
in session duration on the website. There has been
a 35% increase in engagement value through
personalisation. Over the last year, there has been
a 25% increase in Preference
Centre interactions (to sign up
to receive email insights from our
fund managers), a 10% increase
in factsheet downloads and a 6%
increase in fund enquiries.
#1
Liontrust remains the market
leader for sustainable
investments in the opinion
of professional advisers and
retail investors in the UK
Since the new Edinburgh Investment
Trust website went live on 9 March
2023, we have seen an improved
performance compared to the previous
page on Liontrust’s website. The new
website had an average of 3,500
unique visits to the new website every
month compared to 1,447 last year. We
have had an average of 4,848 sessions a month compared
to 2,202 last year.
The strength of Liontrust’s communications and engagement is
demonstrated by the fact that between 1 April 2022 and 28
February 2023, there were 511,301 views of our videos.
Since the final rules for Consumer Duty were issued
by the FCA in July 2022, Liontrust has been
working on ensuring we are delivering – and
can evidence how we are doing so – on
the four good consumer outcomes that
cover products and services, price and
value, consumer understanding, and
consumer support.
Among the measures taken have
been adding tools to the website to
aid accessibility for users, updating
our Target Market documentation
and the EMT to take account of
vulnerable consumers and any
potential financial harm they could
suffer, and continually expanding
educational content.
38
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
STRATEGIC REPORT
93%
93% of professionals say it is
extremely easy or fairly easy
to find information on the
Liontrust website
39
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023STRATEGIC REPORT LIONTRUST AND FUND AWARDS
We are proud to announce the following awards for Liontrust and our fund management teams in the financial year ended 31
March 2023:
AJ Bell Fund IT Awards 2022
Best UK Smaller Companies Fund – Active
Financial News FM Awards 2022
Best UK Manager
Online Money Awards 2022
Best Investment Trust Group
Investment Week Fund Manager
of the Year Awards 2022
Best Europe Fund
Investment Week Fund Manager
of the Year Awards 2022
Group of the year
Professional Adviser Awards 2022
Best ESG Solution for Advisers
Professional Paraplanner Awards 2022
Best Active Investment Solution Provider
Professional Paraplanner Awards 2022
Best ESG Investment Solution Provider
UK Small-Cap Awards 2022
UK Smaller Companies Fund of the Year
Professional Pensions Investment Awards 2022
Sustainable Corporate Bond Manager of theYear
At Incisive Media’s 2022 Fund Manager of the Year Awards, Liontrust won the Award
for Global Group of the Year for the second year running. The European Dynamic
Fund won the Award for Best Europe Fund, Liontrust won the award for Best UK
Manager of the Year at Financial News’ Excellence in Institutional Fund Management
Awards 2022.
40
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
STRATEGIC REPORT COMMUNITY ENGAGEMENT
There are currently three key objectives that we are aiming
to achieve through the Liontrust community engagement
programmes:
numeracy and finance, with the aim of improving children’s
understanding of money, as well as giving them the confidence
to thrive in school maths lessons.
• Raise financial awareness and literacy throughout society
• Provide opportunities for young people
• Wildlife conservation
Financial education
Raising financial awareness and literacy throughout society
is a key objective of the Liontrust community engagement
programme, and we have partnered with both the Newcastle
United Foundation (NUF) and 10ticks to achieve this.
Our partnership with the Newcastle United Foundation provides
a numeracy programme, Financial Football. This is designed to
give primary school children a head start in financial education.
Financial Football uses the popularity and profile of Newcastle
United football club to encourage primary school pupils to
engage with maths problems, using real-life scenarios such as
buying and selling football players and paying fines for red
cards to teach concepts such as budgeting.
The Financial Football programmes have been used by 17
schools in the north-east, involving 756 pupils. Financial
Football has led to significant improvements in solving money
focused questions. Pupils are presented with five questions pre
and post programmes and the results show there has been
a significant improvement in the percentage of students who
answered correctly:
The six-week programme has helped to break down any
barriers that children face in understanding and learning about
Year 5/6 from 55% to 76%
Year 4 from 32% to 73%
41
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023STRATEGIC REPORT
Liontrust has also supported the building
of Newcastle United
Foundation’s
community home called NUCASTLE,
which officially opened in March 2022.
One of the classrooms at NUCASTLE is
called Liontrust and is used to work with
all members of the local community.
Currently, Newcastle United Foundation
is helping around 65,000 people across
the northeast of England.
2,103
primary schools have signed
up to 10ticks.com, 10ticks.
co.uk or both via Liontrust,
meaning we reach 10% of
the 20,800 primary schools
we are targeting in the UK
Through 10ticks,
Liontrust delivers
worksheets and new digital maths
education to primary schools across the UK. 10ticks.com
Mental Maths is a fun and engaging online resource designed
to help support the instant recall of multiplication and division
facts and lots of other mental maths topics with little teacher
intervention. From challenging classmates online to playing
live games across the globe, these stimulating activities are
designed to engage pupils. The pupils can also create their
own avatar and earn certificates and awards to inspire them
to perfect their skills.
There are over 10,000 worksheets available to teachers
covering a huge variety of pedagogical styles including problem
solving, puzzles, games, investigations, consolidation,
Action Maths and Mastery. Over 8,000
teachers have signed up.
2,103 primary schools have signed up
to 10ticks.com, 10ticks.co.uk or both via
Liontrust, meaning we reach 10% of the
20,800 primary schools we are targeting
in the UK. There are approximately 4.5
million children in this sector so we are
reaching potentially 450,000 children.
We have over 20% (948 schools) of
secondary schools signed up to 10ticks.
com, 10ticks.co.uk or both out of the
targeted 4,171 schools. There are
approximately 3.5 million children in
this sector so the partnership is reaching potentially 700,000
children.
The average Liontrust pupil has logged into 10ticks.com
194 times, improved in speed by 49.4% and accuracy by
49.0%. To March 2023, 11.68 million questions have been
answered by Liontrust pupils.
Blackpool FC Girls’ Emerging Talent Centre
Liontrust has partnered with Blackpool Football Club
Community Trust to become a principal partner and the front
of shirt sponsor for the Girls’ Emerging Talent Centre (ETC)
for the 2023/24 season. The centre provides the chance
for female players to develop their football skills
and be offered a potential pathway all
the way to the Lionesses.
42
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
STRATEGIC REPORT Wildlife conservation
We are proud sponsors of the global conservation
charity ZSL and their efforts to protect the Asiatic lion
from extinction, a partnership that stretches back nearly
a decade. ZSL, through its science and conservation
efforts in the field and at ZSL London Zoo, is working
to ensure a future for Asiatic lions.
Liontrust has helped recently to bring together a newly
matched pair of the big cats at ZSL London Zoo’s
immersive Land of the Lions exhibit. It is hoped that the
pair will breed and boost the numbers of the critically
endangered species – of which just over 600 remain
in the wild.
The iconic big cats which once roamed across Asia – from Turkey
to eastern India – are now found only in the Gir Forest in Gujarat,
India. Thanks to conservation efforts, Asiatic lions were bought
back from the brink of extinction and their numbers have risen
slightly in the last decade, but their future is still precarious. Due to
their limited range and reliance on a single habitat, Asiatic lions
are particularly susceptible to disease outbreak or natural disaster.
Land of the Lions is home to a pair of Asiatic lions, male Bhanu
and female Arya. Matched as part of the international breeding
programme for endangered species, co-ordinated by EAZA’s
(European Association of Zoos and Aquaria) big cat specialists,
the hope is that the two will breed in future.
The lions form a back-up population of the critically endangered
species in an environment in which people are inspired to
protect animals and where conservationists can learn both from
and about animals. These learnings are shared with other zoos
across the world and with conservationists in the field, who use
this critical information to carry out their work in the wild.
This is part of our commitment to support social mobility
through providing opportunities to young people. The Centre
supports the development of young female players aged eight
to 16 and provides a wider and more diverse talent pool for
women’s football.
The Girls’ Emerging Talent Centre run by Blackpool FC
Community Trust is designed to be a central hub, working with
grassroots clubs, schools and local coaches to identify talented
female players and is part of the FA Pathway towards the
Lionesses. It is offered free to all, removing the financial burden
often faced with elite level training.
With Liontrust’s support, Blackpool FC Community Trust plans to
offer a comprehensive approach to player development, giving
all girls selected access to a high-quality training programme,
strength and conditioning coaches, access to an onsite
physiotherapist, nutritional advice and health and wellbeing
support. Groups will also be invited to play in competitive games
against other ETC programmes. Liontrust’s focused support and
investment via the ETC will improve accessibility and increase
inclusivity for local young female footballers.
43
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023STRATEGIC REPORT OPERATIONS REVIEW
We are focused on maintaining an operations team that is efficient, scalable and that gives us the ability to continue to support our
business model and strategic objectives for growth in future years; whilst also ensuing that they deliver value to all our stakeholders.
Our key operations teams (together, the “Operations Team”) are:
Operational Oversight team,
which is responsible for the
oversight of our custody, middle
office (transaction matching,
corporate action management,
derivatives management
and reconciliations), fund
accounting/valuation/pricing
service providers and our
transfer agency outsourced
providers.
Technology & Data team,
which focuses on the
continued evolution and
security of our high-quality,
cloud-based technology
infrastructure, provides IT
support, and supports the
business through the delivery
of data solutions.
Property & Facilities team,
which is responsible for
managing our offices in
London (2 Savoy Court,
10 Old Bailey), Edinburgh
(24/25 Charlotte Square)
and Luxembourg (18 Val
Sainte Croix).
Product team, which is
responsible for product
development, product strategy
and product governance
including the management
of our Assessment of Value
Report process.
The Operations Team have, in the last 12 months, achieved the following:
the
• Successfully completed
transition of
the Majedie
Asset Management business onto Liontrust’s operational
infrastructure, including the transfer of fund accounting to
BNYM, merger of the offshore management companies;
and transition of the operational management of Edinburgh
Investment trust.
• Completed the TUPE transfer of Majedie staff to Liontrust.
• Human Resources continued to work alongside the D&I
Committee in delivering its action plan to support more
inclusive and diverse working practices. Initiatives throughout
the year are described in detail on page 66
• Enhanced internal HR communications, including dedicated
HR intranet pages on Staff Engagement, Mental Health
and Employee Benefits and the introduction of monthly
Lunch & Learn webinars hosted by different internal Liontrust
departments
• Transfer of Liontrust share register to Equiniti in November
2022 completed and implementation of Equiniti Employee
Share Platform for staff incentive plans
• Rolled out laptops to all staff to support the efficiency of our
flexible working practices
• Expanded our offering to institutional clients through the wider
provision of our client-facing portal
• Continued to remain vigilant on Cyber threats and Disaster
Recovery projects, including conducting successful data
centre failover tests, having a physical cyber security sweep
of the London office HQ and implementing and testing a
Cyber Incident Response Plan
• Delivered a review of alternative office space for the business
utilising workplace consultants to support our modern
workplace strategy alongside improvements our office
sustainability both within our offices and in our supply chain
• Managed the transition to a single overall cost disclosure
for the funds, with the costs of all applicable underlying
vehicles, including closed ended vehicles, being
included in the Ongoing Charges Figure in line with
Investment Association guidance
• Managed the change of name of the European
Dynamic Fund (previously European Growth) and
transitioned the fund to single pricing (July 2022)
alongside the merger of the MA Strategic Bond Fund
into the Strategic Bond Fund (October 2022)
• Designed and implemented a programme of enhancements
to the Multi-Asset produce range including changes to names,
investment objectives and policy, benchmarks and asset
allocation changes across various products
• Managed the Assessment of Value process, culminating in the
publication of the third AoV report in December 2022 and
supported the wider business project to comply with the new
Consumer Duty obligations
• Implementation of systems enhancements including Control
Now for trade reporting, automation of onshore fund flow
reporting; and Sunsystems for accounting and financial
reporting
44
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
STRATEGIC REPORT 45
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023STRATEGIC REPORT PRINCIPAL RISKS AND MITIGATIONS
The Group takes a cautious and pro-active approach to risk
management, recognising the importance of understanding
risks to the business, setting and monitoring risk appetite and
implementing the systems and controls required to mitigate them.
Liontrust has defined a Risk Universe and uses a Risk Appetite
Statement as well as an Enterprise Risk Framework to capture
the core risks inherent in our business and assess how they are
managed and mitigated, the key indicators that would suggest
if the risk is likely to materialise together with an assessment that
each risk may have on our regulatory capital.
The Risk Department is a business function set up to manage
the risk management processes on day-to-day basis and is
responsible for the Group’s Risk Management Framework and
how it is integrated into the Group’s internal control system. It
is an essential part of the Group’s corporate governance and
management arrangements. It provides challenge, an objective
review and an assessment of the risks Liontrust faces in seeking
to achieve its objectives.
Liontrust’s Risk Charter defines the mission, scope of work,
organisation, accountability, authority and responsibilities of
the Risk Department. It governs how the Chief Risk Officer and
other staff of the department discharge their duties and conduct
risk management activities within the overall Risk Management
Framework of the Group.
Our Professional Indemnity Insurance covers us for losses, errors,
and fraud. Our current assessment of our key operational risks
and our risk management framework suggest that we are not at
material risk of breaching our insurance limits, although all our
risk appetite and prudential planning incorporates the scenario
of a failure of insurance cover.
Risk Culture Statement
Our risk culture aligns with Liontrust’s vision of enabling investors
to enjoy a better financial future. This statement is a guide for
employees and describes the key elements which make up the
Liontrust Risk Culture.
Our Values and Risk Culture
EXCELLENCE
• We take personal responsibility for having the due skill and
RESPONSIBILITY
• We are encouraged to follow the spirit of the rules, not just
knowledge to do our jobs well.
the words.
• We own our risks and firmly understand how the risks we
• Senior management lead by example, demonstrating high
manage can impact the firm.
integrity in and outside the workplace.
• We recognise positive risk culture as key element of
successful performance management.
• We aim to correct the root cause of incidents, rather than
• We are encouraged to be transparent and open to provide
our customers with information in a way that helps them
make the right decision.
implement temporary workarounds.
• We do not turn a blind eye to inappropriate behaviour.
• We avoid excess complexity, appreciating that simple
solutions are better and more effective.
• We are trusted and empowered to make decisions given
we follow transparent, systematic, and thorough processes.
• We uphold the highest standards of integrity in all of our
actions, treating staff, clients and stakeholders fairly and
with respect.
• We are committed to contributing to and benefiting the
wider society.
COURAGE
• We are encouraged to “speak up” about any risks or
incidents we are concerned about and deal with issues
before they become major problems.
• We understand that risk management is not about zero risk,
but about taking balanced commercial decisions to achieve
Liontrust’s goals.
• We believe that a diverse workforce promotes innovation
and growth through independent thinking and new ideas.
• We believe that good governance and stewardship,
sustainability and social impact of the companies in which
we invest is an essential part of creating shareholder value
and delivering investment performance for our clients.
• We have committed to integrating sustainability appropriately
• We understand mistakes are inevitable and have the
throughout the business.
courage to own up to them.
• We understand that efficiently learning from mistakes and
sharing our good practises is critical to our success.
• Potential incidents and near misses are treated seriously and
seen as valuable learning opportunities.
• We believe climate change will be a defining driver of the
global economy, society and financial markets in the future,
and that investors will be unable to avoid the impacts of this.
46
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
STRATEGIC REPORT Enterprise Risk Management Framework
In order to ensure that the Group regularly reviews and
monitors all the potential areas of risk to the business, including
emerging risks, Liontrust has implemented an Enterprise Risk
Management (ERM) framework which allows management,
the Audit & Risk Committee and the Board to be kept fully
informed of potential risks to the business and also how these
risks would impact the group’s capital adequacy.
The diagram below summarises the key elements of the
Group’s ERM Framework which is based around these risk
areas to ensure a consistent approach across the framework.
There are three main elements to capturing and reviewing
risk within the Group; the Risk Appetite Statement (“RAS”), the
Internal Capital Adequacy And Risk Assessment (“ICARA”) and
the regular risk reporting. The ICARA superseded the Internal
Capital Adequacy Assessment Process (“ICAAP”) in 2022.
• The RAS identifies key risks, their materiality and their
likelihood of occurrence and sets the amount of risk we
want to take or are willing to accept in order to achieve
our business objectives. Specific focus to be given around
Reputational, Conduct and Sustainability related risks.
• The ICARA combines the RAS and the Group’s financials
together with scenario analysis and stress testing to determine
how the realisation of risks might impact on the Group’s capital
and regulatory requirements.
• The Enterprise Risk Report brings together the ongoing risk
identification, management, monitoring and risk reporting
across the risk universe to ensure the changing risk environment
and the Group’s risk profile versus the RAS is communicated
effectively to the Board.
The risk and uncertainties that affect the Group’s business
can also be broken down into risks that are within the
management’s influence and risks that are outside it. Risks
that are within management’s influence include areas such
as the expansion of the business, prolonged periods of
underperformance, loss of key personnel, human error, poor
communication and service leading to reputation damage
and fraud. Risks outside the management’s influence include
pandemics, regulatory change, climate change, falling
markets, terrorism, a deteriorating UK economy, investment
industry price competition and hostile takeovers.
Liontrust Board
Audit & Risk Committee
Enterprise Risk Report
ICARA
Risk Appetite Statement
Operational Risk Report
Credit Risk Report
Portfolio Risk Report
Ad hoc risk reports
47
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023STRATEGIC REPORT Risk Management Process and Internal controls
The broad process for managing risk in the framework essentially follows these steps:
Define Risk
Universe
Agree Risk
Appetite
Manage
the Risk
Monitor
the Risk
Risk Universe
The Group has identified 8 Risk Areas across the business activities and functions of the Group and uses these Risk Areas to define,
measure and mitigate risk in the business. This forms our risk universe:
Risk
Credit risk
Description
Credit risk covers the risk of loss due to a debtor’s inability to pay. The Liontrust Group maintains a liquidity policy
document which identifies the credit risks that may affect any area of the business and details how these risks are
monitored and controlled.
Market risk
Operational risk
These risks include:
• failure of banks / significant counterparties;
• failure of a client to pay fees;
• failure of a client to pay funds for an investment; and
• failure of a fund to pay redemption monies.
Market risk is the risk that the value of assets will decrease due to the change in value of the market risk factors.
Common market risk factors include asset prices, interest rates, foreign exchange rates, and commodity prices.
Operational risk is the risk of loss resulting from inadequate or failed internal processes, people and systems, or from
external events. The management of operational risk is formalised in a number of ways including risk assessments and
scorecards, documented procedures and compliance manuals, a comprehensive compliance monitoring programme
(both internal and external), issue tracking and a regular assessment of third party providers. Liontrust manages its
operational risk with a framework based upon the Basel Committee on Banking Supervision’s paper “Sound Practices
for the Management and Supervision of Operational Risk” using seven operational risk event types that may result in
substantial losses including:
Event Type
Description/Examples
Internal Fraud
Misappropriation of assets, tax evasion, intentional mismarking of positions, bribery
External Fraud
Theft of information, hacking damage, third-party theft and forgery
Employment Practices
Discrimination, workers’ compensation, employee and workplace safety and wellbeing
Clients, Products, &
Business practice
Market manipulation, antitrust, improper trade, product defects, fiduciary breaches, account
churning
Damage to Physical
Assets
Natural disasters, terrorism, vandalism
Business Disruption &
System failures
Utility disruptions, software failures, hardware failures and disruption due to external events
such as war or pandemic
Execution, Delivery &
Process Management
Data entry errors, accounting errors, failed mandatory reporting, negligent loss of client
assets
Business risk
The potential strategic, business and legal risks arising from poor strategy, competitive pressure, inadequate due
diligence, poor integration of acquisition targets and badly managed divestitures.
Client Management
The risks associated with poor distribution and poor client service including a failure to meet client needs and suitability
/ mis-selling.
Portfolio Management,
Investment and
Liquidity risk
People / Talent
Management
Regulatory,
Compliance, Conduct
and Financial Crime
The risks arising from poor investment returns, incorrect levels of investment risk or liquidity issues in the funds.
The risk of losing experienced and talented staff or a failure to develop or attract staff.
The risk of legal penalties, financial forfeiture and material loss if Liontrust fails to act in accordance with industry laws
and regulations.
48
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
STRATEGIC REPORT There are some risks that cut across the risk universe and so
are analysed separately such as sustainability risk, conduct
risk and reputational risk. Our approach is to individually tag
each of the identified risks in the universe if they are also one
of these risk groupings and then analyse them separately.
Risk Appetite
Liontrust have documented a Risk Appetite Statement for each
of the Risk Areas. They identify the Key Risks facing the Group,
define the Risk Appetite and detail a combination of qualitative
and quantitative measures as appropriate to adequately track
the identified risks. This includes identifying measures that are
not only financially focused, but also measures that align to
customer outcomes, reputation and operational risks.
The risk appetite approach is consistent across the Group. The risks
of each business entity reflects the strategic direction as set by the
Group for their risk appetite in the financial year ahead, and gives
due consideration to the broad range of internal and external risk
factors from the risk universe that impact them. Our overarching
financial risk appetite is to have operational risks cost less than one
percent of annual adjusted profits. This risk appetite guides our
insurance excess and the amount of operational risk we tolerate.
Managing Risk
The internal control system is designed to manage, rather than
eliminate, the risk of failure to achieve business objectives. The
Group’s internal control system is based on a “three lines of
defence” model summarised in the diagram below:
Liontrust Asset Management Plc Board
LIPPM / LFPPM
Audit & Risk Committee
Business Departments
Control Departments
Other Assurance Providers
Front Office
Risk
Internal Audit
Operations
Compliance
External Audit
Sales & Marketing
Finance (Controls)
AAF Assurance Process
Finance (Treasury)
IT Security
Consultancy Reviews
1st line of Defence
2nd line of Defence
3rd line of Defence
49
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023STRATEGIC REPORT Liontrust’s Business Departments, supervised by the Partnership
Committees, are responsible for identifying and managing risk
and control activities within their business lines. This is the first line
of defence. The Control Departments supervised by the Audit &
Risk Committee develop and implement risk frameworks to support
the front line and objectively challenge the identification of risk
and the design of the controls within the business as a whole.
The third line is a review of the risk and control activities in the
Group by parties independent from the design, implementation
and execution to highlight weaknesses, and provide assurance
on the effectiveness and suitability of the internal controls.
Risk Registers and RCSAs
As part of the ERM framework, the Group maintains department
/ team level risk registers. Departments complete Risk and
Control Self Assessments (RCSAs) in which they detail in the
register what risks they own or face, describe the mitigating
controls in place and rate the risks in terms of inherent (pre-
control) risk and residual (post-control) risk. The resulting risk
registers provide a Group-wide bottom-up view of the risks
faced by Liontrust. The ERM framework defines a risk definition
matrix which enables risks across all departments to be
compared in terms of likelihood and impact.
Risk Monitoring
The Group uses a Risk Scorecard system to track Risk Indicators
for measuring levels of risk or to determine levels of Risk Appetite
or Risk Capacity in each of the Risk Areas. Each Key Risk has
one or more risk indicators associated with it. The Risk Indicators
are the key mechanism for tracking of Risk Appetite performance
throughout the financial year from a top-down view. They
highlight when the Group is approaching pre-defined appetite
levels and highlight when action should be considered.
The risk registers form a prospective and complementary monitor
of risk and are categorised using the Group-wide Risk Areas.
The individual risk scores and risk ratings are aggregated into
Key Risks and then Risk Areas to produce a Risk Area scorecard
and heat map respectively. This forms the Group’s Risk Profile
and is designed to allow the Board and senior management
to quickly identify areas of concern and compliance with the
Group’s risk appetite. Where risk levels are approaching or
exceeding appetite, an action plan is agreed, monitored and
reported to the Audit and Risk Committee.
Risk Profile
Each risk register leverages off previous risk registers, various
audits and industry sources to identify their risks. Over
800 risks were identified, assessed, and categorised
into the standard Liontrust risk area taxonomy – with
operational risk categories escalated one level. The
following heat maps illustrate the highest risk rating
within each risk area on the following basis:
• inherent risk rating (pre-control – assuming
the listed controls were not in place) and
• residual risk rating 2023 (post-control – rating given the
current effectiveness of controls)
The inherent vs residual heat maps show a general down and
left movement which shows the effectiveness of the mitigating
controls on our risks.
The heatmap has been divided into Low, Medium and High
risk zones. The red line represents our risk appetite and risks in
the high risk zone are hence beyond our risk appetite. On an
inherent basis, there are several risks which sit beyond our risk
appetite, however on residual basis, they are mitigated down
to manageable levels.
40 risk ratings
increased
77 risk ratings
decreased
In comparing the 2022 residual ratings to those from 2023,
the highest risk ratings within each category remained
the same. Of the risks which were rated last year, 40 risks
have increased in rating, 672 have an unchanged rating
and 77 have decreased. The change in the risk ratings is
driven by a change in the business environment, increased
comprehensiveness of
increased
understanding of the risks and controls.
registers and/or
the
Number of residual risk ratings categorised as Low, Medium
and High for 2023
No risks had an overall high rating and as such all risks were
within our appetite. Any risk is rated high which is above our
risk appetite and would require a risk mitigation plan to reduce
its risk back to within our risk appetite.
0 high rated
251 medium rated
558 low rated
50
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
STRATEGIC REPORT Risk Profile Charts
Inherent risk
1
3
13
10
5
9
12
14
8
4
11
6
7
2
t
c
a
p
m
I
Likelihood
Residual risk 2022
Residual risk 2023
1
1
t
c
a
p
m
I
14
3
4
12
13
5
6
11
9
10
7
Likelihood
t
c
a
p
m
I
8
2
14
3
4
12
13
5
6
11
9
10
7
Likelihood
8
2
Risk Areas
1. Credit Risk
2. Market Risk
8. Operational risk – Business Disruption & Systems
Failures
9. Operational risk – Execution, Delivery & Process
3. Operational risk – Internal Fraud
4. Operational risk – External Fraud
5. Operational risk – Employment Practices and
Management
10. Business risk
11. Client management
Workplace Safety
12. Portfolio Management, Investment risk and Liquidity
6. Operational risk – Clients, Products & Business Practice
13. People / Talent management
7. Operational risk – Damage to Physical Assets
14. Regulatory, Compliance, Conduct and Financial Crime
51
HIGHHIGHMEDIUMMEDIUMLOWLOWHIGHMEDIUMLOWLIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023STRATEGIC REPORT Conduct and Sustainability Risk Profiles
Conduct and Sustainability risk cut across the risk universe,
but due to their importance, we have analysed the Group’s
exposures to these risks. The risk registers enable detailed
tracking of risks across the business. Each risk in the taxonomy
has been tagged if it is conduct and/or sustainability related.
The risks are filtered for those related to Conduct/Sustainability
and used to generate Conduct and Sustainability risk profiles
/ heat maps.
For this analysis:
• Conduct related risks have been defined as risks which may
lead to customer detriment or negatively impacts market
stability.
• Sustainability related risks are defined as those which have
environment, social or governance relation. The scope of
which is the Liontrust Group, its staff, counterparties, and
clients and those Sustainability related risks for investments
that the Group makes on behalf of clients.
The purpose of the analysis is to provide insight into our
conduct and sustainability risk profiles and how they compare
to our overall business risk profile. We aim to build further on
these profiles to better support our conduct and sustainability
risk management. In comparison to the previous year, ratings
marked red have relatively increased while those marked
green have decreased.
For each, categories which are closely linked to clients’ needs
remain highly rated as they are significant for the business and
related to conduct and sustainability. Conversely, categories
relating to internal distribution targets are rated lower.
Conduct Risk 2022 vs 2023
Overall the key conduct related risk ratings are fairly similar
to the previous year, driven by risks such as staff disputes,
trading errors, system failures and regulatory breaches which
may impact clients and our ability to meet their needs.
Conduct Residual Risk 2022
Conduct Residual Risk 2023
1
1
t
c
a
p
m
I
13
3
8
14
12
4
5
9
10
11
7
6
2
t
c
a
p
m
I
14
12
3
4
5
9
11
7
10
13
6
8
2
Likelihood
Likelihood
Risk Areas
1. Credit Risk
2. Market Risk
8. Operational risk – Business Disruption & Systems
Failures
9. Operational risk – Execution, Delivery & Process
3. Operational risk – Internal Fraud
4. Operational risk – External Fraud
5. Operational risk – Employment Practices and
Management
10. Business risk
11. Client management
Workplace Safety
12. Portfolio Management, Investment risk and Liquidity
6. Operational risk – Clients, Products & Business Practice
13. People / Talent management
7. Operational risk – Damage to Physical Assets
14. Regulatory, Compliance, Conduct and Financial Crime
52
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
HIGHHIGHMEDIUMMEDIUMLOWLOWSTRATEGIC REPORT Sustainability 2022 vs 2023
Some change from the previous year, largely due to an
increasing focus on Sustainability related risks. Key risks include
evidencing Sustainability integration in our investments (as
appropriate) and keeping up with regulatory change, staff
disputes and inducement risk.
Sustainability Residual Risk 2022
Sustainability Residual Risk 2023
1
1
t
c
a
p
m
I
5
12
13
14
8
9
3
4
6
10
11
2
7
t
c
a
p
m
I
6
3
14
4
12
5
9
11
13
8
10
2
7
Likelihood
Likelihood
Risk Areas
1. Credit Risk
2. Market Risk
8. Operational risk – Business Disruption & Systems
Failures
9. Operational risk – Execution, Delivery & Process
3. Operational risk – Internal Fraud
4. Operational risk – External Fraud
5. Operational risk – Employment Practices and
Management
10. Business risk
11. Client management
Workplace Safety
12. Portfolio Management, Investment risk and Liquidity
6. Operational risk – Clients, Products & Business Practice
13. People / Talent management
7. Operational risk – Damage to Physical Assets
14. Regulatory, Compliance, Conduct and Financial Crime
53
HIGHHIGHMEDIUMMEDIUMLOWLOWLIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023STRATEGIC REPORT Top Residual Risks
The top-rated risks facing the Group on a residual basis are detailed below. Many of the risks are commercial in nature, reflecting
the impact on the Group should anything lead to a sustained decrease in AUM and as such, many of the key risks remain from
last year.
Risk summary
Failure of Outsourced Service Providers
Strategic Link
Pillar 7 – Strong operations
Description
The failure of an outsourced provider may prevent
the company from carrying out its business.
Trend
Risk Area
Business Disruption
• Primarily deal with large institution which are very reliable or are prompt to fix issues.
Controls
• Outsource Oversight framework, incident management, regular service reviews.
• Some tolerances for limited outages.
Comment
Operating model consolidates services with one primary provider which creates key dependencies and sensitivity to failure.
Outsource oversight and engagement is our primary control to ensure services are robust.
Risk summary Order Management System (OMS) failure
Strategic Link
Pillar 7 – Strong operations
Description
Risk faced should our OMS fail – it is the most
important system in our trading infrastructure.
Trend
Risk Area
Business Disruption
• Trading Resilience Plan.
Controls
• Direct contact with dealing desk.
• Infrastructure continuity testing.
Comment
The OMS is critical for Liontrust in managing our investment portfolios and meeting our client needs.
Risk summary Major economic decline / correction
Strategic Link
Pillar 2 – Investment Performance
Description
Major risk-off movement or correction leading to
large net outflows.
Trend
Risk Area
Business Risk
Controls
• Diversification of product offering.
• Variable cost base.
• Typically would expect markets to recovery in medium to long term.
• Focus on communication and client retention.
Comment
Commercial risk which has a high financial impact risk due to market sensitive AUM directly driving revenue generation.
Further diversification of products will potentially help reduce impact.
54
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
STRATEGIC REPORT Risk summary
The risk of poor customer service
Strategic Link
Pillar 5 – Enhance investor experience
Description
Risk that inferior client service levels provided to
Liontrust clients, failing to meet or exceed client
expectations.
Trend
Risk Area
Client management and mis-selling – poor service
• Clear investment processes which helps communicate and rationalise performance levels to investors reducing short term
negative flows.
Controls
• Well-resourced sales and marketing teams.
• Investment team heavily involved with clients.
• Development of digital channels to improve servicing of clients
Comment
Poor service levels and delays lead to declining client expectations for Liontrust increasing risk of losing clients to higher
performing competitors.
Risk summary
Sustained redemptions year on year
Strategic Link
Pillar 5 – Enhance investor experience
Description
Redemption Mitigation & Management
Trend
Risk Area
Client management and mis-selling – poor service
Controls
• All sales team members service clients with continual reference to our key holders lists.
• Monitoring of sales, client engagement and increased marketing.
• Well established brand.
• Positive long term performance.
Comment
Commercial risk of sustained redemption and declining AUM – high financial impact. The past year has demonstrated how
market conditions can trigger and sustain the negative momentum on outflows.
Risk summary
Loss of key/large clients
Strategic Link
Pillar 5 – Enhance investor experience
Description
Liontrust’s top clients have considerable holdings
which would have a notable impact if they were to
withdraw.
Trend
Risk Area
Client management and mis-selling – poor service
• Clarity around investment process and strategy.
Controls
• Keeping clients informed, including webinars and other digital channels.
• High client engagement and service levels.
Comment
High touch engagement strategies by client service, high investment performance and diversification of clients are our key
mitigations to reduce the impact on Liontrust.
55
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023STRATEGIC REPORT Risk summary
Risk of target net flows not met
Strategic Link
Pillar 5 – Enhance investor experience
Description
Missing targets, could result in profit warnings and
reduced returns for Liontrust shareholders
Trend
Risk Area
Client management and mis-selling – poor service
• Constant monitoring of sales against targets.
Controls
• Engaging clients, increased marketing activity.
• Well established brand.
Comment
Strategic objective for continued growth, exposed to macro and style factors.
Risk summary
Regulatory Breaches (CASS)
Strategic Link
Pillar 1 – Be a responsible company
Description
Failure to monitor Client Assets and follow CASS
rules may result in fines and reputational damage.
Trend
Risk Area
Clients, Products & Business Practice
Controls
• Procedures are in place to prevent breaches.
• Significant investment in oversight and monitoring processing activities.
Comment
Liontrust retains ultimate accountability for client assets and has a key focus client care and regulatory compliance.
Risk summary
Staff disputes / legal action
Strategic Link
Pillar 1 – Be a responsible company
Description
Risk of wrongful or unfair dismissal, leading to
legal action and costs and potential compensation.
Reputational damage and adverse publicity.
Trend
Risk Area
Employment Practices and Workplace Safety
• Terminations performed in accordance with procedures.
Controls
• Close relationship with Employment lawyers.
• Positive, inclusive and supportive workplace culture.
Comment
Acquisitions and poor economic environment correlate with increased likelihood of potential employee disputes. Appropriate
training of staff and HR management of people issues are key controls to reduce likelihood but impact is hard to reduce and
may have significant reputation and financial impact.
56
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
STRATEGIC REPORT Risk summary
ESG Reporting – Investment process
Strategic Link
Pillar 1 – Be a responsible company
Description
Risk that we cannot effectively or efficiently audit
the investment processes from an ESG perspective
and hence cannot meet increasing reporting
requirements.
Trend
Risk Area
Execution, Delivery & Process Management
• Responsible Capitalism (RC) team work with investment teams on annual basis to collect evidence. Use of templates and
Controls
training of investment teams on ESG reporting and evidencing.
• ESG software to help audit investment process.
Comment
Investment is required in order for Liontrust to meet the increasing standards of evidencing for our various ESG reports. Risk
of downgrading should Liontrust not meet the requirements does not have direct financial impact but may have widespread
reputation and brand damage.
Risk summary MPS Model Portfolios
Strategic Link
Pillar 7 – Strong operations
Description
Risk of error due to models being maintained on
spreadsheet.
Trend
Risk Area
Execution, Delivery & Process Management
Controls
• Spreadsheet contains controls, however they are limited compared to OMS.
• Low turnover portfolios with only fund investments.
Comment
Models are still maintained within spreadsheets due to technical difficulties managing the models within the OMS but project
underway to build functionality to service MPS models in the OMS.
Risk summary
Trading Errors
Strategic Link
Pillar 7 – Strong operations
Description
Trading Errors can occur and may result in
substantial compensation payments especially if the
transaction is large or not discovered in a timely
manner.
Trend
Risk Area
Employment Practices and Workplace Safety
• OMS is designed to minimise and mitigate the likelihood of error at all states including the initial order creation stage by the
Fund Managers and the execution of the trades..
• The trades are automatically generated and allocated and rely on as little manual intervention as possible.
• Suitable policies are in place on execution, aggregation and allocation.
Controls
• Procedures have been designed to minimise the risks of trading errors occurring through continual improvements to the
workflow and checking rules.
• Suitable insurance is in place to cover tail risk events.
• Training for Fund Managers and dealers is intended to ensure a clear understanding of the workings of the system.
• Reduction of manual processes.
Comment
Our trading process has robust and thoroughly tested controls, however due to the volume and value of trading completed, it
is inevitable that some errors occur. The vast majority of these are small however empirically we can reasonably expected a
more significant error in the next five years.
57
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023STRATEGIC REPORT 58
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
STRATEGIC REPORT Risk summary
Employee engagement
Strategic Link
Pillar 6 – attract and develop talent
Description
Risk that employee’s goals are not aligned with the
company objectives or otherwise disengaged from
the company’s mission.
Trend
Risk Area
People / Talent management
• Smaller firm enables management to keep in touch with all staff.
• Culture promotes the ability for anyone to raise and discuss issues .
Controls
• Management espousing high performance and standards.
• Co-operative and high-performance team.
• Remuneration management.
Comment
Engaging and retaining talent, especially for acquired firms, is challenging as they adjust to Liontrust’s culture. Systems and
performance issues can further compound and disengage staff.
Risk summary Key man risk – Fund managers
Strategic Link
Pillar 6 – attract and develop talent
Description
Loss of key fund managers which could immediately
lead to suspension of buy ratings and likely
redemptions.
Trend
Risk Area
People / Talent management
• Positive, supportive, and inclusive workplace culture.
• Revenue share and remuneration.
Controls
• Emphasising the team approach rather than single individuals.
• Increased communication with clients.
• Succession planning.
Comment
Certain clients associate their investment more heavily with the fund manager rather than the investment process or Group
leading to significant redemptions on team changes.
Risk summary
Performance – Funds and segregated accounts
Strategic Link
Pillar 2 – Leading investment performance
Description
Failure to deliver strong performance or meet client
expectations.
Trend
Risk Area
Portfolio Management, Investment risk and Liquidity
Controls
• Well documented investment processes.
• Focus on longer term investing.
• Marketing and Fund Manager communications to explain performance and what they’re trying to achieve.
• High touch service for major investors with direct engagement on questions.
Comment
Commercial risk that despite sound long term investment processes, we risk underperformance over shorter periods which is
often associated with increased redemptions.
59
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023STRATEGIC REPORT The most material sources of risk for Liontrust are:
Operational risk
The key operational risks that have been identified as potentially having a significant impact on our business or capital are as follows:
Trading errors
Breach of mandate
restrictions
Corporate
action errors
Failure of key
supplier or system
Suitability risk
Over recent years, Liontrust has successfully integrated the
Architas and Majedie businesses. There has been a higher risk of
operational failures over this period due to the change of systems,
controls and procedures as well as changing staff responsibilities.
The Group made a significant investment in project oversight
and appropriate resourcing, which has mitigated the risks
and Liontrust has devoted considerable management time
to minimise operational risk arising from the integration. The
learnings from previous acquisitions enable Liontrust to more
confidently take on larger and more complex acquisitions.
Cybersecurity and information technology risk
Liontrust is dependent on our IT infrastructure and systems. A
successful cyber-attack could result in the loss of data; disrupt
our ability to service our customers or in a worst-case scenario –
a loss of clients’ assets. Liontrust has included the management
of cyber security into our governance framework for a number
of years and have appointed a virtual Chief Information Security
Officer to ensure we have the right infrastructure and defences in
place. Liontrust also use specialist external consultants to review
and test our IT infrastructure and security including penetration
testing. All significant contracts, or those with sensitive data are
subject to cybersecurity clearance.
Remote working brings additional challenges and vectors for
cyber risk: a reliance on individual’s internet connectivity, more
digital controls, changes in sales techniques, more digital
marketing, video client meetings and webinars. There are
also the medium-term challenges of working digitally including
reinforcing our culture remotely, developing and delivering
online projects and improving productivity, recruiting talent and
managing successful teams outside of the office.
Liontrust undertakes regular incident response training to ensure
it is prepared in the event of a successful attack on ourselves or
a key outsourced service provider. Beyond our comprehensive
IT controls, our best defence against an attack is staff awareness
and training to mitigate social engineered or phishing entry
vectors. Liontrust demands the same commitment to tackling
cybersecurity from its key outsourced providers.
Outsourcing Risk
As we outsource many of our labour intensive operational
functions, we commit high levels of resource to the management
of these third party providers. We work hard to ensure that the
relationship is a collaborative one and that both parties are
working together towards the same goals, via a dedicated
relationship management team and through a comprehensive
monitoring programme. Failure of any outsource provider
presents a real threat to the business and our continuity
planning incorporates a stepped approach to manage and
control these risks.
Acquisition Risk
Liontrust has announced its intention to acquire Swiss based
GAM, a global investment management firm. This acquisition
will bring in considerable diversification of assets and distribution
with a much larger international presence.
Liontrust will leverage its experience and learnings from previous
acquisitions however GAM’s integration will still present
significant risks including:
• Sufficient expertise to ensure compliance with the broader
and more complex regulatory environment.
• Challenges integrating the assets and operations into
Liontrust’s operating model.
• Cultural integration ensuring existing and incoming staff are
aligned and engaged.
• Challenges retaining the key personnel and knowledge from
GAM.
• Re-location risk of migrating existing Liontrust staff to the
GAM office.
• Strain on existing resources to manage the integration on top
of their BAU workload.
Leveraging the expertise of consultants to oversee and project
manage the integration is a key control to ensuring the above
risks are mitigated.
60
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
STRATEGIC REPORT
Sustainability Risk
Liontrust may be negatively impacted by an ESG event or issue.
There are multiple impacts of ESG or climate on companies.
Liontrust may be impacted directly, via our outsource partners or
through our investments in companies on our clients’ behalf. The
impacts may come from physical risks (extreme weather events,
or supply shortages) or from exposure to transition risks which
arise from society’s response to climate change (technological
change, social upheaval or regulation). These can change
business costs, alter the viability of products or services, or alter
asset values. There are also legal costs and potential liabilities
for climate-related actions.
This year we have worked on modelling these potential impacts
into our Enterprise Risk Framework as described earlier. Further
information on our efforts to manage this risk and integrate
sustainability throughout our business is in the “Responsible
Capitalism” section of this report on page 70.
Client Concentration and the risk of redemptions at short notice
Liontrust has several large, key clients and relationships. Should
a large client leave (or conversely a new large client be
acquired) there is a risk that earnings may be impacted. Liontrust
has successfully grown our client base over the last few years
and this has reduced the impact of a single client redeeming.
Clients are also able to withdraw their assets at short notice. The
retail funds have daily liquidity and most institutional mandates
have no lock in periods or liquidity constraints. This may mean
that in times of crisis assets under management may fall quickly
increasing the potential volatility of earnings. This is mitigated
by the Group’s variable cost base as described in the Market
risk section above.
Competitive Environment
Liontrust operates within a highly competitive environment
with both local and global businesses, many of which have
greater scale and resources. The changes to the regulatory
and business landscape have resulted in a greater focus on
fees & charges, a growing importance of brand & marketing
and distributor relationships. Initiatives such as Consumer Duty
and the Assessment of Value promote transparency and enable
clients to better compare funds. Failure to compete effectively
in this environment may result in loss of existing clients and a
reduced opportunity to capture new business which may have a
material adverse impact on the Group’s financial wellbeing and
growth. Our governance and leadership help to ensure that the
Group remains competitive and does not lose focus.
General macro-economic and political risk including the
invasion of Ukraine by Russia and recent bank credit concerns
The Group is susceptible to any economic downturn, policy,
increased interest rates, exchange rate fluctuations, geo-
political conditions, volatility and or/price increases in energy/
commodity markets and volatility in world markets. Such
changes in macroeconomic and political conditions may result
in a large fall in the value of assets and therefore substantially
and adversely affect the financial performance of the Group.
In common with the asset management industry as a whole, the
Enlarged Group may be faced with increasingly challenging
investment market conditions with higher interest rates and
inflation. Two recent events, the invasion of Ukraine by Russia
and the credit issues faced by banks including SVB, Credit
Suisse and First National have caused significant volatility in
certain financial and commodities markets worldwide.
Such events may also adversely impact the ability of the
Enlarged Group to operate, for example the invasion of Ukraine
has restricted the ability to trade and value assets relating to
Russian companies. Economic sanctions and the repercussions
from the conflict continue to impact companies globally across
a variety of sectors, including energy, financial services and
defence, among others.
The performance of all funds, not just the Russia fund, may
also be impacted negatively should the war escalate further,
even if they have no direct exposure to the regions involved
in the conflict. We continue to consider the impact of these
scenarios and any other emerging risks in our business decisions
as well as in our capital planning. Liontrust is well capitalised
and positioned to weather these changes and take advantage
of the opportunities arising. All investment teams consider the
investment risks and opportunities that arise as a result of long-
term trends in respect to their portfolios.
People
People are a key part of our business and the stability of our
investment and operational expertise is critical to our success.
The Group takes appropriate steps to manage expectations and
minimise the loss of good quality staff. Any departure of significant
personnel may result in a loss of funds under management,
especially the loss of one of our fund management teams.
Liontrust believes building and maintaining our distinct culture
as well as providing a good working environment is key to
the future success of our business and the engagement and
retention of our staff. We invest significantly in our people,
training and qualifications,
including
providing competitive benefits, promoting diversity and
inclusion while conducting regular workforce engagement
surveys to track our progress
through ongoing
61
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023STRATEGIC REPORT SUMMARY OF CONTROLS
The main elements of the Internal Controls which have operated
throughout the year are as follows:
• a clear division of responsibilities and lines of accountability,
allowing adequate supervision of staff;
• detailed procedures and controls for each department;
• the development and implementation of specific accounting
policies;
• preparation of annual plans and performance targets in light
of the overall Group objectives;
• an operational risk scorecard measuring risk levels across
the Group;
• reports from the Executive Directors to the Board on the
actual performance against plans;
• reports from the Chief Risk Officer highlighting the Principal
risks faced by the Group detailing the exposures, controls
and mitigations in place;
• reports from the Chief Compliance Officer detailing the
robustness of procedures and controls for each department;
• reports from the Head of Finance on controls and risks
concerning client money and assets;
• reports from the Money Laundering Reporting Officer
(MLRO) detailing the arrangements in place for anti-money
laundering and financial crime prevention;
• reports from the virtual Chief Information Security Officer
(vCISO) on cybersecurity and data protection measures;
• reports from Internal Audit on the effectiveness of the Group’s
systems and controls to the Board;
• reports to the Board in respect of the management of, and
results of visits to, third parties to whom functions have been
outsourced;
• compliance by all members of staff with the Group’s policies
and statement of business conduct, which seeks to ensure
business is conducted in accordance with the highest
standards; and
• capture and evaluation of failings and weaknesses and
confirmation that necessary action is taken to remedy the
failings, particularly those categorised as ‘significant’.
Effectiveness of Risk Management and Internal Controls
The Board has reviewed the effectiveness of the Group’s
system of internal controls for the financial year and up to the
date of this annual report and financial statements. The Board
has carried out a robust assessment of the emerging and
principal risks affecting the business , including the principal
risks as noted above and has a process in place within the
business to control and monitor risks on an ongoing basis, in
accordance with the guidance from the Financial Reporting
Council’s Guidance on risk management, internal control and
related financial and business reporting (‘GRM’).
The Board is of the view that all necessary actions have been,
or are being, taken to address matters identified as part of
the ongoing risk management process and that no significant
weaknesses were identified during the year.
ASSURANCE PROCESS
The senior management arrangements, systems and controls
environment in place across the Group are reviewed by the
Board and Audit & Risk Committee each year. The Group
appoint an internal audit function to monitor the appropriateness
and effectiveness of its systems and controls. The Audit & Risk
Committee and the Internal Auditors have agreed a rolling
three year Internal Audit plan. This includes the following
Audit areas: front office controls; data protection, security and
governance; risk management; significant financial systems;
outsourcing arrangements and client assets.
On an annual basis, Liontrust commissions an external
accountancy firm, to perform testing of integrity of aspects of
the Group-wide control environment. Liontrust has adopted
the principles established in the “Assurance Reports on
internal controls of service organisations made available to
third parties” as recommended by the Institute of Chartered
Accountants of England and Wales in the January 2020
technical release of AAF 01/20. RSM UK Group LLP were
appointed to test the controls and to produce the AAF report.
The results of this testing, including any exceptions identified,
are made available to senior management, the Board, the
Audit & Risk Committee and our institutional clients.
62
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
STRATEGIC REPORT STAKEHOLDERS
The Group has a significant number of stakeholders whose
futures are linked to the success of our business.
providing good service and good value is central to how
we conduct business across the Group and we continually
strive to improve our offering and service.
These significant stakeholders are:
• shareholders;
• clients;
• members & employees;
• service providers including those that provide the Group
with outsourced functions;
• regulators & industry bodies; and
• wider society.
Each of these groups presents different opportunities and
uncertainties and the Group ensures that there is regular
contact and monitoring of the various bodies. They are all
integral to the future success of the business, detailed below
is a summary of why they are important and how we engage
with them:
• We aim to provide our shareholders with sustainable
growth and increasing returns. We regularly engage with
our shareholders to support the long-term objectives of our
business.
• Clients are core to the success of our business. We strive
to provide long term performance and meet the needs
and expectations of our clients. Treating customers fairly,
• Liontrust is proud of our people and our culture and they help
us to deliver on our vision and obligations to our stakeholders.
We continue to invest in our staff to attract, retain, incentivise,
develop and encourage the individuals in our company to
meet and surpass our current and future objectives.
• Outsourcing is an integral part of the Liontrust operating
model. Liontrust outsources in two key areas, Transfer
Agency and Fund Accounting & Fund Valuation Services
across two main jurisdictions. Regular meetings and reviews
helps to ensure that the relationship continually improves.
• Liontrust acknowledges the importance of working closely
and constructively with our regulators and our industry
bodies to ensure we run our business in a compliant way
and helps to improve the wider financial environment for
clients in the longer term.
• Liontrust also recognises the wider responsibility we have
to society and the importance of doing the right thing.
We continue to invest and improve our governance and
corporate responsibility including via our community
engagement projects to show the positive impact our
investment management and corporate activities can have
on our clients and wider society.
The Section 172 Report within the Corporate Governance
statement on page 91 provides engagement outcomes and
insight into some of the initiatives undertaken and engagement
activity with significant stakeholders during the year.
63
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023STRATEGIC REPORT OUR PEOPLE
Liontrust is committed to building a sustainable business and
intends that our principles are embedded into our policies
and practices, to the benefit of stakeholders as well as the
wider community.
OUR PEOPLE
Liontrust’s key assets are our people. We are proud of
everyone who works at Liontrust and we invest in their
training, qualifications and development as part of our
strategy to retain talented fund managers and staff.
Everyone at Liontrust is personally accountable for their
commitments, and actions and for, delivering on our
promises. We are responsible for supporting each other,
collaborating and being open to challenge and debate.
All staff have a responsibility to act in the best interests of
investors, shareholders and other stakeholders. We seek to
uphold the highest standards of integrity in all of our actions.
We treat all our staff with respect. We are committed to the
development of our people and encourage everyone to fulfil
their talent and potential. Liontrust recognises the importance
of an appropriate work-life balance, both for the health and
welfare of employees and for the business.
Everyone is encouraged to make decisions. Not every
decision will be right, and we have to be confident enough
to recognise when they are wrong and change them. Many
businesses fail because people don’t make decisions.
Employee Engagement
Liontrust have a highly engaged, experienced and stable workforce, with over half (56%) of staff having been with the firm for five
years or more. Unplanned turnover to March 2023 was 11 % (2022: 11%). We focus on keeping our most talented employees,
and our retention of high-performing employees remains strong at 100 % (2022: 99%).
56%
of employees having been with the
firm for five years or more
Overall turnover in 2023 was
11%
Our retention of
high-performing employees
100%
AVERAGE YEARS’ SERVICE
Less than 1 year
1–5 years
6–10 years
11–15 years
16–20 years
21–25 years
Over 26 years
14%
38%
28%
9%
7%
3%
1%
64
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
STRATEGIC REPORT Liontrust encourages open communication and an inclusive
culture. Liontrust’s Executive team hold regular town hall style
meetings to provide employees with company updates and
to explain and discuss corporate strategies. The Chair and
the Non-executive Directors are active in these meetings.
The members of our Management Committee have an open-
door policy. We also encourage feedback from employees
to senior management through more formal forums, including
regular team meetings and off-sites to discuss our strategy, as
well as through the annual performance appraisal process.
Managers throughout Liontrust have a continuing responsibility
to keep their teams informed of developments and progress.
Workforce Advisory Forum
Liontrust’s Workforce Advisory Forum has representatives from
across the business and includes a Non-executive director. To
maintain links with business strategy, the Forum, is chaired by
the Deputy Head of Finance and supported by HR, serves as
an advisory Forum to the Management Committees and the
Board on matters relating to the workforce of Liontrust. The
Forum supports the Company in two-way information sharing
on matters of workforce importance which may include
engagement, appropriate strategies for the recognition and
development of a diverse workforce and development
opportunities for colleagues. The Forum engages and supports
other committees which may have complementary agendas for
example, the Diversity & Inclusion Committee.
Workforce engagement survey
In December 2022, we partnered with an external firm to
complete our most recent workforce engagement survey. The
overall response rate was 82%, versus an industry average
of the mid 60s%. Our engagement index was 84%, which
is at the norm Liontrust has been compared with a general
normative database of survey responses from over 150
organisations across a variety of sectors. All surveys have
been conducted within the last three years.
The survey was benchmarked against six key areas of
engagement: Engaging Managers; Employee Voice;
Realising Potential; Organisational Integrity, Compelling
Leadership and Health and Wellbeing – we improved our
scores year on year across every area.
87%
73%
82%
83%
75%
89%
Engaging
managers
Compelling
leadership
Realising
potential
Organisational
integrity
Employee voice
Health and
Wellbeing
Following the 2022 survey the external firm presented the results to all staff in a webinar. This gave everyone the same information
and with the expert presentation of the results. During the session employees were able to post and ask questions.
88%
82%
81%
83%
73%
87%
86%
83%
97%
2
2
0
2
1
2
0
2
2
2
0
2
1
2
0
2
2
2
0
2
1
2
0
2
2
2
0
2
1
2
0
2
2
2
0
2
1
2
0
2
2
2
0
2
1
2
0
2
2
2
0
2
1
2
0
2
2
2
0
2
1
2
0
2
Day to day
working life
Learning and
development
Working
together
Leadership
Communication
and technology
Line manager
Our values
Our customers
2
2
0
2
1
2
0
2
Views on
Liontrust
overall
Norm
We can see that the action taken after the 2021 survey has impacted scores and we have received more positive feedback than 2021.
65
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023STRATEGIC REPORT Equal Opportunities, Diversity and Inclusion
Liontrust believes that its people should be appointed to their
roles based on skills, merit and performance and makes all
appointments within the guidelines of its equal opportunities
policy. We are committed to greater diversity, including gender
and ethnicity, and the benefits that this will bring to the business.
We are an equal opportunities employer and it is our policy to
ensure that all job applicants and employees are treated fairly
and on merit regardless of their race, gender, marital status,
age, disability, religious belief or sexual orientation. During the
year, we reviewed and updated our diversity policy; Senior
Management and the Board continue to believe that greater
diversity will enhance the performance of the business.
Liontrust is committed to building a workplace that fosters diversity,
inclusion and equity for its employees. Achieving diversity and
inclusion is an ongoing objective and one that the financial sector
has had to continually work to achieve, especially in terms of
recruiting women and individuals from under-represented ethnic
and/or educational backgrounds. Obviously, it takes time for
D&I related efforts to feed through, from recruitment to training to
progression. While there is still progress to be made, Liontrust is
more cognisant of the areas for improvement in this area and is
working to make progress in these, over time. Importantly, Liontrust’s
executive remuneration is linked to D&I, with a 30% allocation to
ESG as part of the remuneration scorecard for 2022/23. Within
this 30% allocation, 10% focuses on having a joined up approach
to increasing the diversity and inclusiveness of Liontrust.
Diversity and Inclusion Committee
During 2021, we established the Diversity and Inclusion
Committee (D&I Committee) chaired by our COO/CFO which
provides feedback and recommendations to the Management
Committees, Nomination Committee and the Board. The
purpose of the Committee is to address the challenges and
opportunities arising from the following topics:
• Preventing and eliminating discrimination,
including
unconscious bias.
• Raising awareness of the importance and benefits of diversity
enhancing our culture and innovation.
• Ensuring policies and procedures promote diversity across
the company.
• Increasing awareness through training, mentoring and coaching.
• Highlighting changes required to promote diversity.
• Attracting people from diverse backgrounds to join Liontrust
and the asset management industry in general.
The Committee meets regularly to make progress across
this important area. At the outset of the committee we
partnered with GP Strategies (was PDT Global) to deliver
the first Liontrust diversity audit. The recommendations and
conclusions from this audit are influential in the Committee in
developing its strategy.
To continually build on Liontrust’s inclusion, the Committee
have organised all staff training sessions on:
• Allyship
• Understanding Autism
• Unconscious Bias
• Microaggressions
In addition to the training mentioned above, course aimed
at Heads of Department on Inclusion as a Strategic Driver,
the objective of which was to consider how the leaders
approach diversity and inclusion at a strategic level
The Committee have hosted events through the year to ensure
an inclusive culture and somewhere where everyone can be
themselves:
• Bringing Pride to life at Liontrust, encouraging visible support
of LGBTQ+ issues through our website and internal events
• Events during Black History month including showcasing
works by a local artist, talks on Black History in Art and
keynote speaker on Racial Inequality in the Workplace
• Recognising International Women’s day throughout March
with webinars on and a keynote speaker discussing equality
and their leadership journey
• Mindful Mondays over the course of 6 weeks. The sessions
were designed to give staff an introduction to mindfulness
and how it can help to improve overall health and wellbeing.
During the year we have partnered with Mental Health at Work
to develop a well-being and mental health approach. Mental
Health at Work, a not for profit, Community Interest Company
(CIC) and a subsidiary of the Mental Health Foundation help
companies like Liontrust to create a bespoke programmes and
based on feedback from our managers and staff.
The Board regularly reviews the gender split across the Group
and has asked management to address the issue of under
representation of women in senior management. Liontrust has
improved the diversity of the Board over the last few years
currently with 33% female representation. The Board will
continue to work to ensure the composition of the Board and
the workforce as a whole is representative of wider society.
As part of the Executive Directors’ strategic objectives, there
is a commitment to gender-balanced shortlists of candidates
at the beginning of a recruitment process.
Liontrust’s current gender balance is broadly 15:9 male:female
with men predominating in more senior positions. This reflects
the history of the asset management industry, the companies
we have acquired and is typical of the financial industry as
a whole. The Board and senior management are actively
seeking to address this, and have appointed 3 women to
the management team in the past year. Senior management
continue to focus on attracting and retaining female talent
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LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
STRATEGIC REPORT 33%
Liontrust has improved
the diversity of the Board
over the last few years
currently with 33% female
representation
67
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023STRATEGIC REPORT by updating policies and creating a culture to address the
gender balance and gap at Liontrust.
As at the 31st March 2023, Liontrust’s workforce was broken
down between employees and partners as follows:
2023
Employees
Members of LLPs
Total
Male
126
25
151
Female
59%
86%
63%
86
4
90
41%
14%
37%
For the same period, seniority was broken down as follows:
2023
Male
Female
Executive Directors
Senior Managers1
Direct Reports to Executive
Directors & Senior Managers
Other Staff
Total
2
12
40
97
151
100%
80%
–
3
59%
62%
63%
28
59
90
n/a
20%
41%
38%
37%
1Senior managers are identified as the heads of operational
departments, all being direct reports to the CEO, CFO/COO
or Deputy COO
We ensure there is a good gender mix of candidates in all
recruitment, removing all-male recruitment processes, providing
training to staff on diversity, reviewing our policies to remove
unconscious bias and encourage diversity and offering flexible
maternity, paternity and shared parental leave and flexible
working policies to help support staff.
Liontrust tracks and analyses our gender pay gap (the
percentage male employees overall are paid more than
female employees), and it is more than the average for the
financial services sector. Although the gender pay and bonus
gaps between female and male employees could be expected
to decline gradually as we continue to recruit and develop
senior female talent across the business both the Board and
senior management are seeking to transition the business more
quickly.
The McGregor-Smith review on ‘Race in the Workplace’, noted
that in 2016, 14% of the working age population are from a
BAME background, with this expected to increase to 21% by
2051. BAME individuals made up only 10% of the UK workforce
and held only 6% of top management positions in the UK.
As at the 31st March 2023, Liontrust’s total of 241 staff was
broken down as follows:
2023
White
Black
Asian
Other Ethic or Mixed Group
Prefer not to say
177
9
30
16
9
We will continue to encourage our staff to voluntarily disclose
this information as we believe it is important to measure the
effectiveness of our initiatives to allow us to make further
progress where necessary.
The Parker Review sets out achievable objectives and
timescales to encourage greater diversity and provides
practical tools to support Board members of UK companies to
address the issue. The Review recommends that an increase
the ethnic diversity of UK Boards by proposing each FTSE 100
Board to have at least one director from an ethnic minority
background by 2021 and for each FTSE 250 Board to do the
same by 2024. Liontrust already meets this recommendation.
Investment 20/20 Internship Programme
Liontrust first partnered with the Investment Association in
2019 for its Investment 20/20 Internship programme, which
introduces young people to the asset management industry
on a fixed term contract basis. The initiative helps interns to
gain industry knowledge and experience and to develop
relationships, enabling them to progress in their careers and
providing them with skills to secure a permanent role.
As part of the Investment 20/20 programme, trainees have
opportunities to meet and network with over 200 of their
peers across the industry and participate in social and insight
events. Investment 20/20 also provides training on technical
and soft skills.
During 2022 we hired 3 further trainees in support areas.
Trainees receive hands-on support and training. They have
established themselves well in their roles and are actively
supporting and contributing to the performance of the teams.
Liontrust is committed to supporting our graduates to study and
gain qualifications as well as offering a range of personal and
professional training opportunities during the placements.
Mentoring and Coaching Programme
Liontrust has offered coaching to its staff for a number of years
and is working in 2023 to introduce a formal mentoring
programme. The aim of the programme is to support managers
and staff to enhance skills, attitudes and behaviours that
support their ongoing growth and development as well as the
overall performance of the business.
In addition to using our learning management system which
enhances our internal training, we encourage all our staff
to acquire business relevant qualifications and offer support
packages to enable them to do so.
Our investment professionals are required to achieve standards
above the regulatory minimum with a particular focus on the
CFA’s Investment Management Certificate (IMC) qualification
for investment staff.
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LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
STRATEGIC REPORT Senior Leadership Development Programme
During 2022 we invested in a development programme for
our employees, the objectives of the programme is to increase
the effectiveness of leadership at Liontrust, focusing on:
• Purpose
• Leadership Identity
• How to leverage strengths, recognising weaknesses and
preferences
• Establishing shared leadership standards and behaviours
• Decision making
• Conflict confidence
One the outputs of the 2022 attendees is a ‘Leadership Charter’
which defines the Liontrust leadership purpose, values, identity
traits and desired behaviours. This will be used to establish a
framework for the development of future talent through 2023.
Remuneration
We maintain a remuneration approach that promotes a
strong customer-centric culture, as well as risk awareness and
performance with a good alignment of staff, investor and
shareholder interests.
Our benefits package provides a generous array of financial,
health and well-being, lifestyle and family-friendly options for
employees:
• We encourage a good work-life balance with generous
annual leave and other benefits including cycle to work,
season ticket loans and freely available fresh fruit in the
offices
• We introduced a cash ‘wellbeing allowance’ which is paid
monthly for staff to put towards any wellbeing initiative they
want
• Private medical insurance, comprehensive health checks,
eye care, an employee assistance programme with access
to confidential counselling support, and a further range of
health and well-being options.
• Health cash plan which gives access to additional health
services not covered under the traditional private medical
scheme, such as alternative therapies
• Employer pension contributions to a defined contribution
pension scheme.
• Life assurance policy and income protection scheme from
the first day of employment, providing financial security and
protection for when it really matters.
We ensure our staff are aware of all the benefits afforded to
them and have held webinars with the provider to showcase
the terms.
All-employee Tax Efficient Share Schemes
Our SIP (Share Incentive Plan) offers the opportunity for
employees to purchase Liontrust shares tax free. To further
enhance this, for every share an employee purchases,
Liontrust purchases two shares on their behalf. This benefit is
offered within the maximum limits as set by HMRC, allowing
employees to ‘buy into’ the success of the company in a tax
efficient way and is available to all employees who have at
least three months service. As of 31 March 2023, 77% of
employees opted to participate in the SIP. To give employees
the tools to understand how their investment is performing we
have consolidated all employee share schemes into a single
employee share schemed platform in partnership with Equiniti,
who act as our registrar.
Work-life balance, health and well-being
Liontrust recognises the importance of an appropriate work-life
balance, both to the health and welfare of employees and
to the business. Physical and mental wellbeing are important
to Liontrust. Offering private health care that includes mental
health support, physical health assessments and access to
an employee assistance programme that provides a 24/7
counselling service, supports employees.
Liontrust also
encouraged staff to take breaks from work during the lockdown
by providing additional holiday allowances over the period
and allowing staff to carry additional unused vacation days
over at year end.
Liontrust is actively developing a wellbeing and mental health
strategy, supported by the D&I Committee.
Liontrust offers informal flexible working arrangements of a 3:2
split between the office and home. All staff have the option to
make use of the informal flexible work arrangements, where
their role allows for this.
Liontrust continues to offer additional ad hoc flexible working
over and above the informal flexible working policy where
necessary.
Living Wage
Liontrust is committed to offering fair pay to all by paying
staff at least the London Real Living Wage. This means that
every member of staff based in London, including contracted
maintenance and reception teams, earns at least a “living
wage” which is an hourly rate higher than the UK minimum
wage that is set independently, updated annually and based
on the cost of living in London.
Our two offices outside London employ staff who are
remunerated above applicable minimum or living-wage
requirements.
Liontrust does not use zero hours contracts.
Liontrust’s Equal Opportunities and Diversity Policies outline
that all Liontrust employees (temporary and permanent),
partners, contract workers and job applicants are treated fairly
and are offered equal opportunity in selection, training, career
development, promotion and remuneration.
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LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023STRATEGIC REPORT RESPONSIBLE CAPITALISM
Responsible Capitalism is the platform on which Liontrust
brings together its ESG integration, stewardship, and
sustainability-related activities.
Responsible Capitalism is about focusing on what matters
most to our clients, our employees, our wider stakeholders
and our investments. Liontrust points to its investment teams
and their respective investment processes in determining what
matters most. Each team is expert in managing its funds and
understanding its holdings. Where material issues arise, the
teams often focus on these topics during engagement and take
that engagement into consideration when making investment
decisions. Using this focus on materiality, engagement,
and (as appropriate) issue management, Liontrust and its
investment teams can more accurately determine what to
spend time and energy on to provide the best service to our
clients across every aspect of our operations.
For Liontrust’s business, we take account of the exposures that the
Group faces and work to manage these effectively. Liontrust aims
to be transparent about the risks and opportunities it faces as a
business and provide information on how we manage these. Details
on our own exposures are on page 46. For Liontrust, two areas to
which the Group has exposure are: attracting and retaining talent
and the financed emissions that we hold in our funds. During the
year, Liontrust took action on both of these exposures.
ATTRACTING AND RETAINING TALENT
Attracting and retaining talent continues to be a key objective for Liontrust. The group seeks to achieve this by:
Offering employees
opportunities for career
development/advancement
Providing a range of
employee benefits
Undertaking an annual
employee survey conducted
every December to monitor
employee engagement levels
Increasing its
focus on D&I
Striving for “one culture”
to help bridge Groups and
teams post acquisitions;
understanding issues as they
arise across the Group
These are explored in more detail in the previous section – Our People
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LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
STRATEGIC REPORT FINANCED EMISSIONS
Liontrust’s Commitment to Net Zero
Liontrust – across its business and investments – is committed to
achieving net zero greenhouse gas emissions by 2050. The
Group has undertaken this commitment as part of its fiduciary duty
to clients – to understand the key exposures that its investments
face and to make well informed decisions. The Group also feels
that this commitment helps it promote well-functioning financial
systems as it makes informed investment decisions and takes
responsibility for its own financed emissions.
Net Zero Asset Managers (NZAM) initiative
In May 2022, Liontrust joined the Net Zero Asset Managers’
(NZAM) initiative to adopt formally this goal. Liontrust will
submit its first report to NZAM by the end of May 2023,
which will set out the initial percentage of AuMA that the
Group commits to the goal. This percentage will increase over
time. As data becomes more reliable and available, Liontrust’s
investment teams will have a clearer understanding of how to
account for carbon emissions across all asset classes, and the
investment teams should see more clearly the impact of net
zero efforts on their funds’ investments. The speed at which
Liontrust’s funds move towards net zero will vary between the
teams, depending on each investment process. Following
the Group’s first submission to NZAM before the end of May
2023, Liontrust will report annually on its progress against
targets, either through CDP’s annual assessment or via the PRI’s
annual reporting tool. Liontrust plans to submit a report in the
summer of 2023.
The Group has an engagement plan for investments that are
high emitters and which are held in funds that have committed
to the Group’s net zero goal.
RESPONSIBLE CAPITALISM TEAM
Liontrust’s six-strong Responsible Capitalism team, led by the
Head of Responsible Capitalism, has a remit to implement the
Group’s Responsible Capitalism strategy across its operations.
The Responsible Capitalism team provides investment teams (as
appropriate and needed) with information on material exposures
that their investee companies may face. These material exposures
include, but are not limited to, ESG-related exposures that could
impact the prospects of a company. The Responsible Capitalism
team oversees Responsible Capitalism-related policies (which
are approved by the Responsible Capitalism committee and
include the Group’s Environmental policy, Engagement policy,
Proxy Voting policy, Corporate Governance guidelines, and
ESG integration policy); administers Liontrust’s proxy voting
(as agreed with each investment team); reports annually on
Liontrust’s Responsible Capitalism activities; helps to deliver
ESG reporting for the Group and the funds, including reports
required under European and UK regulations; and plans and
implements Liontrust’s net zero commitments across its operations
and investment funds committed to net zero.
LIONTRUST’S RESPONSIBLE CAPITALISM OBJECTIVES FOR CALENDAR YEAR 2023
Liontrust aims to enhance Responsible Capitalism across the Group and its investments in a number of ways in 2023. These
objectives link directly with the Group’s purpose and also with its overall strategy to grow the business by way of its seven strategic
pillars listed on page 16.
Plc / Investments Area
Description
Investments
Data and insights • The Responsible Capitalism team will continue to assist the investment teams in assessing and reporting
on materiality for holdings and engagement.
• The Responsible Capitalism team will continue to capture the insights from the investment teams to build
a data set for analysis, auditing, and reporting purposes and to enable the teams to evidence more
effectively what they do.
IT systems
The Responsible Capitalism team, working with the business, will work towards developing a bespoke
system to house data and ESG-related insights for our investment teams (and/or for its Responsible
Capitalism team) for the purposes of auditing, analysis and tracking the data and for reporting to
clients.
Carbon scenario
testing
For teams committing AuMA to the Group’s net zero commitment (with NZAMi), Liontrust will review
creating functionality that will enable investment teams to understand the potential impact of their
investment decisions on fund carbon metrics.
Group
Training and
mentoring
The Responsible Capitalism team will work closely with Liontrust’s HR department to continue developing
Liontrust’s mentoring programme, internship and graduate training programmes (or similar).
Environmental
footprint – waste
and water
Carbon and risk
The Responsible Capitalism team may measure the Group’s current (baseline) environmental footprint for
waste, water (and other related areas) and set targets for these reductions.
The Group may consider more effective ways to undertake carbon scenario testing in Liontrust’s risk
management framework and explore science based targets (SBT) for the Group’s operations.
Senior Leadership
Training
The Group will continue the work started in 2022 for training senior leaders across the business in terms
of collaborative working practices, mentoring and supporting teams, and ensuring a cohesive culture.
For further information on the Group’s Responsible Capitalism approach and performance, please refer to the Liontrust Responsible
Capitalism Report for the calendar year 2022 and FRC Stewardship Code Response, which is available on our website.
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LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023STRATEGIC REPORT
THE GROUP’S GHG EMISSIONS
The following information summarises the Group’s direct and indirect environmental performance for the calendar year ending 31
December 2022:
Category
Source
2022 GHG
emissions
(tCO2e)
*Restated
2021 GHG
emissions
(tCO2e)
Reported
2021 GHG
emissions
(tCO2e)
% year on
year change
2022 vs
Restated
2021
14
13
13
8%
Heating Oil
UK Offices – zero
Luxembourg office – 14
(tCO2e)
UK offices – 62 (tCO2e)
Luxembourg office <1 (tCO2e)
UK offices – 3 (tCO2e)
Luxembourg office – zero
62
3
59
2,600
5%
4
249
-25%
SCOPE 1
Stationary combustion
SCOPE 2
Electricity
(location-based)
Electricity
(market-based)
SCOPE 3
Goods & Services
5,258
Purchased goods & services
Water
Fuel-and-energy-related activities
Purchased electricity
Stationary combustion
Landfill
Waste to energy
Recycling
Air travel
Rail travel
Road travel
Hotel stays
UK commuting
UK working from home
(WFH)
Luxembourg commuting
Luxembourg WFH
Waste
Employee commuting
Scope 1& 2
(location-based)
Scope 1 & 2
(market-based)
Total (location-based)
Total (market-based)
Scope 1& 2 intensity per FTE (location-based)**
Scope 1& 2 intensity per FTE (market-based)**
<1
8
3
<1
<1
<1
246
12
46
33
118
59
7
2
76
17
5,869
5,810
0.35
0.08
72
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
—
—
—
—
—
—
—
37
4
20
—
—
—
—
—
72
17
133
78
0.36
0.09
—
—
—
—
—
—
—
37
4
20
—
—
—
—
—
2,612
262
2,673
323
13.19
1.32
—
—
—
—
—
—
—
565%
200%
130%
—
—
—
—
—
5%
0%
–
–
-4%
-11%
STRATEGIC REPORT *Calculation of Liontrust’s 2022 Scope 2 emissions uncovered
large year-on-year changes in results. Upon further investigation
into the reasons driving these changes, it was discovered that
the electricity consumption data for 2021 emissions was mis-
calculated. Therefore, Liontrust has taken steps to re-calculate
Scope 2 emissions for 2021 and restate its 2021 Scope 2
location-based and Scope 2 market-based metrics in its 2022
report. As a result of this restatement, the Scope 1 & 2 location-
based FTE intensity and Scope 1 & 2 market based FTE intensity
metrics have also been re-calculated and restated.
**The emission intensity calculation is based on a figure of
218 FTE employees in 2022. Overall, emissions for scope 1
& 2 emissions (location-based) were 0.35 tCO2e and scope
1 & 2 emissions (market-based) were 0.08 tCO2e.
**The emission intensity calculation is based on a figure of
198 employees in 2021. Overall, restated scope 1 & 2
emissions (location-based) were 0.36 tCO2e and restated
scope 1 & 2 (market-based) were 0.09 tCO2e.
independent
represents KPMG’s
limited assurance
over Scope 1 and 2 metrics for the 2022 data subject to
independent limited assurance under ISAE (UK) 3000 and
ISAE3410. The assurance opinion provided by KPMG can
be found on page 126 of the Responsible Capitalism report
on our website.
Liontrust reporting criteria for greenhouse gas emissions is
available on page 130 of its 2023 Responsible Capitalism
report.
73
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023STRATEGIC REPORT
TASKFORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES (TCFD)
Liontrust has prepared the calendar year 2022 TFCD report in accordance with Listing Rules on Disclosure of Climate-Related
Financial Information under the FCA rule (captured under LR 9.8.6R (8) and LR 9.8.7R). The report is standalone and is available on
our website. For calendar year 2022, Liontrust acknowledges that it is not wholly compliant due to lack of reporting on scenario
analysis. The Group plans to develop its approach in this area during 2023 and aims to develop its TCFD reporting accordingly. The
2022 TCFD report has also been prepared in the context of current FCA Consumer Duty requirements. As an asset manager, Liontrust
is required to inform its clients of the risk exposures in their portfolios and to communicate this in its FRC Stewardship Code response
and bespoke client reporting. The below table summarises Liontrust’s disclosures according to the principal TCFD recommendations:
TCFD Category
Key Recommended Disclosures
Liontrust's Response
a) Describe the board’s oversight of climate-
related risks and opportunities.
• The group’s board has oversight of all Liontrust’s risks and
opportunities, including those related to climate change.
b) Describe management’s role in assessing and
managing climate-related risks and opportunities.
• The potential impact of climate change on the business and future
strategy, and in particular, on the group’s ability to deliver long-term
superior performance, is regularly discussed at board level.
• The Chief Executive is accountable to the Board for overall Group
performance, including climate-related risks and opportunities.
Governance
Disclose the
organization’s
governance around
climate related risks
and opportunities.
Strategy
Disclose the actual
and potential
impacts of climate-
related risks and
opportunities on
the organization’s
businesses, strategy,
and financial
planning where
such information is
material.
a) Describe the climate-related risks and
opportunities the organization has identified over
the short, medium, and long term.
b) Describe the impact of climate-related
risks and opportunities on the organization’s
businesses, strategy, and financial planning.
c) Describe the resilience of the organization’s
strategy, taking into consideration different
climate-related scenarios, including a 2°C or
lower scenario.
Risk Management
Disclose how
the organization
identifies, assesses,
and manages
climate-related risks.
a) Describe the organization’s processes for
identifying and assessing climate-related risks.
b) Describe the organization’s processes for
managing climate-related risks.
c) Describe how processes for identifying,
assessing, and managing climate-related risks
are integrated into the organization’s overall risk
management.
• While over the short to medium term Liontrust does not have high
exposure to climate change- related risks (compared to the exposure
it has in other areas), the group does have exposure to different risks
related to climate change.
• Risks and opportunities have been considered at both the group
level (Liontrust plc) and for financed emissions (Liontrust’s investments)
and in the context of short, medium and long-term time horizons.
• In May 2022, Liontrust joined the Net Zero Asset Managers’
(NZAM) initiative to adopt formally its goal to achieve net zero
greenhouse gas emissions by 2050, across its business and
investments.
• Liontrust has spent some time on undertaking climate scenario
planning and expects to continue development in this area going
forward.
• At Liontrust, climate-related risk is considered in terms of three main
risk categories by the Risk team; Enterprise Risk, Investment Risk and
Prudential Risk.
• Climate-related risks are integrated into Liontrust’s overall ERM
framework and considered in terms of materiality in line with other
risks identified in the risk-assessment process.
• Liontrust’s exposure to climate change-related risk at the group level
is far less significant than its exposure via its investments. At the
investments level, each investment team identifies and manages
climate-related risks according to its investment process.
• Various climate-related scenarios are included in Liontrust’s internal
capital adequacy assessment program to simulate the impact of
climate change on the Group’s prudential modelling
Metrics and Targets
Disclose the metrics
and targets used to
assess and manage
relevant climate-
related risks and
opportunities where
such information is
material.
a) Disclose the metrics used by the organization
to assess climate-related risks and opportunities
in line with its strategy and risk management
process.
b) Disclose Scope 1, Scope 2, and, if
appropriate, Scope 3 greenhouse gas (GHG)
emissions, and the related risks.
• Liontrust engaged Good Business to calculate its Scope 1, Scope 2,
and Scope 3 (purchased goods & services, fuel and energy-related
activities, waste, business travel, and employee commuting) GHG
emissions for the calendar year 01 January 2022 to 31 December
2022.
• Liontrust commits to reduce its Scope 1 & 2 (market-based) GHG
emissions by 42% by 2030 from a 2022 base year.
c) Describe the targets used by the organization
to manage climate-related risks and opportunities
and performance against targets.
• Liontrust utilises MSCI Carbon Analytics modules for all investment
teams (excluding Multi-Asset funds) to provide detailed carbon
emissions analysis across all portfolios.
• In committing to NZAM, Liontrust has established definitions of
‘aligned’ and ‘aligning’ with regard to net zero.
• Liontrust has set targets for the proportion of its AUM that has
committed to NZAM.
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LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
STRATEGIC REPORT 75
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023STRATEGIC REPORT GOVERNANCE
Board of Directors
Risk management and internal controls report
Corporate Governance report
Directors’ report
Directors’ responsibility statement
Nomination Committee report
Audit & Risk Committee report
Remuneration report
78
83
86
97
102
103
108
112
BOARD OF DIRECTORS
The biographies of the Directors of the Board are listed
below and demonstrate the skills and experience of each
Director. The Directors work effectively together to contribute to
the long-term sustainable success of the Company, both for its
shareholders and wider stakeholders. The Board prides itself
on its effective and entrepreneurial approach to developing
strategy and collectively, with the leadership of the Chair
establishes the purpose, values and culture of the Group.
CHAIR
Alastair Barbour
Non-executive Chair
Appointed: Alastair joined the Board in April 2011 and was
appointed Non-executive Chair in September 2019.
Committees: Chair of the Nomination Committee.
Skills and experience: Alastair has extensive knowledge and
experience advising on accounting and financial reporting,
corporate governance and management in the financial
services sector, both within the UK and internationally. He
has over 30 years of audit experience and is a chartered
accountant, having trained with Peat, Marwick, Mitchell &
Co, a former partner of KPMG in both Bermuda and London.
Alastair has core skills and expertise in the areas of mergers
and acquisitions, accounting and financial reporting, corporate
governance and management. Alastair’s breadth of experience,
focus on culture and strong corporate governance expertise
allow him to provide constructive challenge and oversight.
Alastair’s in-depth knowledge combined with his prior board
experience, having held senior board level positions in several
high profile financial services organisations, enable him to lead
the Board effectively and are key to the delivery of the Liontrust
strategy and the long-term sustainable success of the Company.
Other directorships and commitments: Phoenix Group
Holdings Plc (Interim Chair until November 2023). Lead
Independent Director of the Bank of N.T. Butterfield & Son
Limited (NYSE listed)
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LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
GOVERNANCE EXECUTIVE DIRECTORS
John Ions
Chief Executive
Vinay Abrol
Chief Operating Officer and Chief Financial Officer
Appointed: John joined the Board in May 2010.
Appointed: Vinay joined the Board in September 2004.
Skills and experience: John has significant leadership and
management experience in the financial services sector and
in-depth knowledge of the asset management sector. He was
previously Chief Executive of Tactica Fund Management, Joint
Managing Director of SG Asset Management and the Chief
Executive of Société Generale Unit Trusts Limited, having been
a co-founder of the business. John was also formerly Head of
Distribution at Aberdeen Asset Management.
John has core skills and expertise in the areas of mergers and
acquisitions, the integration of acquired businesses, regulation,
sales and distribution. John is a skilled leader and draws on
his substantial experience and knowledge of the sector to lead
the Group as its Chief Executive. John’s strong leadership skills,
focus on strategic decisions and substantial asset management
experience are integral to the delivery of Liontrust’s strategy and
the long-term sustainable success of the Company.
Skills and experience: Vinay has significant knowledge of
financial services having held a number of senior roles within
the sector. Vinay joined Liontrust in 1995 and has in-depth
expertise in finance, information technology, operations,
risk and compliance. After obtaining a first-class degree in
computing science from Imperial College London, Vinay worked
for W.I. Carr (UK) Limited specialising in the development of
equity trading systems for their Far East subsidiaries, HSBC
Asset Management (Europe) Limited where he was responsible
for global mutual funds systems and at S.G. Warburg and Co.
Vinay has core skills and expertise in the areas of mergers and
acquisitions, the integration of acquired businesses, finance,
operations and regulation. Vinay’s financial and operational
expertise and his experience of integrating businesses is
vital to the delivery of Liontrust’s strategy and the long term
sustainable success of the Company.
Other listed directorships: John has no external directorships.
Other listed directorships: Vinay has no external directorships.
79
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023GOVERNANCE NON-EXECUTIVE DIRECTORS
Mandy Donald
Non-executive Director
Rebecca Shelley
Senior Independent Director
Appointed: Mandy joined the Board in October 2019.
Appointed: Rebecca joined the Board in November 2021.
Committees: Chair of the Audit & Risk Committee. Member
of the Nomination Committee and Remuneration Committee.
Committees: Member of the Nomination Committee, Audit &
Risk Committee and Remuneration Committee
Skills and experience: Mandy has extensive experience in both
complex organisations and early stage environments, and
brings a background of strategic planning, financial and
operational management to the Company. Through experience
gained in previous roles, Mandy’s broad knowledge across a
range of subjects allows her to support the Board and its
Committees on delivering the Liontrust strategy whilst providing
effective oversight and constructive challenge. Mandy spent
18 years with EY before steering her focus towards the growth
of new companies, serving on the boards of a diverse range
of start-up businesses. Mandy is a chartered accountant and
holds a Financial Times Non- Executive Diploma with a focus
in corporate governance.
Mandy is Liontrust’s Consumer Duty Champion and designated
workforce liaison to the Board.
Other directorships and commitments: Begbies Traynor Group
Plc. JP Morgan US Smaller Companies Investment Trust Plc.
Skills and experience: Rebecca has a wealth of experience
acquired through a number of senior and leadership roles held
throughout her career. Having been Investor Relations and
Corporate Communications Director at Norwich Union Plc
from 1998-2000, Rebecca moved to Prudential Plc in 2000,
starting as Investor Relations Director, and then becoming
Group Communications Director with a seat on their Group
Executive Committee. Rebecca also held the role of Group
Communications Director of Tesco Plc and was a member of
their Executive Committee. Rebecca has held positions on the
board of the British Retail Consortium and was a trustee of the
Institute of Grocery Distribution. Most recently Rebecca spent
three years at TP ICAP plc as Group Corporate Affairs Director
and was a member of their Global Executive Committee.
Rebecca’s breadth of experience and in-depth knowledge
of effective communication ensures she provides oversight,
constructive challenge and support to the Board and its
Committees to achieve Liontrust’s strategy and the long term
sustainable success of the Company.
Rebecca is Liontrust’s named Non-executive Director for
Responsible Capitalism, including all ESG matters.
Other directorships and commitments: Sabre Insurance Group
Plc. Hilton Food Group Plc.
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LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
GOVERNANCE
DETAILS OF THE BOARD’S
RESPONSIBILITIES CAN BE
FOUND ON PAGE 103
George Yeandle
Non-executive Director
Appointed: George joined the Board in January 2015.
Committees: Chair of the Remuneration Committee. Member of
Nomination Committee and Audit & Risk Committee.
Skills and experience: George is a chartered accountant
with over 30 years’ experience having specialised throughout
most of his career in advising clients on executive pay and
remuneration. George trained with Coopers & Lybrand
(now PricewaterhouseCoopers LLP) before being admitted as
a partner in 1989. More recently, George was Operational
Leader of the London Region Human Resource Services Business
and a Senior Partner of PricewaterhouseCoopers LLP, retiring in
December 2013.
George has held a number of leadership roles within the
financial services sector and uses his in-depth understanding and
knowledge of remuneration matters in his role as Chair of the
Remuneration Committee. George brings constructive challenge
and independent oversight to the Board and its Committees.
Other directorships and commitments: George has no other
listed directorships
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LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023GOVERNANCE
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LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
GOVERNANCE RISK MANAGEMENT AND
INTERNAL CONTROLS REPORT
The Board is ultimately responsible for determining the risk
appetite, risk strategy and risk management framework of
the Group. The FCA have noted that it is for each individual
firm to determine, based on its nature, scale and complexity,
as well as its attitude to exposure to risk, whether or not to
establish a Risk Committee of the governing body. The Group
has determined not to establish a separate Risk Committee
but to combine it with the Audit Committee, although this is
reviewed on an annual basis.
The Audit & Risk Committee, on behalf of the Board, is
accountable for, and responsible for, overseeing the Group’s
financial reporting, risk management and system of internal
controls, including suitable monitoring procedures, which
are designed to provide reasonable, but not absolute,
assurance against material misstatement or loss. The Audit &
Risk Committee, on behalf of the Board, is also responsible
for keeping under review the scope, results, fees and the
independence of the external auditors.
Edward Catton, Chief Risk Officer, is responsible for
overseeing all risk management of the Group and monitors
the Group’s risks in a pro-active manner, with all departments
fully aware of and managing the key risks appropriate to their
responsibilities. All material risks to the business are monitored,
appropriate mitigations for each risk are recorded and
identified to the Board with markers for those with increased
risk levels. Management recognise the importance of risk
management and view risk management as an integral part of
the management process which is tied into the business model
and is described further in the Principal risks and mitigations
section of the Strategic Report on pages 46 to 63.
GOVERNANCE FRAMEWORK – COMMITTEE STRUCTURE
AND DELEGATION OF POWERS
The Corporate Governance report on page 86 details the
Board’s and the Chief Executive’s responsibilities for organising
and implementing the strategy of the Company. The Board
has delegated a number of its responsibilities to three
subcommittees; the Audit & Risk Committee, the Nomination
Committee and the Remuneration Committee.
The Board reviews and evaluates the ongoing long-term
success of the Company ensuring all policies, processes and
delegation of powers remain aligned and supports the long-
term success of the Company. The Board has delegated the
authority for the executive management of the Group to the
Chief Executive except where any decision or action requires
approval as a Reserved Matter in accordance with the
Schedule of Matters Reserved for the Board. The Schedule of
Matters reserved for the Board is maintained and reviewed
on an annual basis, with the last review date being 20 January
2023. The Group has set up two management committees
to assist the Chief Executive and manage the affairs of the
83
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023GOVERNANCE respective limited liability partnership in accordance with
its members’ agreement. The Board regularly reviews the
ongoing work of the management committees to ensure the
implementation of the Group’s purpose, values and strategy
remain aligned. Details of the two management committees
are as follows:
Liontrust Fund Partners LLP Partnership Management
Committee (“LFPPM”)
Areas of Oversight
Retail and institutional distribution and marketing, advertising,
promotion of Liontrust Funds, Transfer Agency, Information
Technology (including business continuity), Treating Customers
Fairly (shortly to be updated to the Consumer & Conduct
Committee in line with the Consumer Duty regulation, effective
from 31 July 2023), Compliance & Financial Crime Prevention,
Human Resources, Finance, product development and other
asset gathering related powers.
Liontrust Investment Partners LLP Partnership Management
Committee (“LIPPM”)
Areas of oversight
Fund management, dealing, trading systems, research tools
(including
investment
fund management data services),
operations, risk management (including portfolio risk), and
investment processes (including performance of the process,
outlook, amendments or enhancements to the investment
processes and new instruments within funds).
Partnership Management Committee Meetings are held
regularly over the course of a financial year.
The management committees each have several sub-committees
that have been delegated oversight of specific areas and report
on these areas to the respective management committee. The sub-
committees have been established to help govern and manage the
business and assist with the effective oversight of the implementation
of the Group’s strategy for the benefit of its stakeholders.
Board and Management committees and sub-committees
Liontrust Asset Management Plc
Main Board
Liontrust Cares
Diversity and Inclusion
Committee
Health and Safety
Committee
Workforce Advisory
Forum
Partnership Management Committees of the FCA regulated entities
Nomination Committee
Liontrust Fund
Partners LLP
(FRN: 518165)
Liontrust Investment
Partners LLP
(FRN: 518552)
Remuneration
Committee
Audit and risk
Committee
LFP sub-committees
Joint sub-committees
LIP sub-committees
Treating Customers Fairly
Committee
Portfolio Risk Committee
Fund Management Committee
Distribution and Products
Committee
Financial Crime Prevention
Committee
Responsible Capitalism Committee
Client Assets Committee
Technology Committee
Operations and Outsource
Oversight Committee
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LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
GOVERNANCE Sub-committees & Other Committees
Overview
Client Assets Committee
This Committee is responsible for overseeing client money and reviewing how assets are held by the
Group and its outsourced providers. The Committee monitors the identifying of client assets, control
and procedures in place for handling assets and overseeing any associated risks.
Distribution & Product Committee
This Committee is responsible for distribution, marketing, and product strategy for the Group,
alongside product development, reviews and approvals.
Diversity & Inclusion Committee
Financial Crime Prevention Committee
This Committee is responsible for the implementation of diversity focus and inclusion – related
initiatives, across a broad range of topics, including mental health throughout the Group. The
Committee works to promote inclusivity, tolerance and an open and accessible environment for all
employees and partners within the Group.
This Committee is responsible for the management and oversight of all matters relating to the
prevention of financial crime for the Group, alongside overseeing any financial crime related risk
assessment for the Group.
Fund Management Committee
This Committee is responsible for ensuring fund management teams receive updates from Trading,
Operations, Risk and Compliance on all matters relating to change, governance and regulatory
issues impacting the Group.
Health & Safety Committee
This Committee is responsible for all Health and Safety matters for the Group including the Health
and Safety Policy Statement, Risk Assessments, First Aid requirements, Fire Safety and emergency
procedures amongst others.
Oversight & Governance of Third-Party
Services
This Committee is responsible for the oversight of all outsourced functions provided by third parties,
including those undertaken by BNYM.
Portfolio Risk Committee
This Committee is responsible for monitoring and overseeing risk and portfolio performance within
the Group. The Committee establishes the Group‘s approach to risk management through the
implementation of the Risk Management Process, including overseeing risk limits and controls.
Responsible Capitalism Committee
This Committee is responsible for advising the Group on all matters relating to ESG integration,
sustainability, stewardship and ensuring responsible capitalism is interwoven into the Group’s
strategy.
Technology Committee
This Committee is responsible for monitoring and oversight of Technology and Cyber Security across
the Group along with ensuring the systems employed within the Group are fit for purpose.
Treating Customers Fairly Committee *
This Committee agrees and monitors the Group’s approach to clients and how the Group’s
responsibilities are discharged. The Committee reviews the suitability of products and monitors
customer outcomes. The Committee remains focused on delivering the six outcomes identified by
the regulator.
Workforce Advisory Forum **
This forum discusses all matters impacting the workforce of the Group. A two-way information sharing
on matters of workforce importance which may include engagement, appropriate strategies for the
recognition and development of a diverse workforce and development opportunities for colleagues.
*This Committee will be reformatted to meet the upcoming Consumer Duty regulation implementation. From 31 July 2023, this
Committee will become the Consumer & Conduct Committee responsible for oversight of Consumer Duty requirements for the Group.
**The Board and management committees place significant focus on engagement with the workforce and embedding culture
within the Group, as such, Mandy Donald is the designated Board member for the workforce engagement.
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LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023GOVERNANCE CORPORATE GOVERNANCE
COMPLIANCE WITH THE UK CORPORATE
GOVERNANCE CODE
The Board recognises the key value of good corporate
governance in ensuring the long-term sustainable success
of the Company, generating value for shareholders and
contributing to wider society. Good corporate governance is
critical to the successful management of a sustainable business.
The Company is committed to the principles of corporate
governance contained in the UK Corporate Governance
Code (2018) (the “Code”) and applies them as appropriate
to the Company.
A review of the Company’s compliance with the Code has
been carried out and the Company has applied the principles
of the Code and complied with the provisions of the Code,
except as detailed below.
Further information on how the Company has applied the
principles of the Code is set out in this Corporate Governance
report and details of the cross referenced sections are set out
below.
Board Leadership and Company Purpose
Annual Report Reference
Provides shareholders with information on the Board, an overview of the work undertaken by the Board to
See pages 86
promote the long-term sustainable success of the Company and how the Board has considered stakeholders
interests
Division of Responsibilities
Provides shareholders with information on the division of responsibilities between members of the Board and
See page 86
the committees of the Board and details the effective operation of the Board
Composition, Succession and Evaluation
Provides an overview of the Board composition, the work of the Nomination Committee which includes
See page 78 and the
succession planning and details of the Board evaluation process
Audit, Risk and Internal Control
Nomination Committee
Report on page 103
Provides a report from the Audit and Risk Committee on the work undertaken during the year to oversee the
See the Audit and Risk
Company’s external audit and internal audit, the integrity of the financial statements, risk management oversight
Committee Report on
and review of the risks that the Company is willing to take to achieve its long-term strategic objectives
page 108
Risk management and
internal controls page 83
Principal risks on page 46
Remuneration
Provides a report from the Remuneration Committee on decisions made by the Remuneration Committee and
See the Remuneration
the oversight of the Group’s remuneration practices to ensure that they are linked with the successful and
Committee Report on
sustainable delivery of the Company’s long-term strategy
page 112
THE BOARD
The Company is led by an effective and entrepreneurial board
whose role is to promote the long-term sustainable success of
the company, generate value for shareholders and contribute
to wider society. The Board is responsible for organising and
directing the affairs of the Company and the Group in a
manner that is in the best interests of the shareholders, meets
legal and regulatory requirements and is also consistent with
good corporate governance practices.
Details of the Board’s consideration of its stakeholders are set
out in the Section 172 Statement on page 91.
Division of responsibilities
The division of responsibilities between the Chair, Alastair
Barbour, Senior Independent Director, Rebecca Shelley, and the
Chief Executive, John Ions, are clearly established by way of
written role statements, which have been approved by the Board.
The Chair’s main responsibilities are to lead the Board, ensure
that shareholders are adequately informed with respect to the
Company’s affairs and that there are constructive relations
and communication channels between management, the
Board and shareholders. The Chair liaises as necessary with
the Chief Executive on developments and ensures that the
Chief Executive and his executive management team have
appropriate objectives and that their performance against
those objectives is reviewed. The Chair holds meetings with
the Non-executive Directors without the Executive Directors
present on a regular basis.
The Chief Executive’s main responsibilities are the executive
management of the Group, liaison with the Board and
86
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
GOVERNANCE
shareholders, the development and management of the strategy
of the Group, the management of the senior management
team, oversight of the sales and marketing teams, and to be
an innovator and facilitator of change. The Chief Executive
discharges certain of his responsibilities in relation to the
executive management of the Group via two partnership
management committees as detailed in the Risk management
and internal controls report on page 83.
The Senior Independent Director’s main responsibilities are to
provide a sounding board to the Chair, lead discussions related
to the succession of the Chair and serve as an intermediary for
the other directors and shareholders.
The Non-executive Directors role has the following key
elements:
• constructively challenging, and contributing
the
development of the strategy of the Company and the Group;
to,
• providing well considered and constructive opinions and
specialist advice to the Board based on significant industry
experience;
• scrutinising the executive management team’s performance
in meeting agreed goals and objectives, and monitoring the
reporting of performance of the Board;
• satisfying themselves that financial information is accurate
and that financial controls and risk management systems are
robust and defensible; and
• being responsible for determining appropriate levels of
remuneration for executive directors and a prime role
in appointing (and where necessary removing) senior
management and in succession planning.
Committees
The Board has established an Audit and Risk Committee,
Nomination Committee and Remuneration Committee. The
composition of these committees complies with the provisions
of the Code.
The Chair is not a member of the Audit and Risk Committee or
the Remuneration Committee, but attends these meetings at the
invitation of the chair of the respective committee.
Each committee of the Board has formally documented the
duties and responsibilities delegated to it, by way of terms of
reference, which are available on the Company’s website.
Board Composition
As at 31 March 2023, the Board comprised six directors:
the Chair, three independent Non-executive Directors and
two Executive Directors. As previously announced, two
independent Non-executive Directors, Quintin Price and Emma
Howard Boyd resigned from the Board on 23 March 2023.
At all times throughout the relevant reporting period, at least
half of the Board, excluding the Chair, comprised independent
Non-executive Directors.
Diversity and inclusion have continued to be a key focus for
the Board and Company. While the Board complies with the
Hampton-Alexander Review target of 33 per cent. female
representation on the Board, it no longer complies with the
FCA’s gender representation target of 40 per cent. female
representation on the Board following the resignation of Emma
Howard Boyd. Further details of succession planning and
recruitment are provided in the Nomination Committee Report,
where it is noted that diversity will be considered in future Board
appointments to address this. The Company complies with the
recommendations of the Parker Review and with the remaining
two of the FCA’s diversity targets with Rebecca Shelley serving
as Senior Independent Director and Vinay Abrol serving as
Chief Financial Officer & Chief Operating Officer.
The Board has determined that the balance achieved
between the Executive Directors and Non-executive Directors
is appropriate and effective for the control and direction of
the business. The Non-executive Directors continue to bring
objectivity, constructive challenge and independent oversight
to the Board and complement the Executive Directors’ skills,
experience and detailed knowledge of the business.
No individual or group of individuals dominates the Board or
its decision making.
George Yeandle, Rebecca Shelley and Mandy Donald have
been determined by the Board to be independent. In making
such determination, the Board found each Non-executive
Director to be independent in both character and judgment.
There are no relationships or circumstances which are likely
to affect or appear to affect the independence of these Non-
executive Directors. The Board has considered the length of
service of each of these Non-executive Directors. Accordingly,
the Board considers these Non-executive Directors to be
independent.
In line with best practice set out in the Code, the Board
requires that all Directors retire and offer themselves for re-
election annually at the Company’s Annual General Meeting.
The skills, competencies and experience of each Director is set
out on page 78 in support of each Directors re-election.
Operation of the Board
The Board meets on a scheduled basis six times per annum
and on an ad-hoc basis to consider specific items of business
as the need arises.
At each scheduled Board meeting, a report from the Chief
Executive, John Ions, and Chief Financial Officer and Chief
Operating Officer, Vinay Abrol, are tabled for discussion. The
Chair of each Board Committee reports on its activities since
the last Board meeting.
The Chair, the Executive Directors and Company Secretary
liaise sufficiently in advance of each meeting to finalise the
agenda. A comprehensive set of papers are circulated before
Board and Committee meetings.
87
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023GOVERNANCE The Board has a formal schedule of matters reserved for its decision which it has reviewed and approved in the past year.
Examples of these matters include the approval of the Group’s strategy, acquisitions and disposals, approval of half-year and full
year financial statements, approval of major capital contracts, property leases, appointments to the Board and the oversight of
corporate governance matters.
Board & Committee Attendance
During the year, the Board held 9 Board meetings, which include both scheduled and ad-hoc meetings to approve specific
transactions, as well as meetings to approve the Company’s full and half year results. Board and Committee Member attendance
at meetings is set out below:
Board (including
ad–hoc)
Audit & Risk
Remuneration
Nomination
Meetings held in the year
Directors throughout the year
(Committee membership shown in brackets)
Alastair Barbour
(Nomination)
Rebecca Shelley
(ARC, Nomination, Remuneration)
Mandy Donald
(Remuneration from 1st January 2023,
ARC, Nomination)
George Yeandle
(ARC from 23rd March 2023, Nomination, Remuneration)
Vinay Abrol
(No Committees)
John Ions
(No Committees)
Directors for part of the year
Emma Howard Boyd
(until 23rd March 2023: ARC, Nomination, Remuneration)
Quintin Price
(until 23rd March 2023: ARC, Nomination, Remuneration)
9
9/9
9/9
9/9
9/9
9/9
9/9
7/8
8/8
6
–
6/6
6/6
1/1
–
–
5/5
5/5
9
–
9/9
2/2
9/9
–
–
7/8
8/8
6
5/6
6/6
6/6
6/6
–
–
6/6
6/6
Alastair Barbour recused himself from one Nomination
Committee meeting due to a conflict of interest as the topic of
discussion related to his tenure. Alastair Barbour was updated
on the outcome of the discussion after the meeting.
Prior to resigning, Emma Howard Boyd was unable to attend
one Board and one Remuneration meeting due to a diary
clash. Emma Howard Boyd was updated on the outcomes
following the meetings.
Where a Board or Committee Member was unable to attend a
meeting, they were provided with the meeting materials, given
the opportunity to raise questions to be tabled at the meeting
(if appropriate) and were briefed on the discussions held,
actions assigned and outcomes following the meeting.
Directors may attend a Committee meeting for information
purposes at the invitation of the Chair of that Committee. They
are not part of the deliberations or decisions of that Committee.
Where a Director attends a Committee of which they are not
a member, this has been excluded from this analysis. Executive
Directors attend Committee meetings at the invitation of
the Chair of the Committee and when required if they are
presenting matters for the Committee to consider.
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LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
GOVERNANCE Resources
The Company Secretary advises the Board on all governance
matters. All Directors have access to the Company Secretary’s
service and advice. The appointment and removal of the
Company secretary is determined by the Board.
Directors may take additional independent professional advice
at the Group’s expense in furtherance of their duties.
Commitment
The Board requires all Directors to devote sufficient time to their
duties and to use their best endeavours to attend meetings.
The Board reviews the policies, processes, information, time
and resources it needs in order to function effectively and
efficiently and confirms all Board members have had sufficient
time to meet their board responsibilities and that they are able
to provide constructive challenge, strategic guidance and
oversight of management.
Where an ad hoc meeting is called on short notice, it may
not be possible for all Directors to attend this meeting. In these
circumstances, papers are circulated to all Directors, the views
of the Director are sought in advance of the meeting and a
report provided to the Director after the meeting. Meeting
times are set to maximum attendance.
Neither of the Executive Directors are on the board of a FTSE
100 company.
The Non-executive Directors have disclosed to the Company
Secretary their significant commitments other than their
directorship of the Company and have confirmed that they
are able to meet their respective obligations to the Company.
The appointment process for Non-executive Directors is led by
the Nomination Committee and considers other demands on
Directors’ time. Additional external appointments are required
to be approved in advance by the Nomination Committee.
The Nomination Committee Report contains further details in
respect of the time commitments of the Non-executive Directors.
Culture
The Board is responsible for setting the purpose, values and
strategy of the Company and for ensuring that these are
aligned with the Group’s culture. The Board strives to ensure
that the Company’s culture promotes integrity and openness,
values diversity and is responsive to the views of shareholders
and stakeholders. The Directors act with integrity and lead by
example, setting high standards to promote the desired culture
across the Group.
The Board assesses and monitors culture regularly through
the reports received from senior management, the HR reports
received and discussed at the Nomination Committee,
Compliance reports received by the Audit and Risk Committee
and through the work of the internal auditors. The Board and
Nomination Committee considered the results of the workforce
engagement survey and a review of conduct and culture was
undertaken by the internal auditors. Compliance training is
provided on the FCA’s conduct rules and annual certification
is undertaken for all certified staff and senior managers in
accordance with SM&CR, which includes a fitness and
propriety assessment. A report from the Chief Compliance
Officer is provided to the Remuneration Committee to ensure
that conduct is considered as part of the reward assessment
process. The Board seeks assurance from the Executive
Directors and senior management that conduct matters are
appropriately dealt with and escalated if necessary.
Conflicts of interest
Directors are aware that they have to inform the Board of any
conflict of interest they might have in respect of any item of
business and absent themselves from consideration of any such
matter. The Group has in place a conflicts of interest policy
which has been approved by the Board.
Performance Evaluation
The Board conducts a formal review and rigorous evaluation of
its own performance and that of its committees. The evaluation
process is constructively used to improve Board effectiveness,
maximise strengths and address any weaknesses. For the
year to 31 March 2023 the evaluation process is has been
undertaken by an independent external consultant, Constal
Limited and is discussed in the Nomination Committee Report.
The Executive Directors have been subject to a formal
performance appraisal. These appraisals were carried out in
2023 and in all cases their performance was appraised as
continuously effective. The performance of the Non-executive
Directors during the year to 31 March 2023 has been reviewed
by the Chair. The review has confirmed that the performance of
the Non-executive Directors is effective and appropriate.
Further details are provided in the Nomination Committee
Report.
89
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023GOVERNANCE Professional development and training
Every Director is entitled to receive appropriate training and
guidance on their duties and responsibilities. Continuing
professional development is offered to all Directors and the
Board is given guidance and training on new developments,
such as new regulatory requirements.
In order to promote awareness and understanding of the
Group’s operations, the Chair ensures there are additional
opportunities for the Non-executive Directors to meet with
senior management outside of the Board and its Committees.
2022 AGM vote
At the Company’s Annual General Meeting held on 22
September 2022, the resolution to approve the Directors’
Remuneration Report received 53.43% of votes cast and
the resolution to approve that general meetings (other than
the AGM) be called on not less than 14 clear days’ notice
received 73.5% of the votes cast.
The Company provided a detailed explanation of the steps it
had taken to understand the views of its shareholders on the
Directors’ Remuneration Policy and the impact of that feedback
on the decisions taken by the Remuneration Committee in its
announcement dated 22 September 2022. It provided a
further update to shareholders in March 2023. The resolution
to approve that general meetings (other than the AGM) be
called on not less than 14 clear days’ notice was a special
resolution and was therefore not carried.
The Remuneration Committee has considered shareholder
feedback when determining the remuneration outcomes for the
Executive Directors this year. It has balanced risk and reward
and considered our shareholder experience over the past
year when determining remuneration outcomes to ensure that
our remuneration structures drive outstanding value creation,
reward exceptional corporate performance over the short and
long term and are linked to the delivery of the Company’s
long-term strategy. Further detail of this can be found in the
Directors’ Remuneration Report on pages 112 to 140.
The Company has confirmed that it would not use a short notice
period to call a general meeting to consider a remuneration
policy in the future. The Company reiterates this and confirms
that if this authority is approved in the future, short notice will
not be used to call a general meeting where approval of a
remuneration policy is sought.
Explanation of non-compliance with the Code
Provision 19 of the Code sets out that the Chair should not
remain in post beyond nine years from the date of their first
appointment to the Board except in limited circumstances. The
tenure of the Chair exceeds this recommended period. The
Nomination Committee Report provides a detailed explanation
for this departure from the Code and of the succession planning
steps that will be taken to bring about effective succession and
ensure the development of a diverse Board.
Shareholder engagement
The Chief Executive and Chief Operating Officer and
Chief Financial Officer have regular meetings with existing
and potential new shareholders. The Chair and/or Senior
Independent Director may meet with shareholders at their
request.
Each year, in advance of the Company’s AGM, we the
Company engages with our key shareholders to seek their
voting intentions and to offer further engagement with our
Executive and Non-executive Directors. In addition, we the
Company further engages with the major proxy advisor
organisations in order to ensure their voting recommendations
are fair and reasonable and take full account of the published
information available to them through our the Company’s
published financial report and accounts and our website.
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LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
GOVERNANCE
SECTION 172 REPORT
Introduction
Section 172(1) of the Companies Act 2006 requires the
Company to articulate how the Directors, acting in good
faith, aim to promote the success of the Company for the
benefit of its members as a whole, and in doing so have
regard to the likely consequences of a decision in the long
term and the interest of its stakeholders. Liontrust has sought
to build closely aligned and trusted relationships with its
shareholders, to act responsibly, openly and successfully
when managing investments for its clients, to be known as
a good employer, to engage justly with suppliers and to
take account of its wider responsibilities for the community
and environment. Whilst the publication of a Section 172
Statement is a statutory requirement, the Board believes that
maintaining a reputation for high standards in these areas
should naturally be embedded in the culture and business
practices of a reputable investment management business,
and that seeking a measured balance between the interests
of all members is more likely to promote the long term success
of the business as a whole than the over prioritisation of
the interests of any one party. The Board’s decision making
process considers both risk and reward in the pursuit of
delivering the long term success of the Company and the
interests of the Company’s stakeholders. The Board engages
with stakeholders through a combination of information
provided to it by management and direct engagement with
stakeholders where appropriate.
The Strategic Report from pages 12 to 76 sets out in depth
our strategy, our principal strategic objectives and our
values, whilst describing some of the actions, initiatives and
contributions made by different parts of the firm; together
setting out how these interact for the benefit of our significant
stakeholders. The following provides engagement outcomes
and insight into some of the initiatives undertaken and
engagement activity with significant stakeholders during the
year.
Shareholders
Shareholder interaction facilitates the
discussion of strategic developments and
to understand shareholder views on the
performance of the Group against its
strategic objectives.
The Executive Directors routinely attend meetings with major shareholders, including
roadshows following the annual and half year results announcements. The Chair also
routinely meets major shareholders, either alongside the Executive Directors or without their
attendance to enable more direct feedback. Other Board members interact with shareholders
through general meetings or on ad hoc matters, such as the engagement by the Chair of the
Remuneration Committee on remuneration matters throughout this year. The Board routinely
receives and reviews reports summarising shareholder interaction and feedback thereon.
During the year the Executive Directors hosted or attended meetings with over fifty shareholder
groups, estimated to represent a significant majority of our shareholder base. In September
2022 the Company’s AGM was open for all institutional and individual shareholders to
attend in person providing opportunity for direct interaction between shareholders, the Board
and other Liontrust senior managers. The 2023 AGM is to be held in London in September
2023 as detailed on page 101.
Liontrust seeks to keep shareholders appraised of corporate developments through its public
website via a combination of published shareholder information, trading updates, results
presentations and other RNS announcements. Shareholder engagement is also undertaken
on behalf of the Group by its appointed corporate brokers, whilst research published by a
number of other brokers, with whom the CFO/COO frequently liaises, provides additional
coverage. Additionally, each year we engage an investor relations company to liaise with key
shareholders to seek their voting intentions ahead of the AGM and to offer further engagement
with our Executive and Non-executive Directors, whilst we engage directly with the major
proxy advisor organisations in order to ensure their voting recommendations are based on
accurate, fair and reasonable information. The Company demonstrated the importance
placed upon shareholder engagement following the outcome of the February 2022 General
Meeting. Several amendments were made to the Directors Remuneration Report following
engagement by the Remuneration Committee Chair with many of the Company’s larger
shareholders. Direct engagement with shareholders and gaining a greater understanding of
their views in relation to the report allowed the Company to make appropriate amendments,
incorporating feedback received.
91
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023GOVERNANCE Clients
Our clients are the investors in Liontrust
funds, the entities for whom we manage
segregated investment mandates and the
industry professionals that utilise our model
portfolio service; together the overwhelming
source of Group revenues.
All Liontrust investment strategies have clearly defined objectives, and our reporting thereon is
transparent and regular through our public website, dedicated client web portals and data venues
deemed to be appropriate to our clients.
We pride ourselves on the quality and the longevity of our relationships across the breadth of
our client base. Trust, built over time through our client interactions, is the cornerstone of these
relationships. We seek to validate the trust our clients have placed in us by always behaving
fairly, honestly and with transparency. Each year we undertake three types of surveys and market
research with professional intermediaries, clients and retail investors. These include near monthly
surveys on the Liontrust brand and marketing content. semi-annual research on investors’ viewpoints
on various topic including Liontrust services, and annual research on whether Liontrust is providing
value for money, with outcomes shared with clients through the annual Assessment of Value Report,
which is available on the Liontrust website.
The Liontrust sales team is highly active, maintaining direct relationships with professional clients
and the advisors of retail investors, with thousands of interactions each year. Engagement is
through routine and ad hoc meetings, video and audio calls, as well as presentations at industry
conferences and our own investor events. Sales team specialisms, which cover multi asset, single
investment strategies and sustainability, include individuals with dedicated institutional and specific
geographical areas of focus in the UK and continental Europe.
During the year fund managers presented to professional investors at approximately 50 large
scale events attended by over 1,500 investors and advisors. Such events include Liontrust specific
presentations, industry-wide seminars and client specific conferences. As part of its autumn 2022
and spring 2023 World Market Review series, the Liontrust Multi-Asset team has hosted presentations
in over 50 towns and cities throughout the UK, as well as participating at partner events hosted by
large distributors. Collectively over 700 investment advisors attended these events.
An important element to our client engagement is via digital media, available via our website
and other platforms. Our podcasts and webinars have each received over 2,000 viewers and
listeners, whilst our investment videos have been watched over 500,000 times. The website has
a dedicated webpage in relation to educational content which is routinely expanded. The Liontrust
webpage is available for personal investors when they visit the website and for distributors to use
with their clients. The Liontrust website has separate customer journeys for different users, including
one for professional advisers based in the UK and another for personal investors. A review of
the wording across the personal investor website and the accessibility to information has been
completed with a view on the client experience. Changes to content especially around the risks
and benefits of Liontrust funds (such as the recommendation to invest for at least five years, and the
fact they do not have exit fees and can be redeemed at any time) have also been implemented.
92
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
GOVERNANCE Members and Employees
The Board recognises the importance of
ensuring the Group attracts and retains
an engaged, committed and talented
workforce.
The Board seeks to continually inform and
engage with members and employees and
is committed to their ongoing training and
development.
Mandy Donald has been designated as the non-executive director responsible for overseeing
employee and member engagement and throughout the year attends committees and forums
established to support employees and members. Mandy Donald and Rebecca Shelley also held
a series of senior women events to promote, support and develop the talent of women working
at Liontrust
We seek two-way engagement throughout the firm; structured between the Board and line
managers through Board sub-committees and between line managers and their reports through
routine team meetings and performance appraisals. More so, as a firm of our size and few office
locations, there is natural interaction between colleagues across department and levels of seniority,
which is encouraged and supported by the Board through a programme of ‘lunch and learn’
events, aimed at developing collaboration across departments. We aim for a positive working
experience with remote working enabling a considered work-life balance, family friendly policies,
training & development plans and providing support for physical and mental wellbeing. A monthly
financial wellbeing allowance was introduced to all in July 2022.
The Directors have overseen and supported the Company’s actions in maintaining a talented
workforce, including the development of a Senior Leadership programme to enhance current
skills, ensure future ‘bench strength’ and engender commitment through common purpose and
values. The Board understands the importance of ensuring employees feel part of the success
and development of the Group. We routinely encourage the provision of feedback through staff
surveys. Firmwide surveys were undertaken this year on diversity & inclusion and the workplace
environment, as well as the annual workforce engagement survey (as further detailed on page
64). The annual survey was overseen in collaboration with the internal audit function as part
of a culture review for the Board. The Remuneration Committee has increased its focus on the
Executive management team remuneration metrics including components linked to diversity &
inclusion within the Company and ensure appropriate targets are set accordingly. The Nomination
Committee receives information at every meeting in relation to recruitment, retention, promotion
and talent development of employees and members within the Company with a focus on
increasing diversity & inclusion.
It has been a particularly active year for the Diversity & Inclusion Committee, which continues to
deliver its action plan to support more inclusive and diverse working practices. Initiatives during
the year, in addition to the firmwide D&I survey mentioned above have included championing
Women at Work through women’s networking events and International Women’s Day, supporting
LGBTQ+ PRIDE month in June 2022 and Black History month in October 2022. Firmwide training
sessions were delivered on Unconscious Bias, Allyship, Micro Aggressions, Autism Awareness and
Psychological Safety alongside an increased focus on mental health with the planned introduction
of ‘mental health first aiders’ to ensure employees and members have the support they need and
access to professional services, if required.
In 2020 Liontrust established a Workforce Advisory Committee to advise management of issues
relating to the workforce. This year this has been reconfigured as a Workforce Forum. These
forums, which have sought representation across departments and locations met a number of
times during the financial year. A particular focus in 2023 has been in liaising between senior
management and sectors of the business to communicate the annual workforce engagement survey
and to help more fully understand its results and desired actions thereon.
The Liontrust Social Committee continues to arrange events that provide opportunities for
colleagues across the firm to engage. Three firmwide social events were held in London, as well
as localised events in Edinburgh and Luxembourg. In addition, the committee arranges regular
engagement in areas of interest outside work, such as a book club, sports participation and other
interest events. During the year a charitable giving policy was introduced, assisting the workforce
through time off and financial matching to personally support charities and community-led
organisations that have a positive impact on the issues that matter most to us. Further details of the
Liontrust Community Engagement programme are detailed In the Wider Society section below.
93
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023GOVERNANCE Service providers, including those that provide outsourced functions
The provision of high-quality services to us
by our key suppliers is integral in enabling
us to deliver our services to our clients.
We seek to conduct ourselves justly and
to maintain a reputation as a trusted and
reliable partner.
Regulators and industry bodies
Constructive engagement with our
regulators helps to ensure a fair financial
framework for our business and our clients.
The Group is committed to procuring work and services from suppliers in an ethically, sustainable
and environmentally sensitive way and seeks to ensure that suppliers follow similar practices. The
Group encourages competition amongst suppliers whilst purchasing is undertaken in a reasonable
and objective manner. We seek to pay our suppliers promptly and if in dispute, to engage openly
to ensure fair resolution in a timely manner.
The day-to-day responsibility of managing supplier relationships sits with the head of each business
area; for example, the trading team engages with brokers, the IT team engages with network
and communication suppliers and the operations team engages with fund governance and
administration providers, fund platforms and other areas of our operational investment infrastructure
delivery. Heads of department communicate the effectiveness or otherwise of external service
partners to the Board, either directly or via appropriate Board sub-committees.
Liontrust has in place a contract management system that integrates due diligence for appropriate
standards on Modern Slavery in our contract approval procedures. We periodically seek
evidential confirmation from our key outsource providers and service providers that they also
follow a policy of zero tolerance of slavery or human trafficking. All Liontrust staff are required to
undertake mandatory training. No breaches were identified in the year.
In recent years the Company has appointed a single fund administrator, the Bank of New York
Mellon (“BNYM”), with whom the Compliance and Operations teams have naturally frequent
interaction. BNYM has established a Client Advisory Board as a body to liaise with its key clients;
our CFO/COO serves as a member on this body.
Our core activities are undertaken by group entities that are authorised and regulated by the
Financial Conduct Authority (“FCA”). We also undertake activities under the jurisdiction of
other regulators or state authorities, including the Central Bank of Ireland, the Commission de
Surveillance du Secteur Financier (Luxembourg) and the Securities and Exchange Commission
(USA) and the Information Commissioner’s Office (UK) with regards our obligations under data
protection. We are aware of and abide by the rules as applicable to our activities in each
territory, and ensure our engagement is appropriately open, timely and transparent.
We engage directly with our regulators through periodic mandatory reporting and on an ad hoc
basis in response to broader FCA consultations or as warranted by regulatory change or events.
During the financial year we participated in an industry thematic review in which Liontrust were
one of a number of firms invited to contribute. The FCA uses thematic reviews to help assess
current or emerging risks across a sector or market.
We also engage indirectly with regulators via a number of routes, such as:
• the management companies of our Irish investment funds
• external regulatory audit processes such as CASS audit reporting in the UK and Long-form
reporting in Luxembourg.
• active participation through our trade body, the Investment Association, including Liontrust
representation on over fifteen IA led committees, working groups and discussion forums.
The Board and Audit Committee receives periodic reports from the Compliance and Risk departments,
detailing our risk management framework, our regulatory processes and our periodic engagement with
regulators, with further review and reporting undertaken by our Internal Audit function.
The focus by the Company of being the guardian of client assets is paramount, as demonstrated
by the effective and transparent implementation of the FCA’s Consumer Duty regulation. The Board
has received regular updates through the planning and implementation stages, whilst Mandy
Donald acts as our Consumer Duty Champion. In the coming months we shall be establishing
a Consumer & Conduct Committee which will replace the existing Treating Customer Fairly
Committee, with the new committee being structured around the four Consumer Duty outcomes;
cross-cutting rules, culture, conduct and competence. We have recently undertaken distributor &
manufacturer due diligence to further ensure the continuation of good consumer outcomes. Further
details, including actions taken to enhance our client proposition, are set out in the Liontrust
Responsible Capitalism 2023 Report and via the Liontrust Consumer Duty dedicated webpage on
the Liontrust website.
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LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
GOVERNANCE Wider society
As an asset manager, we have two main
scopes of activity: our investment activity
and our own business operations.
In our investment activity we aim to uphold the values of human rights, encourage positive labour
practices, promote sustainable environmental impacts, and support corporate behaviour that
ensures the wellbeing of each business and its wider stakeholders. We aim to help our clients
achieve their financial goals by producing a return on their investment, offering a range of funds,
including many with specific sustainability-related objectives which enable investors to invest in
funds that direct capital to companies helping to solve global problems. We have committed
to integrating ESG considerations throughout our fund range, with each fund management
team taking its own approach to incorporating these factors into their investment processes and
engaging with the managers of investment holdings on areas the managers deem material.
We are a signatory to the PRI, a UN supported network of investors which works to promote
responsible investment through the incorporation of environmental, social and governance (ESG)
factors into investment decision-making. Liontrust is also a signatory of IIGCC and the Stewardship
Code, supporters of the Net Zero Asset Managers Initiative, TCFD and Climate Action 100+.
The Board supports the Company’s commitment in striving for carbon neutrality across the business
and in our portfolios by 2050. Our ESG aims, integration processes, engagement outcomes and
proxy voting records are set out in detail within the Responsible Capitalism section of our website.
Just as we expect our investee companies to think critically about their ESG risks and opportunities,
we do this with our own business too: by turning the lens on ourselves, we aim to operate
in a way that is sustainable and supports our local community and wider society. Liontrust is
operationally carbon neutral, offsetting our Scope 1 and 2 market-based emissions (our direct
emissions and the indirect emissions arising from the generation of purchased energy) by
supporting projects to provide clean water access for families in Laos and solar cooking for
refugee families in Chad. We are committed to supporting the goal of net zero greenhouse
gas emissions by 2050 or sooner in line with global efforts to limit warming to 1.5C in Scope
3 emissions (including all indirect emissions occurring in the value chain). We actively work
with our industry associations to provide expertise and time to help others understand ESG and
Sustainability as it relates to investments, the finance industry and to society. We are helping
groups in our sector’s value chain to discover ways of lowering their footprint; two notable
examples including:
• Net Zero Financial Advisers Protocol – we are working with Net Zero Now to fund and create
the Net Zero Financial Advisors Protocol. Its goal is to support financial advisers in their efforts
to measure, reduce and compensate for carbon emissions in an effort to reach net zero, setting
an industry standard against which efforts can be assessed and certified.
• Sustainable Trading – we are a founding member of Sustainable Trading (founded in
2022); a group dedicated to devising practical solutions to ESG issues of trading, such as
the environmental impact of builds, maintains, and operates financial trading infrastructure,
along with social issues such as diversity, equality and inclusion, employee wellbeing, and
engagement with communities.
Our Responsible Capitalism report, which summarises our approach as an investor and as a
Company, is updated each calendar year and published on our website.
We seek to contribute to societal positive outcomes through the Liontrust Community Engagement
programme. This has had three key objectives: raising financial awareness and numeracy
throughout society, providing opportunities for young people and wildlife conservation. Support
has been given over a number of years through our work with Newcastle United Foundation,
10ticks, ZSL London Zoo, Tusk and The Purpose Coalition on a Levelling Up Impact report.
Looking forward, in early 2023 the Board approved the establishment and multi-year funding of
the Liontrust Foundation, a registered charity further aiming to empower disadvantaged young
children and to advance the preservation of biodiversity.
Liontrust embraces routes into the industry for individuals from different backgrounds including
though continued support of Investment 20/20. Three individuals have joined Liontrust through
Investment 20/20 this financial year, whilst all four Investment 20/20 joiners in the previous year
have since become permanent employees.
95
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023GOVERNANCE 96
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
GOVERNANCE DIRECTORS’ REPORT
The Directors present their report and the audited consolidated financial statements of Liontrust Asset Management PLC for the
year ended 31 March 2023.
Principal activities
The Company’s principal activity is to act as a holding company for a group of investment management companies. The
Company’s shares are quoted on the Official List of the London Stock Exchange. The Company is domiciled in the UK and is
incorporated in England and Wales. The Group operates principally in the United Kingdom with an international operating
subsidiary in Luxembourg.
It has four operating subsidiaries as follows:
Subsidiary name
Liontrust Fund Partners LLP
% owned by
the Company
100%
Liontrust Investment Partners LLP
100%
Liontrust International (Luxembourg) S.A.
Liontrust Portfolio Management Limited
100%
100%
Subsidiary principal activities
A financial services organisation managing unit trusts and is the authorised
corporate director for Liontrust’s UK domiciled funds. It is authorised and
regulated by the Financial Conduct Authority.
A financial services organisation offering investment management services
to professional investors directly, through investment consultants and through
other professional advisers, which is authorised and regulated by the Financial
Conduct Authority. Liontrust Investment Partners LLP is also approved as an
Investment Manager by the Central Bank of Ireland and is an SEC Register
Adviser.
A distribution business authorised and regulated by the CSSF in Luxembourg
A financial services organisation offering investment management services to
professional investors directly, through investment consultants and through other
professional advisers. It is authorised and regulated by the Financial Conduct
Authority and is an SEC Register Adviser. Formerly Majedie Asset Management
acquired on 1 April 2022, and transferred it’s activities to other group entities
with effect from 1 October 2022.
In addition to the principal operating subsidiaries listed
above, the Company has the following other 100% owned
subsidiaries:
• Liontrust Investment Funds Limited and Liontrust Investment
Services Limited which act as the corporate member in
Liontrust Fund Partners LLP and Liontrust Investment Partners
LLP respectively
• Liontrust Investment Management Limited, acquired pursuant
to the acquisition of Neptune Investment Management
Limited in October 2019
• Liontrust Advisory Services Limited and Liontrust Multi–Asset
Limited, acquired as part of the acquisition of the Architas
business and are currently being liquidated
The Directors declare a second interim dividend of 50 pence
per share (2022: 50 pence per share). This results in total
dividends of 72 pence per share for the financial year ending
31 March 2023 (2022: 72 pence per share).
REVIEW OF THE BUSINESS AND FUTURE DEVELOPMENTS
A review of the business and future developments is set out in
the Chair’s statement, Chief Executive’s report and Strategic
Report on 12 to 74.
DIRECTORS
The Directors of the Company during the year and up to
the date of the signing of the financial statements were as
follows. Their interests in the share capital of the Company
at 31 March 2023 are set out in the Remuneration report on
page 129.
RESULTS AND DIVIDENDS
Profit before tax was £49.3 million (2022: £79.3 million).
Adjusted profit before tax was £87.1 million (2022: £96.6
million) after adding back expenses including, severance
compensation and related legal costs, acquisitions related
(restructuring, acquisition
costs, professional
related and other) and intangible asset amortisation, and
is reconciled to profit before tax in note 7 to the financial
statements.
services
Vinay Abrol
Alastair Barbour
Mandy Donald
Emma Howard Boyd CBE (resigned 23 March 2023)
John Ions
Quintin Price (resigned 23 March 2023)
Rebecca Shelley
George Yeandle
97
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023GOVERNANCE DISCLOSURE REQUIRED UNDER THE LISTING RULES AND DISCLOSURE GUIDANCE AND TRANSPARENCY RULES
DTR 4.1.5.R and DTR 4.1.8 R and DTR 4.1.11R
Information which is the required content of the management report can be found in the Strategic Report and in this Directors’ Report.
LR 9.8.4R / DTR 7.2
The following table is disclosed pursuant to Listing Rule 9.8.4R and DTR 7.2. The information required to be disclosed, where
applicable to the Company, can be located in these Annual Report and Financial Statements at the references set out below:
Information required
Interest capitalised
Shareholder waiver of dividends
Shareholder waiver of future dividends
Location
Not applicable
Note 23
Note 23
Agreements with controlling shareholders
Not applicable
Provision of services by a controlling shareholder
Not applicable
Key contracts
Risk Management and Internal Controls Report
Details of long-term incentives schemes
Remuneration Report
Waiver of emoluments by a Director
Not applicable
Waiver of future emoluments by a Director
Not applicable
Non-pre-emptive issues of equity for cash
Allotment of nil fully paid ordinary shares of 1p each under the terms of the Liontrust
Long-Term Incentive Plan.
Non-pre-emptive issues of equity for cash in relation
to major subsidiary
Not applicable
Participation by parent of a placing by a listed
subsidiary
Not applicable
Streamlined Energy and Carbon Reporting (SECR)
Strategic Report page 72
Corporate Governance code and practices applied
Corporate Governance Report
DTR 7.2.2 DTR7.2.3
Main features of the internal control and risk
Risk Management and Internal Controls report
management systems DTR 7.2.5
Significant shareholders, rights, voting, appointment of
Corporate Governance report; Directors’ Report
directors, significant agreements DTR 7.2.6
Administrative, Management and Supervisory Bodies
Risk Management and Internal Controls Report
and their Committees DTR 7.2.7
All the information cross referenced above is incorporated by
reference into this Directors’ Report.
time appointed for holding the meeting. None of the ordinary
shares carries any special rights with regard to control of the
Company.
DTR 7.2 Structure of capital and voting rights
As at 31 March 2023, there were 64,935,384 fully paid
ordinary shares of 1p amounting to £649,354. Each share
in issue is listed on the Official List maintained by the FCA in
its capacity as the UK Listing Authority.
The Company has one class of ordinary shares which carry
the right to attend, speak and vote at general meetings of
the Company. The holders of ordinary shares have the right
to participate in dividends and other distributions according
to their respective rights and interests in the profits of the
Company and a return of capital on a winding-up of the
Company. Full details regarding the exercise of voting rights
in respect of the resolutions to be considered at the Annual
General Meeting to be held on 21 September 2023 are set
out in the Notice of Annual General Meeting.
Under Resolution 18 of the Annual General Meeting held on 22
September 2022, the shareholders authorised the Company to
purchase its own shares pursuant to section 701 of the Companies
Act 2006. This authority is limited to the maximum number of
6,493,538 Ordinary shares of 1 pence each (equivalent to
approximately ten per cent of the issued share capital of the
Company). This authority expires at this year’s Annual General
Meeting of the Company or 22 December 2023 (whichever is
the earlier). The maximum price that may be paid for an Ordinary
share will be the amount that is equal to 5 per cent above the
average of the middle market prices shown in quotations for an
Ordinary share in the London Stock Exchange Daily Official
List for the five business days immediately preceding the day
on which that Ordinary share is purchased. The minimum price
which may be paid for an ordinary share is 1 pence.
To be valid, the appointment of a proxy to vote at a general
meeting must be received not less than 48 hours before the
There have been no share buybacks during the period. The
Company does not hold any shares in treasury.
98
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
GOVERNANCE SHARES HELD IN AN EMPLOYEE BENEFIT TRUST
The Liontrust Asset Management Employee Trust (the “EBT”) owns 1,146,288 shares in the Company as at 31 March 2023.
Dividends on these shares are waived by the trustee of the EBT.
SUBSTANTIAL SHAREHOLDERS
As at 31 March 2023, as far as known to the Company the following persons (other than a director) were directly or indirectly
interested in 3 per cent or more of the issued share capital of the Company.
Share Register as at: 31 March 2023
Name
Number of shares held
Percentage of issued share capital
Hargreaves Lansdown, stockbrokers
Sanford Deland Asset Management
BlackRock
Martin Currie Investment Management
abrdn
Vanguard Group
3,930,774
3,775,000
3,749,872
3,748,000
3,509,955
2,932,832
Canaccord Genuity Wealth Management
2,494,252
Slater Investments
2,378,551
Legal & General Investment Management
2,053,153
6.05
5.81
5.77
5.77
5.41
4.52
3.84
3.66
3.16
As at 31 May 2023 (being the latest practicable date prior to the publication of this document), so far as is known to the Company
the following persons (other than a director) were directly or indirectly interested in 3 per cent or more of the issued share capital
of the Company.
Share Register as at: 31 May 2023
Name
Number of shares held
Percentage of issued share capital
Hargreaves Lansdown, stockbrokers
Martin Currie Investment Management
Sanford Deland Asset Management
abrdn
BlackRock
Vanguard Group
Slater Investments
4,196,158
3,748,000
3,475,000
3,433,176
3,034,521
2,931,751
2,378,551
Canaccord Genuity Wealth Management
1,980,430
6.46
5.77
5.35
5.29
4.67
4.51
3.66
3.05
The Company is not aware of and has not been notified of any shareholding representing, directly or indirectly, 3 per cent.
of more of the share capital of the Company. The Company is not aware of any person who directly or indirectly, jointly or
severally, exercises or could exercise, control over the Company.
99
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023GOVERNANCE
CORPORATE GOVERNANCE
DTR 7.2.1 requires that the Company’s disclosures on
corporate governance are included in the Directors’ Report.
A report on corporate governance appears on pages 86 to
95, which is incorporated by reference into this Directors’
Report and is deemed to form part of this Directors’ report.
RISKS AND UNCERTAINTIES
A report on principal risks and how they are managed
appears in the Strategic Report on pages 46 to 63 and a
report on the risk management and internal controls appear
on pages 83 to 85.
CORPORATE SOCIAL RESPONSIBILITY
Liontrust aims to be recognised as an organisation that is
transparent and ethical in all its dealings as well as making
a positive contribution to the community in which it operates.
The Board recognises the Group’s impact, responsibilities
and obligations on and towards society and aims to promote
equal opportunities and human rights, reduce environmental
risk and operate in a sustainable manner.
The Group is committed to the highest standards of business
conduct. Policies and procedures are in place to facilitate
the reporting of suspect and fraudulent activities, including
money laundering and anti-bribery policies.
Information on the consideration of stakeholder interests is set
out in the Section 172 statement on page 91 to 95.
EMPLOYEES
The Group gives fair consideration to any application for
employment from disabled persons, where the person can
adequately fulfil the job’s requirements. Should any existing
employee become disabled, the Group will aim to ensure,
as far as is practicable, to provide continuing employment
under normal terms and conditions and to provide training
and career development to disabled employees.
Details of Equal Opportunities, Diversity and Inclusion can be
found on page 68.
FINANCIAL INSTRUMENTS
The Group’s financial instruments at 31 March 2023
comprise cash and cash equivalents, financial assets and
receivable and payable balances that arise directly from its
daily operations.
Receivables arise principally in respect of fees receivable
on funds under management, cancellations of units in unit
trusts and sales of units in unit trusts, and shares of ICVCs title
to which are not transferred until settlement is received. The
Group’s credit risk is assessed as low.
The Group’s health and safety policy aims, insofar as it is
reasonably practical, to ensure the health and safety of all
employees and other persons who may be affected by the
Group’s operations and provide a safe and healthy working
environment. The Group has a good record of safety.
A report on Responsible Capitalism can be found on Pages
70 to 74. This includes environmental performance data,
including Scope 1, Scope 2 and Scope 3 greenhouse gas
(GHG) emissions data and the Company’s TCFD Report.
Liontrust aims to be recognised as an organisation that is
transparent and ethical in all its dealings as well as making
a positive contribution to the community in which it operates.
Financial assets comprise assets held at fair value through
profit or loss.
Assets held at fair value through profit or loss are unit trust
units held in the ‘manager’s box’ to ease the calculation of
daily creations and cancellations, and shares in the sub-funds
of the Liontrust Global Funds plc.
Payables (excluding deferred income) represent amounts the
Group is due to pay to third parties in the normal course
of business. These include expense accruals as well as
settlement accounts (amounts due to be paid for transactions
undertaken). Trade payables are costs that have been billed,
accruals represent costs, including remuneration, that are not
100 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
GOVERNANCE yet billed or due for payment. They are initially recognised at
fair value and subsequently held at amortised cost.
• There are no agreements between the Company and its
Directors concerning compensation for loss of office as at
31 March 2023.
Cash flow is managed on a daily basis, both to ensure
that sufficient cash is available to meet liabilities and to
maximise the return on surplus cash through use of overnight
and monthly deposits. The Group is not reliant on income
generated from cash deposits.
Deposit banks are selected on the basis of providing a
reasonable level of interest on cash deposits together with a
strong independent credit rating from a recognised agency.
Any banks selected for holding cash deposits are selected
using a detailed counterparty selection and monitoring policy
which is approved by the Board.
Based on holding the financial instruments as noted above the
Group does not feel subject to any significant liquidity risk.
to
BASIS OF FINANCIAL STATEMENTS
Having given consideration
the uncertainties and
contingencies disclosed in the financial statements, the
Directors have satisfied themselves that the Group has
adequate resources to continue in operation for at least 12
months from approval of the financial statements and they
continue to adopt the going concern basis of accounting in
preparing the annual financial statements.
INDEPENDENT AUDITORS
A resolution to reappoint KPMG LLP as auditors to the Company
and to authorise the Directors to fix their remuneration will be
proposed at the 2023 Annual General Meeting.
Full details of the Group’s financial risk management can be
found in note 2 on page 152 to 156.
POLITICAL DONATIONS
The Group made no political donations or contributions
during the year. (2022: £nil).
ANNUAL GENERAL MEETING
The Annual General Meeting of the Company will be held in
the Pinafore room at the Savoy Hotel, Strand, London, WC2R
0EZ on 21 September 2023 at 2.00 p.m. A notice convening
this meeting will be sent to shareholders in August 2023.
EVENTS AFTER THE REPORTING PERIOD
On 4 May 2023, the Company announced that it has
conditionally agreed to acquire the entire issued share capital
of GAM Holding AG. Further details of the transaction are
set out in the Company’s announcement dated 4 May 2023.
SECTION 992, COMPANIES ACT 2006
The following information is disclosed in accordance with
section 992 of the Companies Act 2006:
• The Company’s capital structure, voting rights and
• Details of substantial shareholders in the Company are listed
on page 99.
• The rules concerning the appointment and replacement
of Directors are contained in the Company’s articles of
association and are discussed on page 89.
• There are: no restrictions concerning the transfer of the
securities in the Company; no special rights with the regard
to control attached to securities; no agreement between
holders of the securities regards their transfer known to the
Company; and no agreement which the Company is party
to that might affect its control following a takeover bid.
On 13 June 2023 the circular related to the proposed
acquisition of GAM was mailed to shareholders, and on the
same day the Swiss offer prospectus setting out the terms
and conditions of the proposed acquisition to the GAM
Holding AG shareholders was also published. Also, on 13
June 2023 Liontrust announced that it had mailed a circular
to shareholders in connection with the proposed cancellation
of the entire amount currently standing to the credit of the
Company’s share premium account.
By order of the Board
Sally Buckmaster
Group Company Secretary
20 June 2023
101
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023GOVERNANCE STATEMENT OF DIRECTORS’ RESPONSIBILITIES
IN RESPECT OF THE ANNUAL REPORT AND
FINANCIAL STATEMENTS
The directors are responsible for preparing the Annual Report
and the Group and parent Company financial statements in
accordance with applicable law and regulations.
Company law requires the directors to prepare Group and
parent Company financial statements for each financial
year. Under that law they are required to prepare the
Group financial statements in accordance with UK-adopted
international accounting standards and applicable law
and have elected to prepare the parent Company financial
statements on the same basis.
Under company law the directors must not approve the
financial statements unless they are satisfied that they give
a true and fair view of the state of affairs of the Group and
parent Company and of the Group’s profit or loss for that
period. In preparing each of the Group and parent Company
financial statements, the directors are required to:
• select suitable accounting policies and then apply them
consistently;
• make judgements and estimates that are reasonable,
relevant and reliable;
• state whether they have been prepared in accordance with
UK-adopted international accounting standards;
• assess the Group and parent Company’s ability to continue
as a going concern, disclosing, as applicable, matters
related to going concern; and
• use the going concern basis of accounting unless they either
intend to liquidate the Group or the parent Company or to
cease operations, or have no realistic alternative but to do so.
responsible
The directors are
for keeping adequate
accounting records that are sufficient to show and explain
the parent Company’s transactions and disclose with
reasonable accuracy at any time the financial position of the
parent Company and enable them to ensure that its financial
statements comply with the Companies Act 2006. They are
responsible for such internal control as they determine is
necessary to enable the preparation of financial statements
that are free from material misstatement, whether due to
fraud or error, and have general responsibility for taking
such steps as are reasonably open to them to safeguard the
assets of the Group and to prevent and detect fraud and
other irregularities.
Under applicable law and regulations, the directors are also
responsible for preparing a Strategic Report, Directors’ Report,
Directors’ Remuneration Report and Corporate Governance
Statement that complies with that law and those regulations.
The directors are responsible for the maintenance and
integrity of the corporate and financial information included
on the company’s website. Legislation in the UK governing
the preparation and dissemination of financial statements
may differ from legislation in other jurisdictions.
In accordance with Disclosure Guidance and Transparency
Rule 4.1.14R, the financial statements will form part of the
annual financial report prepared using the single electronic
reporting format under the TD ESEF Regulation. The auditor’s
report on these financial statements provides no assurance
over the ESEF format.
Responsibility statement of the Directors in respect of the
annual financial report We confirm that to the best of our
knowledge:
• the financial statements, prepared in accordance with the
applicable set of accounting standards, give a true and fair
view of the assets, liabilities, financial position and profit or
loss of the company and the undertakings included in the
consolidation taken as a whole; and
• the strategic report includes a fair review of the development
and performance of the business and the position of the
issuer and the undertakings included in the consolidation
taken as a whole, together with a description of the principal
risks and uncertainties that they face.
We consider the annual report and accounts, taken as a
whole, is fair, balanced and understandable and provides the
information necessary for shareholders to assess the group’s
position and performance, business model and strategy.
Disclosure of information to auditor
The directors who held office at the date of approval of this
directors’ report confirm that, so far as they are each aware,
there is no relevant audit information of which the Company’s
auditor is unaware; and each director has taken all the steps
that he/she ought to have taken as a director to make themself
aware of any relevant audit information and to establish that
the Company’s auditor is aware of that information.
By order of the Board
Vinay Abrol
Chief Operating Officer & Chief Financial Officer
20 June 2023
102 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
GOVERNANCE NOMINATION COMMITTEE REPORT
INTRODUCTION
On behalf of the Nomination Committee (the “Committee”), I
am pleased to present our report for the financial year ended
31 March 2023. This report is intended to provide a summary
of the Committee’s principal duties, as well as giving further
insight into its workings, approach and key activities during the
year and beyond.
PRINCIPAL DUTIES
The Committee’s principal duties are to regularly review the
composition of the Board and its committees to ensure the
correct balance of skills, experience and diversity is in place
and to make recommendations for change. This includes
assessing the skills, expertise and experience of the Board,
undertaking Board succession planning and leading the
selection process for new Board appointments. In fulfilling this
duty the Committee gives due consideration to the performance
of the Directors, the skills, experiences and time commitment
required of Board and committee members, potential conflicts
of interest and the benefits of diversity to enable the Board
to effectively discharge its duties. The Committee periodically
monitors workforce matters, including firmwide engagement
with staff, supporting an inclusive culture and the identification
and development of a diverse pipeline for potential succession.
The terms of reference of the Committee, which set out its role
and the authority delegated to it by the Directors, are available
on the Company’s website or upon request from the Company
Secretary. They were most recently updated in November
2022. The terms of appointment of the Directors shall be
available for inspection at the 2023 Annual General Meeting.
NON-EXECUTIVE CHAIR OF THE LIONTRUST BOARD
It is important that I address my own role as Non-executive
Chair of the Board early in this report. I first became a Non-
executive Director of Liontrust in April 2011 so have been
on the Board for over twelve years, albeit only four since my
appointment to the Chair in September 2019. We are all
cognisant that the 2018 UK Corporate Governance Code
(the “Code”) recommends that a Non-executive Chair should
not ordinarily remain in situ beyond nine years from the date of
their first appointment to the Board. The Code sets out that this
period can be extended for a limited time, particularly in those
cases where the Chair was an existing Non-executive Director
on appointment, to facilitate effective succession planning and
the development of a diverse Board.
was mindful of the significant expansion of the Company in
recent years, and the need to ensure that the foundations of
the firm best enable it to meet its strategic objectives over
the medium term. Expansion has been achieved through
a combination of organic and inorganic growth, the latter
including the acquisition and integration of Neptune Investment
Management in October 2020, the Architas UK Investment
Business in October 2020 and Majedie Asset Management
in April 2022. As a result the Company has considerably
increased its AUMA base, broadened the product range
and enhanced its distribution offering to clients in the UK
and overseas, whilst a number of operational departments
have been restructured and the workforce headcount nearly
doubled. The period has not been without macroeconomic
hurdles, including the challenges presented by COVID and
continuing evolution of the regulatory environment in the UK
and overseas whilst the pending acquisition and integration
of GAM present further circumstance for which future Board
stability is merited.
The Committee has also been mindful of changes to the
Board itself, with three new Non-executive Directors joining
in recent years, the recent departures of Emma Howard-Boyd
and Quintin Price, and further appointees expected over the
short and medium term as set out below. Whilst my fellow
Directors have added to the skills, experience and diversity
of the Board, the average Non-executive tenure excluding me
and George Yeandle, who intends to retire from the Board
next year, is less than three years. In this context, it has deemed
my longstanding experience as a Non-executive Director and
Chair, and my deep understanding of the asset management
industry and Liontrust itself to be particularly important in this
stage of the Company’s evolution. The Committee, supported
by the Executive Directors, has therefore concluded that it is in
the best interests of Liontrust for my role to continue for the time
being, to provide immediate stability through the Company’s
continued evolution phase and the opportunity for effective
succession planning for the Board and the role of Chair. This
period should not however be without limit; it is thus proposed,
subject to approval by our shareholders, that I remain as Non-
executive Chair for a maximum of two years, standing down
no later than the AGM in September 2025. Following this
year’s AGM, we will commence the recruitment process for
my successor. Finding the right person to take on this important
role may take time, but we do not expect that I will remain as
Chair for the full maximum two-year period described above.
In considering whether to extend my tenure as Chair the
Committee undertook an independent internal review. This
was led by our Senior Independent Director, Rebecca Shelley.
Naturally, other than confirming my willingness to continue
serving Liontrust as Chair if the Board considered that to be
appropriate, I did not participate in the review nor was I
present when it was discussed by the Committee. The review
COMMITTEE MEMBERS AND ATTENDANCE
During the financial year to 31 March 2023, the Committee
comprised me as Chair, along with the other independent
Non-executive Directors that served during the year; Mandy
Donald, Emma Howard Boyd, Quintin Price, Rebecca
Shelley and George Yeandle. The Executive Directors are
not Committee members although may attend meetings by
103
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023GOVERNANCE invitation. The Committee met six times during the year, with
all Committee members attending every meeting as detailed
in the table on page 88 except for my absence at a meeting
chaired by Rebecca Shelley at which the Committee members’
views on the continuation of my role were determined.
RECRUITMENT AND FUTURE DEVELOPMENT
The Committee was particularly active in the previous
financial year, overseeing the processes that culminated in the
appointment of three new independent Non-executive Directors
in Emma Howard Boyd, Rebecca Shelley and Quintin Price.
As such, no further Board recruitment activity was undertaken
in this financial year.
With two of the Non-executive Directors having left the Board
in March 2023,George Yeandle signalling his intention to retire
from the Board in 2024 and to plan for the succession of the
Chair, the Committee has carefully considered and reflected
upon the composition of the Board, the skills and experience
required by the Board and the diversity of the Board. The output
of the Committee’s review has been discussed by the Board and
further consideration given to the dynamic of the Board and its
effective operation during a time of corporate change.
As a result of this, we have appointed a recruitment firm to
commence a search for a new Non-executive Director. We
anticipate this appointment will increase diversity on the
Board. The principle objective of this search is to identify a
candidate that can in time take on George’s role as Chair
of the Remuneration Committee. The Company has no
connection with the appointed recruitment firm, Teneo People
Advisors. Following our AGM, we further intend to commence
the search for a new Chair. The Committee will continue to
review the Board’s size and composition and may in due
course, following the successful recruitment described above,
seek to recruit a further independent Non-executive Director.
DIVERSITY & INCLUSION
The Committee fully believes in the benefit that diversity
brings in terms of broader perspectives, beneficial insight
and challenge to the Board and throughout the Group and is
actively seeking to develop and maintain a diverse business
in terms of gender, ethnicity and educational background,
including at Board level. The Group operates a policy of equal
opportunity, details of which can be found in the Corporate
Social Responsibility section of the Strategic Report.
Diversity & inclusion – Board of Directors
It remains an overriding prerequisite that each Director or
proposed Director must have the skills, experience and
character to contribute individually and collectively to the
effectiveness of the Board and the success of the Company.
Subject to this principle, managed through the continued
maintenance and development of a Board Skills Matrix,
the Board believes that diversity amongst its members is of
great value. It is thus the Company’s policy to give careful
consideration to issues of overall Board balance and diversity
in making new appointments to the Board. The Committee
considers diversity, including gender and ethnic diversity,
when looking to appoint additional Directors and encourages
all the Directors to create an inclusive culture within the Group
in which difference is recognised and valued. This approach
is set out in the Board Diversity Policy.
The Hampton-Alexander Review recommends that women
should represent at least 33% of Board members whilst the
Parker Review sets recommends that at least one Board
member should be from an ethnic minority background.
Liontrust continues to meet both targets, with 33.3% of Board
Directors being women (2022:37.5%) and one Director being
Asian British (2022: one).
The Committee notes the three targets set out in the FCA’s April 2022 Policy
Statement 22/03, that at least:
40% of the board are women;
one of the senior board positions
(Chair, Chief Executive Officer (CEO),
Senior Independent Director (SID)
or Chief Financial Officer (CFO))
is a woman; and
one member of the board is from a
minority ethnic background.
104 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
GOVERNANCE Liontrust currently meets two of these three targets with Rebecca Shelley serving as Senior Independent Director and Vinay Abrol
serving as Chief Financial Officer & Chief Operating Officer. As noted above, with two of six Directors, women represent 33.3%
of the Board rather than 40% as targeted by the FCA. It is anticipated that the search currently underway for a new Non-executive
Director will increase diversity on the Board.
Number of
board members
Percentage of
the board
Number of senior
positions on the board
(Chair, CEO, CFO, SID)
Men
Women
Other categories
Not specified/ prefer not to say
White British or other White (including minority white groups)
Mixed/ Multiple Ethnic Groups
Asian/ Asian British
Black/ African/ Caribbean/Black British
Other ethnic group, including Arab
Not specified/ prefer not to say
4
2
–
–
5
–
1
–
–
–
66.7%
33.3%
–
–
83.3%
–
16.7%
–
–
–
3
1
–
–
3
–
1
–
–
–
Details of the male:female and ethnic composition of Liontrust on a firmwide basis are set out in the People section on page 64.
Diversity & inclusion – Firmwide
Inclusion
In 2021 Liontrust established a Diversity &
Committee; membership includes representation from across
the business in terms of seniority, departments, geographical
location, age, gender and ethnic background. This committee,
which meets monthly and is chaired by Vinay Abrol, reports
directly developments to this Committee and to the Board, and
liaises closely with Mandy Donald, the Non-executive Director
responsible
for Employee Engagement and overseeing
firmwide Diversity & Inclusion matters on behalf of the Board.
The Committee has continued to support the D&I Committee as
it delivers its action plan to support more inclusive and diverse
working practices throughout the firm. Developing from the D&I
Audit by a third party in 2021, initiatives during the year have
included supporting World Mental Health day in October,
PRIDE through June 2022 and Black History throughout
October 2022, with key note speakers and featured artist
Mary Osinibi. The D&I Committee arranged a series of events
on and around International Women’s Day in March 2023
championing the “Embrace Equity” theme; again with a
keynote speaker, networking and webinars.
In building a more inclusive culture the D&I committee
have hosted firmwide training sessions on Unconscious
Bias, Allyship, Micro Aggressions, Autism Awareness and
Psychological Safety. The impact of these initiatives can be
seen in our Engagement scores (see Our People section on
page 64). As an adjunct to the Leadership Training (below)
senior leaders attended training on ‘Inclusion as a Strategic
Driver’ for leaders to consider diversity and inclusion at a
strategic level.
The Chair of the D&I committee has recently announced to
the firm a partnership with Mental Health at Work, a Mental
Health and Wellbeing adviser to enhance mental health and
wellbeing practices. This initiative will run through 2023 with
training and support to all staff. This builds on the ‘Mindful
Mondays’ sessions available to all staff in Q1 2023.
COMPANY TALENT AND SUCCESSION PLANNING
The Committee oversees the firm’s succession planning for
senior management, including the adequacy of emergency
cover and identification and development of talent. During
the year the Committee received reports considering the
experience and capabilities of individuals in key roles and the
potential succession pipeline, The Committee monitors learning
and development activities across the group to develop the
skillsets and wellbeing of our workforce.
In 2022 the Committee oversaw the establishment of a Senior
Leadership Training Programme, which is now well advanced.
The objective of this programme has been to increase the
effectiveness of leadership at Liontrust, initially focusing on the
leadership team purpose and identity, leveraging the team’s
strengths and addressing weaknesses, and embedding shared
standards and behaviours throughout the workforce and as a
framework for the development of future talent. Further training
groups, representing a balance of gender, ethnicity, seniority
and department, have been identified for the next round of the
programme throughout this financial year. This training will
not be a replica of the initial sessions; rather than define what
Leadership means at Liontrust, the focus is to implement the
defined values and behaviours, supporting how leaders and
managers model the leadership charter to all.
105
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023GOVERNANCE
EMPLOYEE ENGAGEMENT
In 2020 Liontrust established a Workforce Advisory Committee
to advise Management of issues relating to the workforce. This
year this committee has been reconfigured as a Workforce
Forum. The forum, which acts as the Board’s formal workforce
advisory panel and has representation across departments and
office locations, met a number of times during the financial
year. A particular focus in 2023 was liaising between senior
management and the business to encourage employees to
participate in the annual workforce engagement survey, to help
understand its results more fully and to share the actions which
were taken as a result of the survey. Mandy Donald acts as
the Non-executive Director responsible for overseeing employee
and member engagement matters on behalf of the Board.
RESPONSIBILE CAPITALISM AND ESG AT BOARD LEVEL
In March 2023 Rebecca Shelley took over from Emma
Howard Boyd as the Non-executive Director responsible for
overseeing the Company’s policy and practices in respect of
ESG matters on behalf of the Board and to engage on ESG
related matters with the relevant areas of Group. John Ions is
the Executive Director with responsibility for ESG matters (see
page 70, Strategic Report – Responsible Capitalism).
BOARD AND COMMITTEE EVALUATION
Constal Limited (“Constal”) again carried out an independent
evaluation of the Board and its committees in respect of the
year to 31 March 2023, to review progress since last year
and evaluate performance; in view of the director changes the
review was deferred until May 2023.
As last year, Constal’s approach was to take stock of progress
since the last Board review and to consider:
• what to focus on to help the Board be more effective and to
it the next level; and
• how
the Board can constructively assist executive
management achieve the Group’s strategy in a way that
ensures long-term sustainable success for stakeholders.
The review was based on confidential interviews with the
members of the Board and the Company Secretary. Through
interviews Constal asked participants to reflect on various
aspects of the Board and its committees, including the quality
of debate and decision-making, the information they receive,
how well Board discussion time is spent, how the committees
are working, how to achieve and manage the aims for Group
and how the Board might have to adapt to make sure it is best
prepared to meet those challenges.
The key recommendations from the review, which have been
adopted by the Board, are:
• Continue to develop process for monitoring progress against
strategy and goals ensuring sufficient time to consider options;
• With respect to the GAM acquisition, maintain a close focus
on integration, ensuring clarity around milestones and plans for
integration and information needed to monitor appropriately.
Build in board time to hear from heads of function to aid
understanding and monitoring of progress around integration;
• Continued focus on enhancing Board and Committee
papers and reports;
• Ensure sufficient time allocated to oversight of culture and
talent development and milestones for their achievement;
• Review time allocated for Committees and responsibilities and
timing of reporting with respect to the people agenda; and
• Agree size and shape of board and timelines for succession
planning and onboarding.
INDEPENDENCE AND CONFLICTS OF INTEREST
It is important that the Non-executive directors of an asset
management firm are not only knowledgeable and experienced,
but have the skills, integrity, scope and absence of conflicts of
interest to undertake such senior roles. I am satisfied that such
requirements are met. In advance of accepting any new roles
each Director is required to discuss potential conflicts arising
from and time commitments expected of the new appointment.
TIME COMMITMENT
As part of the Board and Committee Evaluation, the Committee
reviewed the time required of our Non-executive Directors to
effectively discharge their responsibilities. Any significant new
appointments are required to be approved by the Committee.
By way of example, the Committee considered my appointment
as interim chair of a UK listed company and was satisfied
that I have sufficient time to dedicate to Liontrust. This is an
interim role and is anticipated to end at the end of 2023. The
Committee is satisfied that all Directors have sufficient time to
dedicate to their duties and have clearly demonstrated this
throughout the year.
FOCUS FOR THE 2024 FINANCIAL YEAR
During the remainder of 2023 and into 2024 the Committee
will continue to evolve a succession timetable for the Board,
and continue to oversee the identification and development
of management talent at senior and mid management levels.
Alastair Barbour
Chair of the Nomination Committee
20 June 2023
106 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
GOVERNANCE APPENDIX: BOARD COMPOSITION AND TENURE STATISTICS
As at 31 March 2023, using the composition at that date. A search for another Non-executive Director is underway.
Balance between Non-executive and Executive Directors
The balance of the Board between Executive and Non-executive
Directors is four Non-executive Directors (66.7%) (2022:
75.0%) and two Executive Directors (33.3%) (2022: 25.0%):
Gender diversity
The gender diversity of the Board is with four male Directors
(66.7%) (2022: 62.5%) and two female Directors (33.3%)
(2022: 37.5%):
NON-EXECUTIVE/
EXECUTIVE SPLIT
GENDER DIVERSITY
Non-executive Directors (4)
66.7%
Executive Directors (2)
33.3%
Male (4)
Female (2)
66.7%
33.3%
Ethnic diversity
The ethnic diversity of the Board is five White British Directors
(83.3%) (2022: 87.5%) and one Asian British Director
(16.7%) (2022: 12.5%):
Tenure
The tenure of the four Non-executive Directors (including the
Non-executive Chair) is one having served less than 3 years,
one having served between 3 and 6 years and two having
served over 6 years, breaking down as 25.0% vs 25.0% vs
50.0% respectively (2022: 66.7% vs 0.0% vs 33.3%):
ETHNIC DIVERSITY
TENURE
White British Directors (5)
Asian British Directors (1)
83.3%
16.7%
<3 years (1)
3–6 years (1)
>6 years (2)
25%
25%
50%
107
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023GOVERNANCE AUDIT & RISK COMMITTEE REPORT
Introduction by the Chair of the Audit & Risk Committee
Dear shareholder,
On behalf of the Audit & Risk Committee (the “Committee”), I am pleased to present the Audit & Risk Committee report for the
financial year ended 31 March 2023. The Committee has had a full agenda, undertaking the Committee’s core responsibilities,
as well as overseeing a number of ad-hoc projects including the onboarding of a new internal auditor, Grant Thornton. Grant
Thornton were appointed in October 2022 and the Committee is pleased with the transition to the new team. Further details of
this appointment and other key projects are discussed in the report.
The Committee continues to focus on assisting the Board in its presentation of the Group’s financial results; and focuses on a number
of key responsibilities, including; continuing to review the effectiveness of the Group’s system of internal controls and risk management
systems; monitor and periodically review the Group’s procedures for ensuring compliance with regulatory and financial reporting
requirements; monitor the effectiveness of internal audit and keep under review the independence and objectivity of the external auditors.
The terms of reference of the Committee, which explain its role and the authority delegated to it by the Board of Directors is reviewed
annually, with the last review undertaken in January 2023. The Committee’s terms of reference are published on the Company’s
website and are available upon request from the Company Secretary. Whilst no shareholders have requested specific matters to be
discussed by the Committee, maintaining an open relationship with shareholders remains a commitment of the Committee.
The Committee has continued to work closely with the Board throughout the year. All recommendations made by the Committee
have been accepted by the Board. The Committee continues to meet the requirements of the UK Corporate Governance Code
and FRC Financial Reporting standards.
The Committee continues to maintain an effective and open relationship with the Group’s external auditors, alongside enhancing
the oversight, reporting and challenge the Committee undertakes. The Committee has noted the upcoming FRC Audit Committee
and the External Auditors: Minimum Standard publication and has reflected throughout the report where the Group already meets
many of the new reporting requirements.
I hope that you find this report a useful insight into the work of the Committee and I look forward to meeting with shareholders at
our AGM on 21 September 2023.
Mandy Donald
Chair of the Audit & Risk Committee
20 June 2023
Key responsibilities
The Committee’s key responsibilities remain unchanged during
the year and continue to be:
• assist the Board in its presentation of the Group’s financial
results and position through review of the interim and full
year financial statements before they are approved by
the Board. The Committee focuses on compliance with
accounting principles and policies, changes in accounting
practice and major matters of judgement;
• keep under review the effectiveness of the risk framework that
is used to monitor the Group’s system of internal controls and
risk management systems. This includes suitable monitoring
procedures for the identification, assessment, mitigation and
management of all risks including liquidity, market, regulatory,
credit, legal, operational and strategic risks, with particular
emphasis on the principal risks faced by the Group. Such
procedures are designed to provide reasonable, but not
absolute, assurance against material misstatement or loss;
• as part of the suite of risk management procedures, the
Committee reviews and recommends to the Board for
approval, the Group’s Internal Capital Adequacy And Risk
Assessment (“ICARA”) to fulfil its regulatory obligations under
the Capital Requirements Directive and assess whether
the Pillar 2 assessments and Pillar 3 disclosures remain
appropriate;
• monitor and periodically review the Group’s procedures for
ensuring compliance with regulatory and financial reporting
requirements,
relevant
regulatory authorities;
relationship with
including
the
• review the Group’s arrangements for the deterrence,
detection, prevention and investigation of financial crime,
including whistle blowing arrangements;
• monitor and review the effectiveness of the Group’s internal
audit function and agree the scope of the internal audit
plan; and
• oversee the appointment, performance, remuneration and
independence of the external auditors.
108 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
GOVERNANCE Composition and attendance
The Committee is comprised solely of Non-executive Directors:
• Review and discussion of the Alternative Performance
Measures used in the 31 March 2023 financial statements.
• Mandy Donald
• Quintin Price (resigned – 23 March 2023)
• Rebecca Shelley
• Consideration of the Group’s taxation requirements.
• Review of the Group’s governance, risk framework, risk
management, risk management processes and related
policies.
• Emma Howard Boyd (resigned – 23 March 2023)
• Approval of Enterprise Risk Management framework.
• George Yeandle (appointed 23 March 2023)
• Review and approval of the Group’s ICARA.
The attendance record of members of the Committee during
the year is shown on page 88.
The Committee as a whole are considered by the Board to
be appropriately experienced and sufficiently qualified to fulfil
their duties and have competence relevant to the sector in which
the Group operates. The Board considers Mandy Donald has
recent and relevant financial experience in addition to her
professional qualification as a chartered accountant. Details
of the Committee members’ profiles are set out in full in the
Board members’ biographies.
The Chief Operating Officer & Chief Financial Officer, Chief
Compliance Officer, Head of Finance and Chief Risk Officer
were regular attendees at the Committee meetings and reported
on their respective areas and support the Committee members,
where appropriate, with their responsibilities although the
agenda and items for discussion during a Committee meeting
is led by the Chair. The external auditor, KPMG LLP have
attended all Committee meetings and met privately with the
Committee and Committee Chair.
Key Activities during the year
The Committee has a formal programme of matters which it
covers during the year. This programme is formulated by the
Committee Chair and the Chief Operating Officer & Chief
Financial Officer and is designed to ensure that all matters that
fall within the Committee’s remit are reviewed during the year.
The Committee has access to external independent advice at
the Company’s expense.
During the financial year to 31 March 2023 and up to
the date of this report, the Committee met six times and its
activities, amongst other things, covered the following matters:
• Reviewing the annual financial statements for the year
ended 31 March 2022 and 2023 and half year financial
statements for the six months to 30 September 2022 with
particular emphasis on their fair presentation, challenging
the reasonableness of management’s judgements made
and the valuation of assets and liabilities. There were no
significant issues identified during the period in relation to
the financial statements.
• The appropriateness of the accounting policies used in
drawing up the Group’s financial statements.
• Review of the Group’s compliance monitoring programme,
compliance manual (including whistle blowing arrangements)
and annual anti-money laundering report.
• Review and discussion of regular reports on financial
reporting, key risks, compliance, Client Money & Assets
(“CASS”) and financial crime from the Head of Finance,
Chief Risk Officer and Chief Compliance Officer respectively.
• Review and consideration of the external auditors’ reports
on Client Money & Assets.
• Consideration of the external auditors’ report on the financial
year ending 31 March 2022 audit and discussion of their
findings with them.
• Review of the internal audit plan in the context of the
Company’s overall risk management programme detailed
above.
• Reviewed and discussed the findings of 9 internal audit
reports, ensuring appropriate follow up by management of
points raised. These internal audit areas included: Systems
and Controls, Compliance, Front Office and Trading
Teams, Regulatory Reporting, Share Schemes, Operational
Resilience, Competition, Stewardship Code, Distribution
Procedural Review
• Approval of the external audit plan for 2023.
• Assessment of
the performance,
independence and
objectivity of the external auditors, concluding that the
Committee was satisfied with the quality and effectiveness
of the audit; and noting that the auditors had appropriately
challenged management’s assumptions and estimates.
• Review and approval of all non-audit services to be carried
out by the external auditors.
• Review of the Committee’s terms of reference.
• Review of the suspension of Liontrust Russia fund, as detailed
on page 110.
• Review of ESG reporting and metrics. The Committee
discussed the impact of climate on the audit with the auditors.
• Share based payments are a focus for the Committee in
view of the complexity of accounting, interpretation of the
reporting standard and valuation of awards. The Committee
receives information and explanations from management
which is discussed with them and with the auditors, taking
into account the results of the auditors’ work. This does not
give rise to any material estimates or judgements.
109
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023GOVERNANCE Significant accounting matters
Acquisitions
Accounting for acquisitions are considered by the Committee,
given the complexity of the accounting and the judgmental
nature of assumptions that are taken into account in the
calculation of accounting models in relation to the valuation
of intangible assets, goodwill and review of impairment.
The Committee receives information and explanations from
management which is discussed with them and the external
auditors, taking into account the results of the auditors work.
Impairment of Goodwill and Intangible assets
Goodwill arising on acquisitions is capitalised in the
consolidated balance sheet. Goodwill is carried at cost less
provision for impairment.
The costs of acquiring intangible assets such as fund
management contracts are capitalised where it is probable
that future economic benefits that are attributable to the assets
will flow to the Group and the cost of the assets can be
measured reliably. The assets are held at cost less accumulated
amortisation. An assessment is made at each reporting date,
on a standalone basis for each intangible asset, as to whether
there is any indication that the asset in use may be impaired.
During the year indicators of impairment were identified by
management for the Architas and Majedie intangible assets
due to higher than expected outflows and lower market
returns. Subsequently management retested the value of
these intangible assets at 30 September 2022 resulting in
impairments on these 2 intangible assets. The Committee
considered management’s assessments and the views of the
external auditors and are satisfied that the correct accounting
treatment has been followed.
Other significant issues
FRC Letter and Interaction
In February 2022, the Group received a letter from the FRC,
requesting information to give them a better understanding of
the accounting for share based payments in our 31 March
2021 annual report. We provided the information as requested
to the FRC An important part of the role of the Committee is
to provide non- executive oversight to ensure management has
an appropriate focus on high quality corporate reporting, and
therefore in the 2022 financial statements, have provided
additional clarification where
it has been determined
appropriate to ensure the Committee continues to enhance
reporting, where possible.
Review of the suspension of Liontrust Russia Fund
Following Russia’s invasion of the Ukraine, the Committee has
reviewed the global sanctions imposed and the impact these
have had on Liontrust funds and namely the Liontrust Russia
fund. The Committee has reviewed the Group’s Russia fund
valuation process, alongside all other funds impacted to ensure
appropriate controls were in place to protect clients. The
Committee received updates on cyber-security, which remains
a standing agenda item to be discussed at every Committee
meeting. The Committee members duly discussed the increase
risk of cyber-attacks by foreign nations and completed training
on cyber-security.
Internal audit
The Committee undertook an Internal Audit tender process in
the summer of 2022 and following the outcome of this process,
the Committee selected Grant Thornton (the “Internal Auditor”)
to be appointed in October 2022, replacing Minerva
Consulting. The Committee considered Grant Thornton to
provide the most robust and effective internal audit service
to meet the requirements of the Group. The internal auditor is
appointed to carry out a programme of internal audit work as
set by the Committee. As part of the Committee’s assessment of
the effectiveness of the role of Internal Auditor, the Committee
reviewed trends and current risk factors relevant to the Group
when assessing the appointment of an Internal Auditor and
developing the audit programme. The Committee understands
the importance of ensuring the existing management
monitoring processes in relation to these risks continues to
provide sufficient and objective assurance.
Internal Auditors Effectiveness
The Internal Auditor has a direct reporting line to the Chair
of the Committee. The Committee continues to review the
effectiveness of the internal audit function, ensuring the
appointment of an external firm as internal auditors is well
resourced and staffed by competent individuals and be
independent of the day-to-day activities of the Group, whilst
still having appropriate access to records.
The Committee and the Internal Auditors have agreed a rolling
three year Internal Audit plan, this includes the following
Audit areas: front office controls; data protection, security and
governance; risk management; significant financial systems;
outsourcing arrangements corporate culture and CASS. The
Internal Auditors will also perform a full systems and controls
review every three years, with all management feedback to
findings being independently reviewed and challenged by the
Committee before being approved.
The Committee regularly meets with the Internal Auditor,
with and without management present, throughout the year
to receive updates and to review its findings. Each year the
Committee considers the scope of the internal audit plan
and the performance of the Internal Auditors prior to the
commencement of the next year’s internal audit programme to
ensure they remain consistent with the Group’s requirements.
110 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
GOVERNANCE Internal audit Oversight conclusion
The Committee is pleased with the transition to Grant Thornton
as Internal Auditors and the robust and effective audits that
have been held, to date. The Committee agree that Grant
Thornton remains effective to undertake the audit with integrity
and sufficient challenge and remains independent.
External auditors
As previously reported, the Committee undertook an Audit
tender process in 2021 of which KPMG was selected as
External Auditor, with Jatin Patel being appointed audit lead
the same year. The tender was conducted in accordance
with the FRC’s Best Practice Guide to Audit Tendering. In line
with requirements, the Company intends to undertake a further
competitive audit tender no later than 2026 .
External Audit Effectiveness
The Committee has considered the effectiveness of the external
audit process throughout the year and included the activities
and steps detailed below.
Each year the auditors present to the Committee the proposed
scope of their full year audit plan, including their assessment
of the material risks to the Group’s audit and their proposed
materiality levels. This plan is reviewed by the Committee and
consideration is given to its coverage and the identification of
risks. The Committee was satisfied that the audit plan proposed
provided appropriate coverage and that the identification of
material risks to the Group’s audit are covered by the audit plan.
The Committee assesses the quality of the interactions of the
Audit team with the Committee, including the provision of
technical and industry knowledge.
The audit partner attends the Committee meetings. In addition,
the Committee met twice with the external auditors without
management present.
Each year, the Committee assesses the performance and
independence of the external auditors prior to proposition of
a resolution on their reappointment and remuneration at the
Annual General Meeting. This assessment includes the review of
the auditor’s challenge of management’s assumptions to ensure
that the auditor has demonstrated professional scepticism. The
Committee has concluded that KPMG have carried out their
audit for the year-ended 31 March 2023 effectively.
Based on the satisfactory conclusion of the work described
above carried out by the Committee to assess the performance
of the external auditors and safeguard their independence, the
Committee has recommended their reappointment to the Board
and a resolution will be proposed at the 2023 Annual General
Meeting for the reappointment of KPMG as external auditors.
The Committee will consider the FRC’s Audit Quality Inspection
and Supervision Report for KPMG LLP for 2023 when it has
been published. If the Committee deems it necessary, the
outcome of the report will be raised with the audit partner for
further discussion.
Non-audit services
The Committee has implemented a policy and guidelines
on provision of non-audit services by the external auditors to
safeguard their objectivity and independence. This policy has
been approved by the Board. The policy provides that provision
of certain types of non-audit services are not permitted under
any circumstances (“Prohibited Services”) whilst others allowed
(“Allowed Services”). The Chair and Head of Finance regularly
review any non-audit services and have a twostep sign off
process to agree if work can commence. The Committee
ensures the independence of the auditors is maintained at all
times and this sign off process agree each individual aspect of
work ensures independence is safeguarded and the auditors
objectivity is maintained.
Prohibited Services are those where the Committee considers
that the possibilities of a threat to auditor independence is high.
Allowed Services are those considered to have a low threat
to auditor independence. Nonetheless, Allowed Services still
need the Committee’s approval in advance. All services are
reviewed and ratified by the Committee.
The policy also sets out certain disclosures the external auditors
must make to the Committee, restrictions on employing the
external auditors’ former employees, partner rotation and the
procedures for approving non-audit services provided by the
auditors. The policy is reviewed regularly and updated to
ensure compliance with all applicable regulations.
During the year, the external auditors were, on a number of
occasions, engaged as advisers. The services provided related
to the regulatory CASS (client money) audits, interim review,
ESG disclosures assurance and work related to the merger
and closure of authorised investment funds. The Committee is
satisfied that the external auditors were best placed to provide
these services because of their familiarity with the relevant
areas of Group’s business and that there are no matters that
would compromise the independence of the external auditors
or affect the performance of their statutory duties.
The Committee receives a regular report setting out the non-
audit services provided by the external auditors during the
year and the fees charged.
Details of fees paid to the auditors can be found in Note 6 of
the financial statements. The non-audit services as identified in
Note 6 have all complied with the policy as detailed above.
External Audit oversight conclusion
The Committee concludes that KPMG is effective, undertakes
the audit with integrity and sufficient challenge and remains
independent.
111
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023GOVERNANCE REMUNERATION REPORT
Dear shareholder,
On behalf of the Remuneration Committee (the “Committee”),
I am pleased to present the Remuneration Report for the year
ended 31 March 2023. This letter is intended to provide
a summary of key events during the year from a Committee
perspective and to give further insight into the workings of
the Committee and its approach. The Annual Report on
Remuneration and this statement will be subject to an advisory
vote at our 2023 Annual General Meeting, to be held on 21
September 2023.
DIRECTORS’ REMUNERATION POLICY
This year marks the first full year in the operation of our most
recent Directors’ Remuneration Policy (“DRP”). which was
approved by Shareholders at a General meeting in February
2022. The DRP is available on the Company’s website (in
the Investor Relations section) and we have, therefore, only
included the DRP’s Elements of Reward table in this report.
The Board and the Committee are acutely aware of the votes
cast against the Company’s new DRP and at the Remuneration
Report at the September 2022 AGM .
The Committee undertook a detailed analysis of all the
feedback (including from those shareholders who voted in
favour of the DRP) and whilst there was no single consistent
theme with differing shareholders liking or having problems
with different elements of the DRP the main concerns were
over the quantum and calibration of performance metrics.
After further shareholder consultation the Committee made
several amendments to the DRP and the operation of the
variable remuneration arrangements including increasing the
threshold performance target of adjusted diluted EPS and in
the calculation of Adjusted Profit before Tax.
The Committee is committed to implementing the DRP in a way
that addresses shareholder concerns whilst being in the best
interests of Liontrust.
I have consistently maintained that although the DRP is critical
in establishing the framework for Executive Remuneration the
Committee should be judged on how it implements that policy.
It is the actual outcome that matters rather than the theoretical
one. In that respect I have set out below how the DRP has
been implemented including where changes have been made
either by the Committee using its judgement or exercising
its discretion to impact pay outcomes. Our guiding principle
remains that only exceptional, stretch performance will receive
exceptional reward.
IMPLEMENTATION OF THE 2022 DRP
I remain committed to openness and with transparency of
performance metrics and their associated weighted outcomes
and how, in turn, this affects annual bonus. We have also set
out full disclosure of the performance conditions on granted
LTIP awards.
VARIABLE REMUNERATION FOR 2023
Annual Bonus
This is the first year of the operation of a more ‘traditional’
scorecard for the annual bonus. In particular:
• shareholders universally welcomed the hard cap on the
annual bonus and the removal of the direct link and funding
from a pool linked to Adjusted Profit before tax:
• the Financial and Business measures (70% in total) based
on a target outcome of 100% for achieving actual and
budgeted performance which was set following a very
strong FY22 performance; and
• the Committee firmly believes that ESG metrics (the ‘how’ as
well as the ‘what’ and representing 30% of the total) plays
an important role within the annual bonus scorecard to help
continuous compounding improvement in this area.
The Committee undertook a review of outcome against all
bonus metrics, both quantitative and qualitative.
As Shareholders will be aware this was a difficult year for
many asset managers but the Committee considered that
no adjustments should be made to the Financial metrics on
account of difficult trading conditions. However, it did exercise
its judgement to include performance fees in to the adjusted
profit metric and will do so consistently in the scorecard for the
future. The principal reasoning behind this decision is:
• performance fees are included in the workforce bonus pool
and there has been great focus on the alignment of Executive
Director pay with that of Senior management and the rest of
the workforce over the year;
• with the acquisition of the Majedie business performance
fees have become relatively more important to the business
as a whole and as business as usual are included in the
normal budgetary process; and
• analysts’ consensus projections for Adjusted profit before tax,
and against whom the Committee ‘cross checks’ to ensure
the Financial metrics are sufficiently stretching, routinely
include performance fees in their numbers.
The outturn for the Financial Metrics, as fully disclosed later, was
10% vesting compared with the maximum opportunity of 70%.
For the ESG metrics the Committee assessed performance
overall as above target, once again as fully disclosed later
in the Report. However, given the overall disappointing
Financial performance in the year the Committee decided to
use its discretion to limit the vesting of the ESG metrics at the
achievement of an ‘on target’ outcome. This produces a vesting
of 15% compared with the maximum opportunity of 30%.
112 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
GOVERNANCE In summary, the vesting of the annual bonus for both John Ions
and Vinay Abrol will be at a level of 25% of the maximum
opportunity.
The cash element of the bonus is restricted to 50% with the
remaining 50% deferred into a range of Liontrust Funds which
the Committee believes aligns the Executive Directors with the
experience of those who invest in our funds.
In order to satisfy itself further that the outturn of the annual bonus
for 2023 was appropriate the Committee referenced that
• there was no adjustment necessary when considering the
overlay of risk management, compliance, conduct and
personal performance;
• aggregate annual bonus for all staff, including the Executive
Directors, for the financial year ended 31 March 2023 has
decreased. The pool is this year 12.5% of pre-cash bonus
Adjusted Profit before tax (2022: 20.5%);
• annual bonus for the Executive Directors as a percentage of
the aggregate annual bonus pool for all staff (including fund
managers) significantly decreased by 76% this year, at 1.6%
for the financial year ended 31 March 2023 (2022: 6.6%),
with 1.0% allocated to John Ions (2022: 4.3%) and 0.6% to
Vinay Abrol (2022: 2.3%);
• the annual dividend for the year to 31 March 2023 has
been maintained; and
• the outturn for the Executive Directors was at the lower
end when benchmarked with our peers notwithstanding
that the financial result for the year was ahead of market
expectations.
In summary our wider stakeholders including the entire
workforce and our Shareholders received a greater share of
the earnings this year relative to the Executive Directors.
LTIP
The FY20 LTIP award vested in the period with 58.3% of
awards vesting. See section 3.1 for further information.
Fixed remuneration in 2024
Fixed remuneration under the DRP for the Executive Directors
is capable of rising in line with that of the wider workforce.
In recognition of the broader, societal context for pay awards
the Committee resolved to increase base pay for the Executive
Directors at a rate which is materially lower (6%) than for staff
generally (11%) and can be summarised as follows:
• salary for John Ions and Vinay Abrol to increase to £583,600
and £445,600 respectively for the financial year ending
31 March 2024; and
• pension/cash payments in lieu of pension for the Executive
Directors to be the same as and in no case higher than for
the majority of the workforce. The Company is in the process
of aligning upwards pension contributions from at least 10%
to at least 12.5%, recognising the importance for its staff
of long term retirement savings and the crucial role that
asset managers should play in that process. Therefore the
pension/cash in lieu of pension for the Executive Directors
will increase from 10% to 12.5% in line with the workforce.
Annual bonus for 2024
The Committee intends to operate the assessment of annual
bonus for 2024 on a very similar basis to 2023 with 70%
of the scorecard focused on Financial Metrics split between
Adjusted operating profit (including performance fees) of
50%, Distribution effectiveness (flows) of 10%; and investment
performance of 10%.
There will continue to be metrics to ensure that the Executive
Directors lead and oversee the components of ESG what
we know as “Responsible Capitalism” in the business. In
particular:
• Liontrust is a mainstream fund manager with multiple
investment teams and not just one that focuses on Responsible
Capitalism. We will measure how investment teams, as well
as our own business, have made progress on integrating
and evidencing their Responsible Capitalism practices.
• There will be metrics around diversity and inclusion and in
particular building of the results of our workforce engagement
survey and further work on the outcomes of coaching and
development programmes.
• Further work to communicate the ‘reward deal’ with the
workforce particularly as regards past and any future
acquisitions.
LTIP for 2024
The LTIP award for the Executive Directors for the year ending
31 March 2024, in line with the DRP, will once again be a
fixed number of shares and can be summarised as follows:
• LTIP awards for the financial year ended 31 March 2024
of 153,130 and 112,295 for John Ions and Vinay Abrol
respectively. Note that no adjustment has been made for the
relative recent weakness of the share price and the awards
represent for John Ions a multiple of c.200% of base pay. This
supports the Committee’s view that the LTIP is about the long
term transformation of the business in the next age of Liontrust
and certainly does not reward short term volatility
• The Group will make these awards as soon as possible
after the announcement of the Group’s annual results. The
performance criteria for these LTIP awards will be fully
measurable being earnings per share (60%) and relative TSR
growth (40%).
113
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023GOVERNANCE DEVELOPMENTS IN LEGISLATION AND GOVERNANCE
The DRP, as approved by shareholders at our February 2022
General Meeting, and subsequently amended following
consultation, remains appropriate and no changes are
proposed this year.
The Annual Report on Remuneration is subject to an advisory
shareholder vote at our 2023 Annual General Meeting.
Additionally, the Committee has considered the various
requirements under the latest Corporate Governance Code in
relation to justification of Executive Director pay in the context
of strategic rationale, internal and external measures, and
Company-wide pay policies. I am satisfied that the provisions
of paragraph 41 of the code have been met and, in particular,
that the policy has operated this year as intended in terms of
the Group’s performance and following the decisions of the
Committee as to quantum.
The Committee specifically considered progress across the
Company in gender equality when assessing bonus outcomes.
The Committee is using the Workforce Advisory Forum to
engage with the wider staff group, generally and specifically,
on how Executive remuneration aligns with the wider company
pay policy. I can also confirm that I meet regularly with the
Workforce Advisory Forum to present and discuss remuneration
matters. Further details on our progress on workforce engagement
is contained within the Nomination Committee report.
Mandy Donald, the Non-executive Director responsible for
workforce engagement provides valuable feedback to the
Committee on engagement matters.
SHAREHOLDER ENGAGEMENT
I have always welcomed feedback from our shareholders
on all aspects of Executive Director remuneration and will
be continuing engagement with them in the run up to the
AGM and beyond. I believe changes through iteration is a
strength not a weakness. We hope that we will earn your
support in respect of our Remuneration Report for 2023 at the
forthcoming AGM.
THE ROLE OF THE COMMITTEE AND ITS COMPOSITION
The Committee is charged with determining in remuneration
policy for, and setting pay and other benefits of, the Executive
Directors of the Company and reviewing pay and other
benefits of the Group’s workforce.
All of its recommendations are referred to the Board. Any
Director, who has an interest in the matter which is the subject of
a recommendation to the Board, abstains from the Board’s vote
in relation to that matter and takes no part in its deliberations.
The Committee may use external advisors if required. The terms
of reference of the Committee, which explains its role and the
authority delegated to it by the Board, are available on the
Company’s website or upon request from the Company Secretary.
George Yeandle
Chair of the Remuneration Committee
20 June 2023
Annual report on remuneration
This remuneration report details the remuneration outcomes for the financial year ended 31 March 2023 across Liontrust and
specifically for the Executive and Non-executive Directors and compares them to remuneration across the wider group, remuneration
outcomes for the previous financial year; and proposals for Executive remuneration for the forthcoming financial year. The Directors’
remuneration for the year ended 31 March 2023 was managed in line with the Directors’ remuneration policy (“DRP”) which was
approved by shareholders at the 2022 DRP General Meeting. Proposed remuneration for the year ended 31 March 2024 is in
accordance with the DRP approved at the February 2022 General Meeting.
The report sets out:
1. Remuneration outcome for the year to 31 March 2023 –
including the context for the Directors’ remuneration and
the performance metrics that the Committee considered
when setting the overall annual bonus pool.
2. Allocation of variable remuneration – information on how
the annual bonus pool awards were allocated across the
Group.
3. Deferral of variable remuneration – Directors’ deferred
remuneration rights under the LTIP and DBVAP.
4. Proposed remuneration for the financial year ending 31
March 2024.
5. Returns to shareholders and Executive remuneration –
returns over the past 10 years are compared with the total
remuneration of the Chief Executive over the same period.
6. Directors’ shareholdings – the share interests of Directors
and their connected persons.
7. Other disclosures and historical information.
8. Directors’ remuneration policy.
To aid the reader of this report the term “salary” is used as a collective term for employee salary and member fixed
allocation; and “annual bonus” to refer to annual bonus for employees and variable allocation for members.
114 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
GOVERNANCE 1. REMUNERATION OUTCOME FOR THE YEAR TO 31 MARCH 2023
1.1 Single total figure for remuneration
Executive Directors (audited information)
A. Fixed pay
Base salary
Benefits in kind -private medical insurance
Cash in lieu of pension
Total Fixed pay
B. Annual Bonus
Cash bonus
DBVAP
Total Annual Bonus
C. Total pay for the financial year
Sub-total (A+B)
D. Vesting of LTIP awards
Base value element of vested LTIP awards
Share price appreciation and dividend equivalent elements on
vested LTIP awards
Total LTIP awards vesting
E. Other
SIP matching shares
Total Other
Total remuneration (C+D+E)
Of which:
Total variable remuneration (B + D)
Jon Ions
Year to 31 March
Vinay Abrol
Year to 31 March
2023
£’000
2022
£’000
2023
£’000
550
4
55
609
310
310
620
348
4
35
387
870
1,915
2,785
420
5
42
467
184
184
368
2022
£’000
328
5
33
366
786
786
1,572
1,229
3,172
835
1,938
508
192
700
4
4
863
1,975
2,838
4
4
334
127
461
4
4
569
1,301
1,870
4
4
1,933
6,014
1,300
3,812
1,320
5,623
829
3,442
115
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023GOVERNANCE 116 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
GOVERNANCE 1.1 Single total figure for remuneration (continued)
Non-executive Directors (audited information)
Alastair Barbour
Year to 31 March
Mandy Donald
Year to 31 March
George Yeandle
Year to 31 March
Basic Non-executive Director fee
Fee for
Non-executive Chair
Fee for Senior Independent Director
Fee for Sub-committee Chair / membership:
Audit & Risk Committee
Nomination Committee
Remuneration Committee
Fee for membership of other Group
Committees
Benefits1
Total
Basic Non-executive Director fee
Fee for
Non-executive Chair
Fee for Senior Independent Director
Fee for Sub-committee Chair / membership:
Audit & Risk Committee
Nomination Committee
Remuneration Committee
Fee for membership of other Group
Committees
Benefits1
Total
2023
£’000
–
210
–
–
–
–
–
–
2022
£’000
45
65
–
–
4
–
–
–
2023
£’000
65
2022
£’000
34
2023
£’000
65
2022
£’000
45
2023
£’000
65
2022
£’000
45
–
20
5
2
17
–
–
–
8
4
4
12
–
73
–
–
–
5
20
9
–
99
–
–
4
4
8
10
–
71
210
114
109
Quintin Price2
Year to 31 March
Rebecca Shelley
Year to 31 March
Emma Howard Boyd3
Year to 31 March
2023
£’000
65
–
12
9
5
9
–
–
2022
£’000
18
2023
£’000
65
–
–
2
2
2
–
–
–
–
9
5
9
5
–
2022
£’000
8
–
–
1
1
1
–
–
–
–
3
3
3
7
–
50
100
24
93
11
–
–
9
5
9
18
–
106
1Non-executive Directors are entitled to the reimbursement of expenses in relation to the performance of their duties, such expenses
are reported above grossed up for income tax and national insurance.
2Resigned 23 March 2023.
3Resigned 23 March 2023.
117
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023GOVERNANCE 1.2 Annual bonus
The annual bonus for the financial year ended 31 March 2023 were based on the following key performance metrics. The
performance outcomes for each key performance indicator are also shown below:
Performance Metric
Weighting
Threshold
Target
Max
Actual
Weighted
Result %
Notes
Financial Measures (70%)
Change in Adjusted Profit Before Tax (excluding
Performance fees profits) and performance fees
above 3Y average
Distribution effectiveness - Net flows compared to
budget of £900 million
Investment performance, percentage of AuM
over 1, 3 and 5 years in 1st or 2nd Quartile).
Weighted 30% for 1Y, 40% for 3Y and 30% for
5Y performance.
ESG inc Risk, Personal Performance Measures (30%)
40.0%
9.9%
11.0%
12.1%
(12%)
0.0%
A negative return due to markets and outflows, so scores 0%.
10.0%
10%
20%
30%
103%
10.0%
The Committee used its judgment to amend Adjusted Profit to include Performance fee profits when comparing with the budgeted forecast for
the Group for the financial year ended 31 March 2023 .The Adjusted profit before tax was £87.1m versus the forecast of £94.6m. The
performance was 92% so the result was between the threshold and target with the outcome being assessed as 10%.
10.0%
90%
100%
110%
(592%)
0.0%
Net outflows for the financial year versus a budget for net inflows, so scores 0%.
10.0%
67.5%
75%
82.5%
44%
0.0%
It continued to be a very difficult year for Quality Growth and short term performance remained challenging, so scores 0%.
Ensuring ESG considerations are more fully
integrated into our mainstream fund management
processes (10%)
10.0%
N/a
N/a
N/a
80%
15.0%
Supporting joined up efforts to increase the
group’s diversity and inclusiveness (10%)
10.0%
N/a
N/a
N/a
75%
See comments
Align Executive Director and broader workforce
pay under the new DRP (10%)
10.0%
N/a
N/a
N/a
50%
See comments
Totals
100.0%
25.0%
John Ions and Vinay Abrol championed the need to evidence the work that the individual investment teams do in integrating ESG
considerations and showing the link (where possible) between these considerations and investment decisions. We have produced 2
Responsible Capitalism reports in the past year which lay out these processes and highlight the ESG components of each 4 of the (now) 7
teams have signed up some or all of their funds to the group’s net zero pledge.
John Ions and Vinay Abrol have been integral in the assessment of technology to enable the investment teams to store information for audit
and reporting purposes including both a Research Management System and capabilities for investment teams to trade in environments where
Fund Managers would be able to understand the carbon impacts of their investment decisions (on WACI) before trades are actually instructed.
Actual outcome was 80%, but given the outcome on Financial Measures the Committee used its discretion and reduced the outcome to 50%,
John Ions and Vinay Abrol have both personally been very active in promoting D&I this year. Vinay has sponsored educational sessions,
coaching, guest speakers, and other opportunities for all staff to learn more about D&I. The impact of this leadership ‘from the top’ has been
critical in raising staff perception of the importance of D&I at Liontrust as evidenced by the improved results of the latest workforce engagement
so scores 15%
survey
Actual outcome was 75%, but given the outcome on Financial Measures, as above, this was reduced to 50%, so scores 5%
The remuneration arrangements for the senior leadership team has been amended and aligned with the Directors’ Remuneration Policy with
the introduction of a cap on Bonuses, and mandatory deferral with a a bias toward long term incentivisation. The percentage of variable
remuneration deferred is at least 50%. Pension contributions/payments in lieu for all staff has been increased from at least 10% to at least
12.5% with the medium term aim to standardise the percentage for all staff (current range is 10% to 17%).
Actual outcome was 50%, and given the outcome on Financial Measures, this was held at 50%, so scores 5%
118 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
GOVERNANCE Performance Metric
Weighting
Threshold
Target
Max
Actual
Notes
Weighted
Result %
Financial Measures (70%)
Change in Adjusted Profit Before Tax (excluding
Performance fees profits) and performance fees
above 3Y average
Distribution effectiveness - Net flows compared to
budget of £900 million
Investment performance, percentage of AuM
over 1, 3 and 5 years in 1st or 2nd Quartile).
Weighted 30% for 1Y, 40% for 3Y and 30% for
5Y performance.
ESG inc Risk, Personal Performance Measures (30%)
40.0%
9.9%
11.0%
12.1%
(12%)
0.0%
A negative return due to markets and outflows, so scores 0%.
10.0%
10%
20%
30%
103%
10.0%
The Committee used its judgment to amend Adjusted Profit to include Performance fee profits when comparing with the budgeted forecast for
the Group for the financial year ended 31 March 2023 .The Adjusted profit before tax was £87.1m versus the forecast of £94.6m. The
performance was 92% so the result was between the threshold and target with the outcome being assessed as 10%.
10.0%
90%
100%
110%
(592%)
0.0%
Net outflows for the financial year versus a budget for net inflows, so scores 0%.
10.0%
67.5%
75%
82.5%
44%
0.0%
It continued to be a very difficult year for Quality Growth and short term performance remained challenging, so scores 0%.
Ensuring ESG considerations are more fully
processes (10%)
integrated into our mainstream fund management
10.0%
N/a
N/a
N/a
80%
15.0%
Supporting joined up efforts to increase the
group’s diversity and inclusiveness (10%)
10.0%
N/a
N/a
N/a
75%
See comments
Align Executive Director and broader workforce
pay under the new DRP (10%)
10.0%
N/a
N/a
N/a
50%
See comments
Totals
100.0%
25.0%
John Ions and Vinay Abrol championed the need to evidence the work that the individual investment teams do in integrating ESG
considerations and showing the link (where possible) between these considerations and investment decisions. We have produced 2
Responsible Capitalism reports in the past year which lay out these processes and highlight the ESG components of each 4 of the (now) 7
teams have signed up some or all of their funds to the group’s net zero pledge.
John Ions and Vinay Abrol have been integral in the assessment of technology to enable the investment teams to store information for audit
and reporting purposes including both a Research Management System and capabilities for investment teams to trade in environments where
Fund Managers would be able to understand the carbon impacts of their investment decisions (on WACI) before trades are actually instructed.
Actual outcome was 80%, but given the outcome on Financial Measures the Committee used its discretion and reduced the outcome to 50%,
so scores 15%
John Ions and Vinay Abrol have both personally been very active in promoting D&I this year. Vinay has sponsored educational sessions,
coaching, guest speakers, and other opportunities for all staff to learn more about D&I. The impact of this leadership ‘from the top’ has been
critical in raising staff perception of the importance of D&I at Liontrust as evidenced by the improved results of the latest workforce engagement
survey
Actual outcome was 75%, but given the outcome on Financial Measures, as above, this was reduced to 50%, so scores 5%
The remuneration arrangements for the senior leadership team has been amended and aligned with the Directors’ Remuneration Policy with
the introduction of a cap on Bonuses, and mandatory deferral with a a bias toward long term incentivisation. The percentage of variable
remuneration deferred is at least 50%. Pension contributions/payments in lieu for all staff has been increased from at least 10% to at least
12.5% with the medium term aim to standardise the percentage for all staff (current range is 10% to 17%).
Actual outcome was 50%, and given the outcome on Financial Measures, this was held at 50%, so scores 5%
119
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023GOVERNANCE The Committee also considered that no further adjustments up or down should be made on account of the risk and personal
performance moderator.
Executive Director Key performance in the financial year ended 31 March 2023
John Ions
John Ions has led the senior leadership team to achieve strong financial performance in a very difficult environment. Although
Adjusted Profit before tax (excluding performance fees) decreased by 12% compared to last year, performance fee revenues
of £18.5 million (2022: £12.5 million) were earned. Net flow performance was disappointing at £4.8 billion of net
outflows. However, gross flows have remained strong and sales engagement with clients has been excellent and Liontrust’s
marketing team did an excellent job in promoting the brand, with Liontrust being the 6th most recognisable brand in the UK.
Alongside Vinay Abrol, successfully led project to integrate Majedie Asset Management Limited, including the alignment of
outsourced administration arrangements onto our Target Operating Model.
Alongside Vinay Abrol, has been hugely active in promoting D&I this year.
Alongside Vinay Abrol, led external shareholder relations, with excellent positive feedback from these meetings, and
developing a strong relationship with our larger shareholders.
Always ensured that risk and compliance were important factors when managing the Group, including meeting with the Chief
Risk Officer, Chief Compliance Officer and Internal Audit on a regular basis.
Vinay Abrol
Vinay Abrol has shown strong leadership of the Finance, Operations, Risk, Compliance, Technology & Data, Property &
Facilities, Product, Human Resources and Trading functions. Delivered budget and cost controls in the financial year and led
the Group through the annual and half-year reporting cycles.
During the year, Vinay appointed Chris Simmons as Deputy COO delegating responsibility for the HR and Company
Secretarial functions to Chris, and supported by Chris led the recruitment of a new Head of HR (Louise Dilworth) and Group
Company Secretary (Sally Buckmaster), thereby increasing diversity in the Senior Leadership Team.
Vinay Abrol has been instrumental in leading the Group’s relationships with the Financial Analysts, with regular meetings
with the analysts from Singer Capital Markets, Panmure Gordon, Numis, Barclays and Berenberg. During the year Barclays
initiated coverage bringing analyst coverage back to six firms, following KBW’s decision to cease coverage during the year.
Alongside John Ions, has been hugely active in promoting D&I this year. Vinay has sponsored educational sessions, coaching,
guest speakers, and other opportunities for all staff to learn more about D&I. The impact of this support has been critical
in raising staff perception of the importance of D&I at Liontrust. Vinay has also chaired the Diversity & Inclusion Committee
throughout the year.
Alongside John Ions, successfully led project to integrate Majedie Asset Management Limited, including the alignment of
outsourced administration arrangements onto our Target Operating Model.
Alongside John Ions, led external shareholder relations, with excellent positive feedback from these meetings, and developing
a strong relationship with our larger shareholders.
Always ensured that risk and compliance were important factors when managing the Group, including meeting with the Chief
Risk Officer, Chief Compliance Officer and Internal Audit on a regular basis.
This bonus pool for the Executive Directors translates into
individual annual bonuses to the Executive Directors of
between 88% and 113% of base remuneration (2022: 480%
and 800%). The Committee also set the level of deferral into
Group managed funds at 50% for John Ions (2022: 69%)
and 50% for Vinay Abrol (2022: 50%) over the period 20
June 2023 to 1 April 2023 to 1 April 2026; and therefore
linked to the performance of the relevant Liontrust funds. The
vesting of deferred awards are not subject to any performance
condition but are subject to continuous service conditions and
also to malus and claw back provisions.
The level of deferral means that the cash bonus/variable
allocation for John Ions and Vinay Abrol is 56% and 44% of
base remuneration respectively (2022: 250% and 240%).
1.3 Malus and claw back
For the annual bonus in respect of the financial year ended 31
March 2016 and onwards, malus and claw back provisions
apply whereby the payment of such cash bonus, and the
unvested amount deferred into Group managed funds can be
reduced, withheld or reclaimed in the exceptional event of:
misstatement or misleading representation of performance, a
significant failure in risk management and control, or serious
misconduct for which the individual is personally responsible
or directly accountable. Malus provisions apply for a period
from the date of grant to the relevant vesting date of the relative
award and claw back provisions apply for a period of 2 years
from date of vesting of the relevant award.
120 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
GOVERNANCE For the LTIP awards, claw back and malus provisions will
apply whereby the LTIP awards can be reduced, withheld
or reclaimed in the exceptional event of: misstatement or
misleading representation of performance, a significant
failure in risk management and control, or serious misconduct
for which the individual is personally responsible or directly
accountable.
1.4 Pensions (audited information)
All staff (including Executive Directors) are eligible to receive
pension contributions of at least 10% of base salary (rising to
12.5% from July 2023).
None of the Executive Directors have a prospective entitlement
to a defined benefit pension by reference to qualifying service.
As stated in last years Remuneration Report, The Committee
clarified its approach set out in the current DRP with regard to the
provision of pensions to the Executive Directors. The shareholders
approved the current DRP which is fully compliant with corporate
governance best practice in that the Executive Directors may
participate in pension arrangements, or receive cash in lieu, which
are fully aligned with that of the Liontrust workforce. Employees
of Liontrust have flexibility and choice, in certain circumstances,
over the balance between employer pension contributions and
cash in lieu, with options to take cash, some or all of the amount
the Company would otherwise contribute to the pension plan.
The Company is in the process of aligning upwards pension
contributions from 10% to 12.5%, recognising the importance for
its workforce of long term retirement savings and the crucial role
that asset managers should play in that process. Therefore the
pension/cash in lieu of pension for the Executive Directors will
increase from 10% to 12.5% in line with the workforce.
2. ALLOCATION OF ANNUAL VARIABLE REMUNERATION
Annual bonus for the Executive Directors as a percentage of the aggregate annual bonus pool for all staff (including fund managers)
has decreased again this year, at 4.3% for the financial year ended 31 March 2023 (2022: 6.6%), with 2.7% allocated to John
Ions and 1.6% to Vinay Abrol.
2.1 Percentage change in Directors’ remuneration
The percentage change in all Directors’ pay (defined for these purposes as salary, fees for non-Executives, taxable benefits, annual
bonus and DBVAP awards in respect of the relevant year) between the year ended 31 March 2023 and the prior year and the
same information, on an averaged basis, for all staff (excluding the Chief Executive and Directors) is shown in the table below:
Directors percentage
change year ended
31 March 2023
Directors percentage
change year ended
31 March 2022
All staff year ended
31 March 20231
All staff year ended
31 March 2022
Salary
Benefits3
Bonus
67%2
55%
-77%
2%
0%
0%
11%
14%
-38%
12%
7%
103%
1Based on a consistent population of the workforce who received a full year’s remuneration in each year
2Increase due to the implementation of the 2022 DRP and realignment of Non-executive Director fees in the period (see 4.1)
3Benefits comprise private medical insurance, pension contributions and other sundry benefits.
121
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023GOVERNANCE 2.2 Chief Executive pay ratio
The table below shows the ratio of Chief Executive’s pay to Lower quartile, median and upper quartile for the workforce:
Ratio for year ended
31 March 2023
Ratio for year ended
31 March 2022
Ratio for year ended
31 March 2021
Ratio for year ended
31 March 2020
Lower quartile ratio
Median ratio
Upper quartile ratio
21x
13x
7x
69x
39x
16x
84x
45x
22x
78x
43x
18x
Based on full time equivalent staff
The Group uses ‘Option A’ to calculate the Chief Executive pay ratio. This method uses the individual pay and benefits of all UK
staff, and is therefore consistent and comparable with the approach that must be used for the CEO single figure. It allows a like-
for-like comparison to take place between the pay data of the CEO and workforce at the lower, median and upper quartiles. For
the purpose of this disclosure, the Company has chosen 31 March 2022 as the reference date on which the pay for all staff was
calculated, consistent with our approach in prior years.
CEO single figure
Workforce single figure
Workforce salary component
Lower quartile
£’000
–
93
64
Median
£’000
3,034
145
100
Upper quartile
£’000
–
268
140
2.3 Relative importance of spend on pay
The following chart shows the Group’s Adjusted Profit before tax (excluding and including performance fee profits), total workforce
remuneration and dividends declared on Ordinary shares for the financial year ended 31 March 2023 and 31 March 2022.
Adjusted profit before tax
– excl. performance fee
profit (£’000)*
Adjusted profit
before tax (£’000)*
Total workforce
renumeration (£’000)
Dividend spend (£’000)
0
20,000
40,000
60,000
80,000
100,000
*These are alternative performance measures (‘APM’). Note 7 on page 160.
2022
2023
122 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
GOVERNANCE 2.4 Wider workforce remuneration and engagement
The Committee is closely involved in considering the
remuneration policies and levels of the wider Liontrust
workforce. The Committee’s work involves debate, discussion
and ultimate approval of the Group-wide annual bonus/
variable allocation and long-term incentives; as well as
the salary/fixed allocation increases for all staff, with
consideration given to the amounts and proportions of total
remuneration allocated to different areas of the business.
Part of this discussion requires an assessment of the financial
performance of the business, including Adjusted Profit before
tax, net flows and fund performance, all of which are also
key metrics under the bonus/variable allocation scorecard for
Executive Directors.
One of the recurring exercises undertaken by the Committee
on an annual basis is a review of external compensation
benchmarking data, giving an overview of fixed and total
remuneration levels for all staff relative to the wider market.
This data allows the Committee to challenge remuneration
decisions at a more granular level and make proposals to the
Executive Directors in respect of an upcoming remuneration
review round. The Committee approves all compensation for
Code Staff, including for fund managers. Whilst this process
is a regulatory driven requirement, it involves a detailed and
robust discussion. The Committee is also provided with data
illustrating the mean and median annual bonus levels and salary
increase percentage split by gender for the current and previous
financial year, in order that it can also analyse the outcomes
from a gender pay perspective.
During the financial year ended 31 March 2021, Liontrust
established a workforce advisory group, whose Chair meets
with the Committee Chair to discuss remuneration related
matters. The group has been reconstituted as the Workforce
Advisory Forum (WAF) in 2023. This engagement is Liontrust’s
method for ensuring a formal dialogue exists between the
workforce and the Committee. The group has been renamed the
Workforce Advisory Forum and reconstituted in the year to 31
March 2023. It provides the opportunity for all staff to engage
with the Committee via the WAF on any relevant workforce
remuneration matters.
Collectively this work helps demonstrate the Committee’s
considerations in appropriately balancing the remuneration
outcomes for the wider employee and member population with
its decisions regarding Executive Director Remuneration.
One of the recurring exercises undertaken by the Committee
on an annual basis is a review of external compensation
benchmarking data, giving an overview of fixed and total
remuneration levels for all staff relative to the wider market.
This data allows the Committee to challenge remuneration
decisions at a more granular level and make proposals to the
Executive Directors in respect of an upcoming remuneration
review round. The Committee approves all compensation for
Code Staff, including for fund managers. Whilst this process
is a regulatory driven requirement, it involves a detailed and
robust discussion. The Committee is also provided with data
illustrating the mean and median annual bonus levels and salary
increase percentage split by gender for the current and previous
financial year, in order that it can also analyse the outcomes
from a gender pay perspective.
3. DEFERRAL OF VARIABLE REMUNERATION
The significant deferral of variable remuneration (deferral of bonus and LTIP awards) is an important component of the Company’s
remuneration policy, and I am pleased to be able to confirm that John Ions and Vinay Abrol are deferring at least 79% of their
variable remuneration:
Director
John Ions
Vinay Abrol
1Awarded 23 June 2022
Type of variable remuneration
Value (£’000)
% deferred
Cash bonus
DBVAP
LTIP award FY20231
Total
Cash bonus
DBVAP
LTIP award FY20231
Total
310
310
1,439
2,059
184
184
1,056
1,424
n/a
15%
70%
85%
n/a
13%
74%
87%
123
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023GOVERNANCE 3.1 Vested LTIP Awards
Background
The LTIPs for the financial year ended 31 March 2020, which were granted on 12 August 2019, and vested on 12 August 2022,
to John Ions and Vinay Abrol over 114,206 and 75,259 Ordinary shares respectively. 66,608 shares for John Ions and 43,894
shares for Vinay Abrol vested (58.3%), with 66,605 and 43,891 Ordinary shares released on 12 August 2022.
Performance measures and vesting
Condition
Test
Result
Start of the performance period: 12
August 2019, Starting share price:
780.73p, End of the performance period:
12 August 2022.
Three-month average share price to end of
performance period is 947.6p, meaning
an annualised TSR over the period of
10.9% versus a Target of 15% so 27%
vests
Start of the performance period: 12
August 2019, with starting FTSE all share
total return index value is 7494.08 which
is the 30-day average to the day before
grant date and staring share price is
780.73p, End of the performance period:
12 August 2022.
Starting EPS (Diluted Adjusted EPS
excluding performance fees): 46.87p for
the financial year ending 31 March 2019
30-day FTSE all share total return index
value is 8131.62 and three-month
average share price is 939.22p both to
end of performance period , meaning an
annualised TSR over the period of 7.83%
versus a Target of 15% so 0% vests
Adjusted diluted EPS excluding
performance fees for the financial year
ended 31 March 2022 was 120.7p,
which is an annualised return of 37%
versus a Target of 15% so 100% vests.
% vesting
5.7%
0%
30%
Starting year for net inflows: Year ending
31 March 2019. Ending year for net
inflows: Year ending 31 March 2022.
Target net inflows of £7,136 million,
actual net inflows of £8,681 million, so
122% versus a Target of 125% so 94%
vests.
14.1%
TSR Performance (40%)
Absolute TSR performance (% growth per
annum): Below 10% per annum then nil
vests, at 10% per annum growth 10% vests
and at 15% per annum and above 100%
vests. Straight line vesting between 10% per
annum and 15% per annum growth
Relative TSR performance (% growth per
annum): Below 10% per annum then nil
vests, at 10% per annum growth 20% vests
and at 15% per annum and above 100%
vests. Straight line vesting between 10%
per annum and 15% per annum growth
EPS Performance (30%)
EPS growth per annum: Below 10% per
annum then nil vests, at 10% per annum
growth 10% vests and at 15% per annum
and above 100% vests. Straight line vesting
between 10% per annum and 15% per
annum growth
Strategic Objectives Performance
(30% or 7.5% each)
Net inflows compared to target: Below
75% of target nil vests, at 75% of target
10% vests and at 125% of target and
above 100% vests. Straight line vesting
between 75% of target and 125% per
annum growth.
Investment performance: Below 50% of
funds in 1st or 2nd quartile nil vests, at
50% of funds 10% vests and at 75% of
funds and above 100% vests. Straight line
vesting between 50% of funds and 75%
of funds
Starting year for investment performance:
Year ending 31 March 2020. Ending
year for investment performance: Year
ending 31 March 2022
1. Developing existing staff and recruiting
1. Limit senior staff losses and strengthen
new talent (25% of 7.5%).
the management team.
2. Providing the products and services that
2. Broaden the product range.
clients require (25% of 7.5%).
3. Broadening the client base in the UK
and internationally (25% of 7.5%).
4. Maintaining an appropriate risk controls
and compliance environment (25% of
7.5%).
3. Expand out multi-asset and international
franchise.
4. Strong risk controls and create a
positive compliance environment.
FY20, 83% of relevant AuMA in 1st or 2nd
quartile; FY21, 51% of relevant AuMA in
1st or 2nd quartile; FY22 20% of relevant
AUM in 1st or 2nd quartile. Average over
the period is 51% versus a Target of 75%
so 15% vests.
1. Over the period there have been
very few senior staff losses and
some good hires (e.g. Head of
Institutional Business, Head of Product
Development, Head of Portfolio & Data
Insights, Chief Technology Officer).
2. Acquired the Global Equity team as
part of Neptune acquisition; Architas
acquisition bolstered multi-asset range
and AUMA to over £6bn.
3. Over the period Multi-Asset AuMA
grew from £844m to £6,660m
(inc-Architas), international AUMA
increased from £1,649m to £2,412m
with the Majedie acquisition (nearly
4x). Overall 90%.
4. Vinay and John have maintained
appropriate risk controls, carefully
considering management decisions
in light of risk considerations, and
spending time on a very regular
basis with the Heads of Risk and
Compliance, and with Internal Audit.
98% vests
1.2%
7.3%
58.3%
124 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
GOVERNANCE Retention requirements
On vesting, 58.3% of the LTIP awards vested. The exercise price for the LTIP awards was nil pence and the exercised shares are
subject to a two year holding period.
Year ended 31 March 2023
LTIP awards
that vested
66,605
43,891
Value on grant
£507,530
£334,457
Gain result from share price appreciation and
dividend equivalent payments on vested LTIP
awards over the vesting period
£192,888
£127,121
John Ions
Vinay Abrol
Year ended 31 March 2022
John Ions
Vinay Abrol
LTIP awards that
vested
146,397
96,473
Value on grant
£863,113
£568,776
Gain result from share price appreciation and
dividend equivalent payments on vested LTIP awards
over the vesting period
£1,974,559
£1,301,222
Option exercise details (audited information)
For John Ions and Vinay Abrol, LTIP awards were exercised on 30 August 2022. The market value of:
Value on
vesting
£700,418
£461,578
Value on
vesting
£2,837,672
£1,869,998
• John Ions share options on the date of exercise were £618,671 (66,605 share options at 928.9p per share); and
• Vinay Abrol share options on the date of exercise were £407,688 (43,891 share options at 928.9p per share).
3.2 LTIP Awards for the financial year ending 31 March 2023 (audited information)
The Company’s shareholders approved the LTIP, under which awards were granted during the financial year, on 16 February
2022 and the LTIP was adopted by the Board on 24 March 2022. The rules of the LTIP state that awards may be granted to
participants within the 42-day period following the date of publication of the annual results of the Company, approval of the LTIP
by shareholders, or such other period as may be determined by the Committee in exceptional circumstances.
LTIP awards for the financial year ending 31 March 2023
Percentage LTIP
award of base
remuneration
262%
251%
LTIP awards
granted
153,130
112,295
Value on grant
Date of grant
Vesting date (subject to
performance conditions
being met)
£1,439,422
23 June 2022
£1,055,573
23 June 2022
23 June 2025
23 June 2025
John Ions
Vinay Abrol
125
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023GOVERNANCE These LTIP awards are subject to continued employment and achievement of a range of balanced and holistic performance
conditions that are linked closely to the Company’s business strategy/KPIs. The performance criteria for these LTIP awards are:
• Diluted adjusted earnings (excluding performance fees) per share (60%)
Starting EPS (Diluted Adjusted EPS excluding performance fees): 120.68p for the financial year ending 31 March 2022. End
of the performance period is 31 March 2025.
Performance will be assessed against the following targets:
EPS
Entry level performance: 8.5%
Target performance: 11%
Stretch performance: 16.75%
Vesting (% of maximum)
10%
50%
100%
There will be straight line vesting between targets.
• Relative TSR growth versus FTSE250 ex-IT (40%)
Performance will be assessed against the FTSE250 index. Performance will be assessed against the following targets:
Relative TSR growth p.a. versus FTSE250
Vesting (% of maximum)
Entry level performance: median performance
Stretch performance: upper quintile performance
10%
100%
There will be straight line vesting between targets.
4. PROPOSED REMUNERATION FOR THE FINANCIAL YEAR ENDING 31 MARCH 2024
Remuneration for the year ended 31 March 2024 has been set in accordance with the current DRP approved by shareholders at
the February General Meeting in 2022.
4.1 Annual fixed remuneration
The Committee has set the salary of the Executive Directors at £583,600 for John Ions and £445,600 for the Vinay Abrol, in
accordance with the current DRP. The salary increases place John Ions at or below the median of the FTSE 250 peer group and
below upper quartile of the peer group for the Vinay Abrol. The annual increase is 6% which is substantially less than the annual
increase for the workforce of 11%. Any salary increases in future years will be no more than the average for the wider workforce
for that year.
The Board itself determines the fees of the Non-executive Directors of the Company, each of whom abstains in respect of matters
relating to their own position. As part of the implementation of the new DRP the Board has increased the fees for the Non-executive
Directors to more closely align with the median fee structure of other FTSE 250 financial services companies.
In accordance with the latest DRP, the Non-executive Chair fee is £210,000 and the base Non-executive Director fee is £65,000
plus fees for other roles as noted below. The Non-executive Chair’s aggregate fee is capped at £210,000 and hence the Chair
waives any other fees for other roles and committees that would otherwise be payable. Non-executive directors aggregate fees
are capped at £150,000.
Role
Senior independent director
Audit & Risk Committee chair / member
Nomination Committee chair / member
Remuneration Committee chair / member
Other committees
Engagement roles
Fee
£12,000
£20,000 / £9,000
£15,000 / £5,000
£20,000 / £9,000
£9,000
£5,000
Non-executive Directors will be encouraged to use a percentage of their annual fee to purchase and hold shares in Liontrust.
126 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
GOVERNANCE 4.2 Annual bonus
Annual bonus for the financial year ending 31 March 2024 will be determined using the current DRP. In summary, this will comprise
a balanced scorecard of financial and non-financial measures including ESG, with assigned weightings; and introduction of a
minimum weighting of financial measures where financial measures will account for at least 50%. 50% will be deferred into shares
with pro-rata vesting over three years (vesting 1/3 each year) unless the Executive’s shareholding is greater than 10 times base
salary, in which case the Executive can elect to defer into funds.
4.3 LTIP awards
LTIP awards for the financial year ending 31 March 2024 will be determined using the current DRP with 153,130 nil price options
for the John Ions and 112,295 nil price options for Vinay Abrol. The performance period will be from 1 April 2023 to 31 March
2026 with performance conditions as noted below; and subject to a two year post-vest holding period:
• Diluted adjusted earnings (excluding performance fees) per share (60%)
Starting EPS (Diluted Adjusted EPS excluding performance fees): 101.39p for the financial year ending 31 March 2023. End
of the performance period is the financial year ending 31 March 2026.
Performance will be assessed against the following targets:
EPS growth p.a.
Entry level performance: 8.5%
Target performance: 11%
Stretch performance: 16.75%
Vesting (% of maximum)
10%
50%
100%
There will be straight line vesting between performance level thresholds. NIL vesting for performance below entry level.
• Relative TSR growth versus FTSE250 ex-IT (40%)
Performance will be assessed against the FTSE250 index. Performance will be assessed against the following targets:
Relative TSR growth versus FTSE250
Vesting (% of maximum)
Entry level performance: median performance
Stretch performance: upper quintile performance
10%
100%
There will be straight line vesting between entry level and stretch performance. NIL vesting for performance below entry level.
4.4 Cap on total remuneration
The Business, Energy and Industrial Strategy Committee report on Executive Pay, released in March 2020, suggested an overall
cap on total remuneration for executives in any year. Whilst not a requirement to include it currently, I can confirm that the
Committee considered introducing a cap on total remuneration, and decided against currently doing so. However, the Committee
intends to re-consider the appropriateness of implementing a total remuneration cap for a business of our size, and will update
shareholders in due course on the results of its further consideration.
127
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023GOVERNANCE 5. RETURNS TO SHAREHOLDERS AND EXECUTIVE REMUNERATION
5.1 Pay versus performance
Share price performance
The graph below illustrates the performance of the Group, based on share price returns, compared to FTSE All-Share and FTSE 250
indices, from 1 April 2012. These indices have been chosen to put the Group’s performance into the context of the overall UK stock
market, and in the context of more similar sized operating companies.
1,500%
1,000%
500%
0%
1-Apr-13
Liontrust Asset Management PLC
FTSE All-Share Index
FTSE 250
1-Apr-14
1-Apr-15
1-Apr-16
1-Apr-17
1-Apr-18
1-Apr-19
1-Apr-20
1-Apr-21
1-Apr-22
1-Apr-23
Table of historic levels of Chief Executive remuneration
The table below shows the percentage change in the Chief Executive’s remuneration package over the past ten years:
Year ended
31 Mar
2023
2022
2021
2020
2019
2018
2017
2016
2015
2014
Name
John Ions
John Ions
John Ions
John Ions
John Ions
John Ions
John Ions
John Ions
John Ions
John Ions
Single figure of total
remuneration (£’000)
Long term incentive vesting rates (as
% maximum opportunity)
1,933
6,014
6,648
4,555
4,419
2,191
1,751
1,572
1,544
2,271
58%
99%
100%
100%
100%
Nil
Nil
Nil
Nil
100%
128 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
GOVERNANCE 6. DIRECTORS’ SHAREHOLDINGS
6.1 Shareholding requirement (audited information) and Fund holding information
A key component of the Company’s remuneration policy is a shareholding requirement of 4 times salary for Executive Directors.
As at 31 March 2023 the Executive Directors and their closely associated persons held:
Executive Directors
Ordinary shares held
Vested but
unexercised options
Value at 31 Mar 2023
(£’000)
John Ions
Vinay Abrol
848,615
947,292
29,279
19,294
8,813
9,774
Multiple of salary
15x
22x
The value of the vested but unexercised options is after income tax and national insurance using basic salaries as at 1 April 2023.
6.2 Directors’ Shareholdings (audited information)
The interests of the Directors and their closely associated persons in the share capital of the Company at 31 March 2023 were
as follows:
Ordinary shares
Unvested
Ordinary
shares
Total
Ordinary
shares
Vested but
unexercised
options
Options subject
to perf. conditions
Total options over
Ordinary shares
Executive Directors
John Ions
Vinay Abrol
Non-executive Directors
Alastair Barbour
Mandy Donald
Rebecca Shelley
George Yeandle
847,811
946,488
34,175
1,579
1,544
20,000
804
804
848,615
947,292
29,279
19,294
268,238
188,148
297,517
207,442
–
–
–
–
34,175
1,579
1,544
20,000
–
–
–
–
–
–
–
–
–
–
–
–
There were the following changes to the Directors’ interests between 1 April 2023 and 20 June 2023:
Other than the above, there were no other changes.
SIP Shares (audited information)
Director
John Ions
Vinay Abrol
Awards held start of year
Awards held at the
end of the year
Number of
shares as at
1 Apr 2022
Face
value
Grant/Vesting
date
Number of
shares
granted/
(vested)
Number of
shares as at
31 Mar 2023
546
336
468
–
546
336
468
–
£3,600
30-Apr-22
(546)
£3,600
£3,600
£3,600
27-Apr-22
£3,600
30-Apr-22
468
-546
£3,600
£3,600
£3,600
27-Apr-22
468
–
336
468
468
–
336
468
468
Tax year
2019/20
2020/21
2021/22
2022/23
2019/20
2020/21
2021/22
2022/23
Earliest
vesting date
30-Apr-22
27-Apr-23
04-May-24
27-Apr-25
30-Apr-22
27-Apr-23
04-May-24
27-Apr-25
The vesting of SIP shares awarded are subject to continuous performance and claw back conditions. Vested shares may remain
in the SIP after vesting.
129
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023GOVERNANCE 6.3 Post-employment shareholding requirements
With effect from 1 April 2020, the Executive Directors will
be required to maintain their shareholding in the Company
at a level equal to the lower of the shareholding requirement
immediately prior to departure or the actual shareholding on
departure for at least two years.
7. OTHER DISCLOSURES AND
HISTORICAL INFORMATION
7.1 Remuneration Committee composition and attendance
During the year, the Committee comprised entirely independent
Non-executive Directors:
• George Yeandle (Chair)
• Mandy Donald (appointed 1 January 2023)
• Alastair Barbour
• Quintin Price (resigned 23 March 2023)
• Rebecca Shelley
• review and approval of the bonuses for the workforce
(excluding the Executive Directors) for the financial year
ended 31 March 2022;
• approval of salary changes for the senior members of the
fund management teams;
• approval of allocations under the Liontrust Company Share
Option Plan (“CSOP”) in June 2022;
• approval granting of DBVAP awards for the financial year
ended 31 March 2022;
• review and approval of the Bonus Methodology, deferral
methodology and Metrics for the financial year ending 31
March 2023;
• approval of LTIP allocation for the financial year ending 31
March 2023 for the Executive Directors and key executives;
• reviewing regular reports from HR and Compliance;
• approval of the vesting of the 2020 LTIPs granted in August 2019;
• review of proxy voting agency and shareholder comments
• Emma Howard-Boyd (resigned on 23 March 2023)
and feedback on the new DRP;
The attendance record of members of the Committee during
the year is shown in the table on page 88.
Activities during the year
In the financial year to 31 March 2023, the Committee met
seven times and discussed, amongst other things, the subjects
described below:
• approval of the 2022 Remuneration Report;
• review and approval of the bonuses for the Executive
Directors for the financial year ended 31 March 2022;
• review of bonus/remuneration capping and bonus
performance metrics for the year ended 31 March 2023;
• review of the bonus methodology, related Executive Director
remuneration and market practices on Executive Director
remuneration;
• approval of Director, workforce appraisal process for the
financial year ended 31 March 2023; and
• review and approval of relevant Group policies, in particular
the enhanced Maternity and Paternity policies.
• Approved the development of a Group SAYE scheme,
subject to shareholder approval, to be launched in the year
ended 31 March 2024.
130 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
GOVERNANCE 7.2 Service Contracts
The Director service contracts (Director appointment letter and limited liability partnership (“LLP”) Deed of Adherence) are as follows:
Director
Type of contract
Date of contract
Notice period
Executive Directors
John Ions
Director Letter of appointment
23-Jan-14
LLP membership deed of adherence
08-Jul-10
Vinay Abrol
Director Letter of appointment
23-Jan-14
LLP membership deed of adherence
08-Jul-10
Non-executive Directors
Alastair Barbour1
Mandy Donald2
Rebecca Shelley
George Yeandle
Director Letter of appointment
Director Letter of appointment
Director Letter of appointment
Director Letter of appointment
19-Nov-19
18-Jul-19
01-Nov-21
16-Dec-14
6 months
6 months
12 months
12 months
3 months
3 months
3 months
3 months
1Alastair joined the Board in April 2011 and was appointed Non-executive Chair in September 2019.
2Mandy joined the Board in October 2019.
7.3 Compensation for loss of office (audited information)
No payments for loss of office were made during the financial year ended 31 March 2023 (2022: Nil).
7.4 Payments to former Directors (audited information)
There have been no payments to former Directors and no payment for loss of office.
7.5 Dilution and employee benefit trust
Our policy regarding dilution from employee share awards and member incentivisation has been, and will continue to be, to
ensure that dilution will be no more than 10% in any rolling ten-year period.
The Committee intends to utilise the Company’s existing discretionary employee benefit trust (the “Employee Trust”) to reduce and
manage dilution.
The Employee Trust will have full discretion about the application of the trust fund (subject to recommendations from the Committee).
The Company will be able to fund the Employee Trust to acquire shares in the market and/or to subscribe for shares at nominal
value in order to satisfy option awards granted under the LTIP and Liontrust CSOP. Any shares issued to the Employee Trust in order
to satisfy awards will be treated as counting towards the dilution limit. For the avoidance of doubt, any shares acquired by the
Employee Trust in the market will not count towards these limits. Share awards under the SIP and Liontrust Company Share Option
Plan CSOP are satisfied by market purchased shares, so have no dilutive effect.
131
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023GOVERNANCE 7.6 Shareholder voting outcomes for 2022 Directors’ Remuneration Report
The table below shows the advisory vote on the 2022 Directors’ Remuneration Report at the Annual General Meeting held on 22
September 2022:
2022 Annual report on
remuneration
Votes for
%
Votes against
%
Votes withheld
23,389,659
53.54%
20,294,895
46.46%
661,795
7.7 Shareholder voting outcomes for 2022 Directors’ Remuneration Policy
The table below shows the advisory vote on the 2022 Directors’ Remuneration Report (DRP) at the Annual General Meeting held
on 16 February 2022:
Directors’ remuneration
policy
Votes for
%
Votes against
%
Votes withheld
24,896,831
54.06
21,155,267
45.94
520,989
The DRP, as approved by shareholders at our February 2022 General Meeting, remains appropriate and no changes are
proposed this year.
7.8 Advisers
The Committee invites individuals to attend meetings as it deems beneficial to assist it in reviewing matters for consideration. During
the year, these individuals included the Chair of the Company, the Chief Executive, the Chief Financial Officer & Chief Operating
Officer and the Group Company Secretary.
In the performance of its duties, the Committee can seek assistance from external advisers. At the January 2021 meeting of the
Committee the approved the appointment of PricewaterhouseCoopers LLP to conduct a review of Executive Director remuneration.
7.9 Compliance with the FCA Remuneration Code and the UK Corporate Governance Code
During the reporting period, Liontrust was subject to the FCA’s BIPRU, UCITs and AIFM remuneration codes and the Committee
ensured these were appropriately reflected in the Remuneration Policy and adhered to on an ongoing basis. As of 1st April
2022, Liontrust was no longer be subject to BIPRU remuneration requirements and instead covered by MIFIDPRU following
implementation of the FCA’s Investment Firms Prudential Regime (IFPR). The Company has followed the requirements of the UK
Corporate Governance Code.
132 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
GOVERNANCE 7.10 Historical Information
LTIP Awards (audited information)
Financial year
ended 31-Mar
Face value
Share
price
used to
determine
the award
Number of
options
held
at 1 Apr
2022
Options
forfeit
Options
granted
or exercised
Number of
options
held at
31 March
2023
Exercise
Price
End of
performance
period
Date of
grant
2018
£828,750
450.2p
36,814
(36,814)
–
Nil
22-Jun17
22-Jun20
Directors
John Ions
(in respect of
2018/19/20)
2019
£870,250
589.6p
58,558
(29,279)
29,279
Nil
26-Jun-18
26-Jun-21
(in respect of
2019/20/21)
2020
£870,250
762.0p
114,206
(47,601)
(66,605)
–
Nil 12-Aug-19 12-Aug-22
(in respect of
2020/21/22)
2021
£870,250
1410.0p
61,719
–
61,719
Nil
8-Jul-20
8-Jul-23
(in respect of
2021/22/23)
2022
£870,250
1630.0p
53,389
–
53,389
Nil
23-Jun-21
23-Jun-24
(in respect of
2022/23/24)
2023
£1,439,000
940.0p
–
153,130 153,130
Nil
23-Jun-22
23-Jun-25
(in respect of
2023/24/25)
Vinay
Abrol
2018
£546,175
450.2p
24,262
(24,262)
–
Nil
22-Jun17
22-Jun20
(in respect of
2018/19/20)
2019
£573,475
589.6p
38,588
(19,294)
19,294
Nil
26-Jun-18
26-Jun-21
(in respect of
2019/20/21)
2020
£573,475
762.0p
75,259
(31,368)
(43,891)
–
Nil 12-Aug-19 12-Aug-22
(in respect of
2019/20/21)
2021
£573,475
1410.0p
40,671
–
40,671
Nil
8-Jul-20
8-Jul-23
(in respect of
2021/21/23)
2022
£573,475
1630.0p
35,182
–
35,182
Nil
23-Jun-21
23-Jun-24
(in respect of
2022/23/24)
2023
£1,056,000
940.0p
–
112,295 112,295
Nil
23-Jun-22
23-Jun-25
(in respect of
2023/24/25)
The share price used to determine the award is the 30 day average closing share price prior to the Committee meeting that
approved the granting of the awards. Claw back and malus provisions apply, see DRP elements of reward table for further details.
133
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023GOVERNANCE LTIP Performance Conditions (audited information)
Financial year ended 31 March 2021 (in respect of
2021/22/23) granted 8 July 2020:
Absolute Shareholder Return target (20%)
Performance condition: TSR performance (% growth per
annum): Below 10% per annum then nil vests, at 10% per
annum growth 10% vests and at 15% per annum and above
100% vests. Straight line vesting between 10% per annum and
15% per annum growth.
Performance condition 2 (7.5%): Investment performance
(25% of Strategic targets portion): Below 50% of funds in 1st
or 2nd quartile nil vests, at 50% of funds 10% vests and at
75% of funds and above 100% vests. Straight line vesting
between 50% of funds and 75% of funds.
Required outcome: Starting year for investment performance:
Year ending 31 March 2021. Ending year for investment
performance: Year ending 31 March 2022.
Required outcome: Start of the performance period: on 8 July
2020, with the starting share price being 1,356.33p, which
is the 30-day average to the day before the date of grant. The
end of the performance period: 8 July 2023.
Relative Shareholder Return target (20%)
Performance condition: Relative performance vs the FTSE All-
Share Index Total Return (% growth per annum in excess of the
index return): Below 10% per annum then nil vests, at 10% per
annum growth 10% vests and at 15% per annum and above
100% vests. Straight line vesting between 10% per annum and
15% per annum growth.
Required outcome: Using the same starting price as above,
performance will be assessed against FTSE All Share Total
Return Index (starting index value 6,531.22. which is the 30-
day average to the day before the date of grant). The end of
the performance period: 8 July 2023.
EPS target (30%)
Performance condition: EPS growth per annum: Below 10%
per annum then nil vests, at 10% per annum growth 10% vests
and at 15% per annum and above 100% vests. Straight line
vesting between 10% per annum and 15% per annum growth.
Required outcome: Starting EPS (Diluted Adjusted EPS
excluding performance fees): 56.21p for the financial year
ending 31 March 2020. End of the performance period is
31 March 2023.
Strategic targets (30%)
Performance condition 1 (15%): Net inflows compared to
target (25% of Strategic targets portion): Below 75% of target
nil vests, at 75% of target 20% vests and at 125% of target
and above 100% vests. Straight line vesting between 75% of
target and 125% per annum growth.
Required outcome: Starting year for net inflows: Year ending
31 March 2021. Ending year for net inflows: Year ending 31
March 2023. Actual target for net inflows are commercially
sensitive and will disclosed after initial vesting in the 2023
Annual Report on Remuneration.
Performance condition 3 (7.5%): Other strategic targets.
Financial year ended 31 March 2022 (in respect of
2022/23/24) granted 23 June 2021:
Absolute Shareholder Return target (20%)
Performance condition: TSR performance (% growth per
annum): Below 10% per annum then nil vests, at 10% per
annum growth 10% vests and at 15% per annum and above
100% vests. Straight line vesting between 10% per annum and
15% per annum growth.
Required outcome: Start of the performance period: on 23
June 2021, with the starting share price being 1559.53p,
which is the 30-day average to the day before the date of
grant. The end of the performance period: 23 June 2024.
Relative Shareholder Return target (20%)
Performance condition: Relative performance vs the FTSE All-
Share Index Total Return (% growth per annum in excess of the
index return): Below 10% per annum then nil vests, at 10% per
annum growth 10% vests and at 15% per annum and above
100% vests. Straight line vesting between 10% per annum and
15% per annum growth.
Required outcome: Using the same starting price as above,
performance will be assessed against FTSE All Share Total
Return Index (starting index value 7,862.94 which is the 30-
day average to the day before the date of grant). The end of
the performance period: 23 June 2024.
EPS target (30%)
Performance condition: EPS growth per annum: Below 10%
per annum then nil vests, at 10% per annum growth 10% vests
and at 15% per annum and above 100% vests. Straight line
vesting between 10% per annum and 15% per annum growth.
Required outcome: Starting EPS (Diluted Adjusted EPS
excluding performance fees): 79.67p for the financial year
ending 31 March 2021. End of the performance period is
31 March 2024.
134 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
GOVERNANCE Strategic targets (30%)
Performance condition 1 (15%): Net inflows compared to
target (25% of Strategic targets portion): Below 75% of target
nil vests, at 75% of target 20% vests and at 125% of target
and above 100% vests. Straight line vesting between 75% of
target and 125% per annum growth.
Required outcome: Starting year for net inflows: Year ending
31 March 2022. Ending year for net inflows: Year ending 31
March 2023.
Performance condition 2 (7.5%): Investment performance
(25% of Strategic targets portion): Below 50% of funds in 1st
or 2nd quartile nil vests, at 50% of funds 10% vests and at
75% of funds and above 100% vests. Straight line vesting
between 50% of funds and 75% of funds.
Required outcome: Starting year for investment performance:
Year ending 31 March 2022. Ending year for investment
performance: Year ending 31 March 2023.
Performance condition 3 (7.5%): Other strategic targets.
Required outcome: Actual target for other strategic objectives
are commercially sensitive and will disclosed after initial
vesting in the 2024 Annual Report on Remuneration. However,
include objectives in relation to personal performance, talent
development, product, risk management, compliance and
promoting a compliant culture; and improving gender diversity
in the business.
Details of the awards granted on 23 June 2022 for the
financial year ended 31 March 2023 are on page 133.
DBVAP Awards (audited information)
Directors
John Ions
Vinay Abrol
Financial year
ended 31-Mar
Basis of award
% of annual bonus
2020
(in respect of 2019)
2021
(in respect of 2020)
2022
(in respect of 2021)
2023
(in respect of 2022)
2020
(in respect of 2019)
2021
(in respect of 2020)
2022
(in respect of 2021)
2023
(in respect of 2022)
61%
80%
69%
69%
50%
80%
69%
50%
Face value
Issue date
Exercise dates
£870,000
27 June 2019
27 June 2020/21/22
£1,392,000
8 July 2020
8 July 2021/22/23
£1,915,000
23 June 2021
23 June 2022/23/24
£1,915,000
22 June 2022
22 June 2023/24/25
£492,000
27 June 2019
27 June 2020/21/22
£786,000
8 July 2020
8 July 2021/22/23
£1,085,000
23 June 2021
23 June 2022/23/24
£786,000
22 June 2022
22 June 2023/24/25
The DBVAP awards nil price options over shares/units in a portfolio of Liontrust Group managed funds. The share/unit price used
to determine the number of shares/units which shall be subject to the option grant is calculated using the unit price on the date of
grant. The portfolio of funds each year is determined by the Committee. A minimum of 50% of the annual bonus is deferred into
the DBVAP scheme with higher levels of deferral at the discretion of the Committee. No further performance conditions apply to
DBVAP awards as in determining the original annual bonus, the Committee is satisfied that performance objectives have been met.
One third of the awards are exercisable on the exercise dates noted.
135
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023GOVERNANCE 8. DIRECTORS’ REMUNERATION POLICY
This section of the Remuneration Report provides an overview of the key remuneration elements in place for Executive Directors.
After the support received from shareholders at the February 2022 General Meeting at which the revised Directors’ Remuneration
Policy (the “DRP”) was approved, we have not made any changes to our DRP and as such remain bound by the DRP. We have not
reproduced the full DRP in this report. The summary below presents our approved Elements of Reward table for Executive Directors’
and Non-executive Directors’ for reference. A copy of our full DRP as approved by shareholders can be found in the February 2022
Notice of General Meeting, available on our website: www.liontrust.co.uk in the Investor Relations/Governance/Governance
Policies section.
8.1 Elements of Reward
The following table summarises each of the elements of Liontrust’s total compensation package and the ongoing remuneration
policy for the Executive Directors:
Objective and Link to strategy
Operation
Maximum opportunity
Performance measures and assessment
Base salary
To provide a satisfactory base salary within a total
package comprising base salary and bonus.
Annual bonus
The level of base salary reflects the value of the
individual, their role, skills and experience. It is also
designed to attract and retain talent in the market in
which the individual is employed and/or a member.
The annual bonus rewards good performance of the
Group and individual Executive Directors and is based
on a balanced scorecard of financial and non-financial
measures which align with the performance and delivery
of annual objectives.
Deferral ensures a link to longer term performance and
risk management and aligns the interests of Executive
Directors with those of shareholders.
Salaries are reviewed annually and become effective
in April taking account of market levels, corporate
performance, individual performance subject to the
maximum increase set out on the right.
Reference is made to the median level within the FTSE 250
and FTSE 250 FS.
Executive Directors are eligible to participate in the annual
bonus at the discretion of the Committee.
The performance period for the annual bonus will be 1
April - 31 March each year.
Performance measures and weightings are determined
annually but will include a mix of financial and non-
financial measures.
Awards may be deferred into Liontrust shares and/or funds.
Deferral will be in line with current regulatory landscape,
with a minimum 50% deferral, vesting annually over
three years (subject to a continuing employment and/or
membership requirement).
Deferral will automatically be made into Liontrust shares
unless the shareholding is greater than 1,000% of base
salary in which case, executives can elect to defer into
funds.
Where required by regulation, the element of the bonus
deferred into shares and/or funds may be subject to a
retention period after the awards vests.
Dividend equivalents may be awarded on deferred shares
in respect of dividends paid during the deferral period.
The Committee will ensure that the percentage of any annual
Not applicable.
increases in base salary will be no more than the average
percentage increase for the wider workforce for that year.
Chief Executive: Maximum award is 450% of base salary.
Awards are subject to continued employment and a balanced
CFO/COO: Maximum award is 350% of base salary.
scorecard of measures, with assigned weightings and targets set each
year. A mix of financial and non-financial criteria will be used each year
and may include financial, strategic, operational and ESG measures.
Financial measures will account for at least 50% of the annual bonus.
Payout at target performance will be set at 50% of maximum award
while payout at entry level performance will be set at 10% of maximum
award.
Individual risk and compliance behaviour is also considered in detail for
relevant roles and factored into the assessment of performance and the
determination of the bonus awarded
Discretion may be exercised in cases where the Committee believes
that the bonus outcome is not a fair and accurate reflection of business
performance. The exercise of this discretion may result in a downward
or upward adjustment in the amount of the bonus payout resulting from
the application of the performance measures. Any adjustments will be
disclosed in the relevant annual report.
The Committee also retains discretion in exceptional circumstances to
change performance measures and targets part-through a financial year
if there is a significant and material event which causes the Committee
to believe the original measures are no longer appropriate.
Any adjustments of or discretion applied by the Committee will be fully
disclosed in the following year’s Remuneration Report.
136 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
GOVERNANCE Objective and Link to strategy
Operation
Maximum opportunity
Performance measures and assessment
Base salary
To provide a satisfactory base salary within a total
Salaries are reviewed annually and become effective
package comprising base salary and bonus.
The level of base salary reflects the value of the
individual, their role, skills and experience. It is also
in April taking account of market levels, corporate
performance, individual performance subject to the
maximum increase set out on the right.
designed to attract and retain talent in the market in
Reference is made to the median level within the FTSE 250
which the individual is employed and/or a member.
and FTSE 250 FS.
The Committee will ensure that the percentage of any annual
increases in base salary will be no more than the average
percentage increase for the wider workforce for that year.
Not applicable.
Annual bonus
The annual bonus rewards good performance of the
Executive Directors are eligible to participate in the annual
Chief Executive: Maximum award is 450% of base salary.
Group and individual Executive Directors and is based
bonus at the discretion of the Committee.
CFO/COO: Maximum award is 350% of base salary.
on a balanced scorecard of financial and non-financial
measures which align with the performance and delivery
of annual objectives.
Deferral ensures a link to longer term performance and
risk management and aligns the interests of Executive
Directors with those of shareholders.
The performance period for the annual bonus will be 1
April - 31 March each year.
Performance measures and weightings are determined
annually but will include a mix of financial and non-
financial measures.
Awards may be deferred into Liontrust shares and/or funds.
Deferral will be in line with current regulatory landscape,
with a minimum 50% deferral, vesting annually over
three years (subject to a continuing employment and/or
membership requirement).
Deferral will automatically be made into Liontrust shares
unless the shareholding is greater than 1,000% of base
salary in which case, executives can elect to defer into
funds.
Where required by regulation, the element of the bonus
deferred into shares and/or funds may be subject to a
retention period after the awards vests.
Dividend equivalents may be awarded on deferred shares
in respect of dividends paid during the deferral period.
Awards are subject to continued employment and a balanced
scorecard of measures, with assigned weightings and targets set each
year. A mix of financial and non-financial criteria will be used each year
and may include financial, strategic, operational and ESG measures.
Financial measures will account for at least 50% of the annual bonus.
Payout at target performance will be set at 50% of maximum award
while payout at entry level performance will be set at 10% of maximum
award.
Individual risk and compliance behaviour is also considered in detail for
relevant roles and factored into the assessment of performance and the
determination of the bonus awarded
Discretion may be exercised in cases where the Committee believes
that the bonus outcome is not a fair and accurate reflection of business
performance. The exercise of this discretion may result in a downward
or upward adjustment in the amount of the bonus payout resulting from
the application of the performance measures. Any adjustments will be
disclosed in the relevant annual report.
The Committee also retains discretion in exceptional circumstances to
change performance measures and targets part-through a financial year
if there is a significant and material event which causes the Committee
to believe the original measures are no longer appropriate.
Any adjustments of or discretion applied by the Committee will be fully
disclosed in the following year’s Remuneration Report.
137
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023GOVERNANCE Objective and Link to strategy
Operation
Maximum opportunity
Performance measures and assessment
Long Term Incentive
Plan (“LTIP”)
The annual bonus rewards good performance of the
Group and individual Executive Directors and is based
on a balanced scorecard of financial and non-financial
measures which align with the performance and delivery
of annual objectives.
Deferral ensures a link to longer term performance and
risk management and aligns the interests of Executive
Directors with those of shareholders.
Executive Directors are eligible to participate in the annual
bonus at the discretion of the Committee.
The performance period for the annual bonus will be 1
April – 31 March each year.
Performance measures and weightings are determined
annually but will include a mix of financial and non-
financial measures.
Awards may be deferred into Liontrust shares and/or funds.
Deferral will be in line with current regulatory landscape,
with a minimum 50% deferral, vesting annually over
three years (subject to a continuing employment and/or
membership requirement).
Deferral will automatically be made into Liontrust shares
unless the shareholding is greater than 1,000% of base
salary in which case, executives can elect to defer into
funds.
Where required by regulation, element of the bonus
deferred into shares and/or funds may be subject to a
retention period after the awards vests.
Dividend equivalents may be awarded on deferred shares
in respect of dividends paid during the deferral period.
The maximum number of shares subject to the three annual LTIP
The vesting of awards is subject to continued employment and
awards which may be granted under this Policy is:
achievement of performance conditions linked closely to financial
For the Chief Executive, annual awards of shares equal to 0.25%
(a total of 0.75%) of the issued share capital on the date of the
The current performance measures are:
performance and shareholder return as set out below.
adoption of the LTIP.
CFO/COO, annual awards of shares equal to 0.18% (a total of
Trusts) (“TSR”) with a 40% weighting; and
i) relative total shareholder return vs. FTSE 250 (Excluding Investment
0.55%) of the issued share capital on the date of the adoption
of the LTIP.
ii) adjusted earnings per share excluding performance fees (“EPS”)
with a 60% weighting.
Entry level performance payout at 10% of maximum (for relative TSR this
will be median).
Target payout of 50% of stretch performance applies to EPS measure
(for relative TSR will be straight line vesting between entry level and
stretch performance, where stretch performance equates to upper
quintile performance).
In line with the UK Corporate Governance Code the Committee has
the discretion to adjust formulaic outcomes on the LTIP to reflect overall
corporate performance. Any adjustments of or discretion applied by the
Committee will be fully disclosed in the following year’s Remuneration
Report.
Shareholding
requirement
The shareholding requirement aligns the interests of
Executive Directors with those of shareholders.
The shareholding requirement is 500% of base salary for all
Executive Directors.
Not applicable.
Not applicable.
The post-employment shareholding requirement further
aligns the interests of Executive Directors with those of
shareholders and encourages the Executive Directors to
focus on sustainable long-term performance.
Share Incentive Plan
(“SIP”)
The SIP allows the Executive Directors to purchase
Company shares with a matching element, to build up
an interest in Company shares and increase alignment of
interests with shareholders.
Benefits
To provide benefits which are appropriately competitive.
In addition to personally owned shares, any unvested
shares which are not subject to performance conditions
(such as shares deferred under the annual bonus) and
vested shares subject to a holding period will count towards
the shareholding requirement, net of tax.
In the case of incoming Executive Directors the shareholding
requirement must be met within five years of an Executive
Director’s appointment.
The post-employment shareholding requirement is to
continue to hold for a period of two years after cessation
the lower of the i) shareholding requirement immediately
prior to cessation or ii) actual shareholding on cessation.
An all-employee HMRC approved share plan that allows
the Executive Directors to purchase shares, in a tax efficient
manner and subject to limits, which are matched by the
Company. In line with the normal operation of a SIP
envisaged by HMRC, there are no performance conditions
on matching shares.
Executive Directors are entitled to a range of benefits
including:
• Private Medical Insurance
• Life Insurance;
• Disability Assurance;
• Travel Insurance; and
• access to a Workforce Assistance Programme
Where relocation payments or allowances are paid it will
be limited to 50% of salary.
Up to a maximum of £1,800 to purchase Partnership Shares which
Not applicable.
are matched by the Company on a 2 for 1 basis.
The maximum opportunity for other benefits is defined by the
Not applicable.
nature of the benefit itself and the cost of providing it. As the cost
of providing such insurance benefits varies according to premium
rates and the cost of other benefits is dependent on market rates
and other factors, there is no formal maximum monetary value.
Pension
To provide competitive levels of retirement benefit aligned
with the wider workforce.
Executive Directors’ pension contributions are made at 10%
of base salary into the Liontrust Group Pension Plan.
The maximum percentage that the Executive Directors can receive as
Not applicable.
a pension contribution or cash equivalent payment is 10% of base
Executive Directors have the choice of taking an equivalent
cash payment in lieu of pension contributions.
salary.
138 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
GOVERNANCE Objective and Link to strategy
Operation
Maximum opportunity
Performance measures and assessment
Long Term Incentive
The annual bonus rewards good performance of the
Executive Directors are eligible to participate in the annual
Plan (“LTIP”)
Group and individual Executive Directors and is based
bonus at the discretion of the Committee.
on a balanced scorecard of financial and non-financial
measures which align with the performance and delivery
of annual objectives.
Deferral ensures a link to longer term performance and
risk management and aligns the interests of Executive
Directors with those of shareholders.
The maximum number of shares subject to the three annual LTIP
awards which may be granted under this Policy is:
For the Chief Executive, annual awards of shares equal to 0.25%
(a total of 0.75%) of the issued share capital on the date of the
adoption of the LTIP.
CFO/COO, annual awards of shares equal to 0.18% (a total of
0.55%) of the issued share capital on the date of the adoption
of the LTIP.
The vesting of awards is subject to continued employment and
achievement of performance conditions linked closely to financial
performance and shareholder return as set out below.
The current performance measures are:
i) relative total shareholder return vs. FTSE 250 (Excluding Investment
Trusts) (“TSR”) with a 40% weighting; and
ii) adjusted earnings per share excluding performance fees (“EPS”)
with a 60% weighting.
Entry level performance payout at 10% of maximum (for relative TSR this
will be median).
Target payout of 50% of stretch performance applies to EPS measure
(for relative TSR will be straight line vesting between entry level and
stretch performance, where stretch performance equates to upper
quintile performance).
In line with the UK Corporate Governance Code the Committee has
the discretion to adjust formulaic outcomes on the LTIP to reflect overall
corporate performance. Any adjustments of or discretion applied by the
Committee will be fully disclosed in the following year’s Remuneration
Report.
Shareholding
requirement
Executive Directors with those of shareholders.
Executive Directors.
The shareholding requirement aligns the interests of
The shareholding requirement is 500% of base salary for all
Not applicable.
Not applicable.
The post-employment shareholding requirement further
aligns the interests of Executive Directors with those of
shareholders and encourages the Executive Directors to
focus on sustainable long-term performance.
Share Incentive Plan
The SIP allows the Executive Directors to purchase
An all-employee HMRC approved share plan that allows
(“SIP”)
Company shares with a matching element, to build up
the Executive Directors to purchase shares, in a tax efficient
an interest in Company shares and increase alignment of
manner and subject to limits, which are matched by the
interests with shareholders.
Company. In line with the normal operation of a SIP
envisaged by HMRC, there are no performance conditions
on matching shares.
Benefits
To provide benefits which are appropriately competitive.
Executive Directors are entitled to a range of benefits
Up to a maximum of £1,800 to purchase Partnership Shares which
are matched by the Company on a 2 for 1 basis.
Not applicable.
The maximum opportunity for other benefits is defined by the
nature of the benefit itself and the cost of providing it. As the cost
of providing such insurance benefits varies according to premium
rates and the cost of other benefits is dependent on market rates
and other factors, there is no formal maximum monetary value.
Not applicable.
Pension
To provide competitive levels of retirement benefit aligned
Executive Directors’ pension contributions are made at 10%
with the wider workforce.
of base salary into the Liontrust Group Pension Plan.
The maximum percentage that the Executive Directors can receive as
a pension contribution or cash equivalent payment is 10% of base
salary.
Not applicable.
The performance period for the annual bonus will be 1
April – 31 March each year.
Performance measures and weightings are determined
annually but will include a mix of financial and non-
financial measures.
Awards may be deferred into Liontrust shares and/or funds.
Deferral will be in line with current regulatory landscape,
with a minimum 50% deferral, vesting annually over
three years (subject to a continuing employment and/or
membership requirement).
Deferral will automatically be made into Liontrust shares
unless the shareholding is greater than 1,000% of base
salary in which case, executives can elect to defer into
funds.
Where required by regulation, element of the bonus
deferred into shares and/or funds may be subject to a
retention period after the awards vests.
Dividend equivalents may be awarded on deferred shares
in respect of dividends paid during the deferral period.
In addition to personally owned shares, any unvested
shares which are not subject to performance conditions
(such as shares deferred under the annual bonus) and
vested shares subject to a holding period will count towards
the shareholding requirement, net of tax.
In the case of incoming Executive Directors the shareholding
requirement must be met within five years of an Executive
Director’s appointment.
The post-employment shareholding requirement is to
continue to hold for a period of two years after cessation
the lower of the i) shareholding requirement immediately
prior to cessation or ii) actual shareholding on cessation.
including:
• Private Medical Insurance
• Life Insurance;
• Disability Assurance;
• Travel Insurance; and
• access to a Workforce Assistance Programme
Where relocation payments or allowances are paid it will
be limited to 50% of salary.
Executive Directors have the choice of taking an equivalent
cash payment in lieu of pension contributions.
139
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023GOVERNANCE 8.2 Non-executive Directors
The following table summarises each of the elements of Liontrust’s total compensation package and the ongoing remuneration
policy for the Non-executive Directors:
Fees
Objective and Link
to strategy
To provide a market
competitive level
of Non-executive
Director fees which is
sufficient to attract and
retain individuals with
appropriate knowledge
and experience to
review and support the
implementation of the
Group’s strategy.
George Yeandle
Chair of the Remuneration Committee
20 June 2023
Operation
Maximum opportunity
and assessment
Performance measures
Not applicable.
Non-executive Chair
fees are capped at
£210,000.
Other Non-executive
Director fees are capped
at £150,000.
Fee increases are
determined by
reference to individual
responsibilities, inflation
and an appropriate
comparator group.
Non-executive Director
fees (including the Non-
executive Chair) are
reviewed annually with
changes effective from
April. The annual fees
comprise the following
elements: Base Fee and
Additional fees, which
may also apply in respect
of Senior Independent
Director status, committee
Chairship and committee
membership.
The policy is to position
Non-executive Director
fees at, generally, around
what the Executive
Directors and Chair of
the Board believe is
median in the market for
a company of similar
size and complexity from
the FTSE 250 FS. This
may also include fees for
membership/ Chairship
of subcommittees of the
Board or other Group
committees.
The Executive Directors
and Chair of the Board
are responsible for
setting the remuneration
of the Non-executive
Directors. The Chair of the
Board’s fee is set by the
Committee.
Non-executive Directors
do not participate in any
variable remuneration
element.
140 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
GOVERNANCE FINANCIAL STATEMENTS
Consolidated Statement of Comprehensive Income
Consolidated Balance Sheet
Consolidated Cash Flow Statement
Consolidated Statement of Changes in Equity
Notes to the Financial Statements
Liontrust Asset Management Plc Financial Statements
Liontrust Asset Management Plc Notes to the
Financial Statements
Independent auditor’s report to the members of Liontrust
Asset Management PLC
Shareholder Information
142
143
144
145
146
180
183
188
197
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the year ended 31 March 2023
Revenue
Cost of sales
Gross profit
Gain on write back of Majedie acquisition provision
Unrealised gain on financial assets
Administration expenses
Operating profit
Interest receivable
Interest payable
Profit before tax
Taxation
Profit for the year
Other comprehensive income:
Total comprehensive income
Earnings per share
Basic earnings per share
Diluted earnings per share
Note
4
4
5
6
8
16
10
Year ended
31-Mar-23
£’000
243,339
(13,569)
229,770
1,848
618
Year ended
31-Mar-22
£’000
245,571
(14,252)
231,319
–
26
(183,210)
(151,916)
49,026
79,429
358
(83)
49,301
(9,973)
39,328
4
(142)
79,291
(20,088)
59,203
39,328
59,203
Pence
Pence
12
12
61.45
61.21
97.65
97.61
The notes on pages 146 to 179 form an integral part of these consolidated financial statements.
142 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
FINANCIAL STATEMENTS
CONSOLIDATED BALANCE SHEET
As at 31 March 2023
Assets
Non current assets
Intangible assets
Goodwill
Property, plant and equipment
Total non current assets
Current assets
Trade and other receivables
Financial assets
Cash and cash equivalents
Total current assets
Liabilities
Non current liabilities
Deferred tax liability
Lease liability
Total non current liabilities
Current liabilities
Trade and other payables
Corporation tax payable
Total current liabilities
Net current assets
Net assets
Shareholders’ equity
Ordinary shares
Share premium
Capital redemption reserve
Retained earnings
Own shares held
Total equity
As at
31-Mar-23
£’000
As at
31-Mar-22
£’000
Note
15
14
16
17
18
1i
11
16
90,629
38,586
3,378
75,171
27,577
3,658
132,593
106,406
241,682
235,496
9,921
121,037
372,640
4,168
120,852
360,516
(21,493)
(2,168)
(23,661)
(16,601)
(2,775)
(19,376)
19
(255,460)
(255,669)
(5,131)
(7,709)
(260,591)
(263,378)
112,049
220,981
97,138
184,168
20
22
648
112,510
19
121,341
(13,537)
220,981
612
64,370
19
128,859
(9,692)
184,168
The notes on pages 146 to 179 form an integral part of these consolidated financial statements.
The financial statements on pages 142 to 179 were approved and authorised for issue by the Board of Directors on 20 June 2023
and signed on its behalf by V.K. Abrol, Chief Operating Officer and Chief Financial Officer.
Company Number 2954692
143
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023FINANCIAL STATEMENTS
CONSOLIDATED CASH FLOW STATEMENT
for the year ended 31 March 2023
Cash flows from operating activities
Cash received from operations
Cash paid in respect of operations
Net cash generated from changes in unit trust receivables and payables
Net cash generated from operations
Interest received
Tax paid
Net cash generated from operating activities
Cash flows from investing activities
Purchase of property and equipment
Acquisition of Majedie net of cash acquired
Gain on liquidation of Architas
Purchase of DBVAP Financial Asset
Sale DBVAP Financial Asset
Purchase of Seeding investments
Sale of Seeding investments
Net cash used in investing activities
Cash flows from financing activities
Payment of lease liabilities
Purchase of own shares
Dividends paid
Net cash used in financing activities
Net increase in cash and cash equivalents*
Opening cash and cash equivalents*
Closing cash and cash equivalents*
As at
31-Mar-23
£’000
As at
31-Mar-22
£’000
Note
236,362
219,544
(174,437)
(112,949)
(1,387)
60,538
358
(17,479)
43,417
(253)
13,596
827
(2,701)
–
(2,193)
1,990
11,266
(1,328)
(7,100)
(46,070)
(54,498)
185
120,852
121,037
16
9
(508)
106,087
4
(12,500)
93,591
(507)
–
–
(3,125)
1,183
(170)
84
(2,535)
(1,889)
(5,000)
(35,213)
(42,102)
48,954
71,898
120,852
*Cash and cash equivalents consist only of cash balances.
The notes on pages 146 to 179 form an integral part of these consolidated financial statements.
144 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
FINANCIAL STATEMENTS CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 31 March 2023
Ordinary
shares
£ ‘000
Share
premium
£ ‘000
Capital
redemption
£ ‘000
Retained
earnings
£ ‘000
Own
shares held
£ ‘000
Note
Total
Equity
£ ‘000
Balance at 1 April 2022 brought forward
612
64,370
19
128,859
(9,692)
184,168
Profit for the year
Total comprehensive income for the year
Dividends paid
Shares issued
Purchase of own shares
Sale of own shares
Equity share options issued
Balance at 31 March 2023
–
–
–
–
–
–
36
48,140
–
–
–
–
–
–
9
20
23
–
–
–
–
–
–
–
39,328
39,328
(46,070)
–
–
–
–
–
–
(7,100)
(2,692)
3,255
1,916
–
39,328
39,328
(46,070)
48,176
(7,100)
563
1,916
648
112,510
19
121,341
(13,537)
220,981
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 31 March 2022
Ordinary
shares
£ ‘000
Share
premium
£ ‘000
Capital
redemption
£ ‘000
Retained
earnings
£ ‘000
Own
shares held
£ ‘000
Note
Total
Equity
£ ‘000
Balance at 1 April 2021 brought forward
610
64,370
19
104,207
(5,818)
163,388
Profit for the year
Total comprehensive income for the year
Dividends paid
Shares issued
Purchase of own shares
Sale of own shares
Equity share options issued
Balance at 31 March 2022
–
–
–
2
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
59,203
59,203
(35,947)
(2)
–
–
–
–
–
59,203
59,203
(35,947)
–
(5,000)
(5,000)
(1,042)
1,126
2,440
–
84
2,440
612
64,370
19
128,859
(9,692)
184,168
9
20
22
The notes on pages 146 to 179 form an integral part of these consolidated financial statements.
145
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS
1 PRINCIPAL ACCOUNTING POLICIES
a) Basis of preparation
The consolidated financial statements have been prepared in
accordance with UK-adopted International Financial Reporting
Standards (IFRS) and those parts of the Companies Act 2006
applicable to companies reporting under IFRS.
The preparation of financial statements in conformity with IFRS
requires the directors of the Company to make significant
estimates and judgements that affect the reported amounts of
assets and liabilities and disclosure of contingencies at the
date of the financial information and the reported income
and expense during the reporting periods. Although these
judgements and assumptions are based on the directors’ best
knowledge of the amount, events or actions, actual results may
differ from these estimates. The accounting policies set out
below have been used to prepare the financial information.
All accounting policies have been consistently applied.
The financial information has been prepared based on the
IFRS standards effective as at 31 March 2023. There have
been no significant changes issued to IFRS that would affect
the Group and Company during the year.
b) Going concern
The consolidated financial information presented within these
financial statements has been prepared on a going concern
basis (See ‘Basis of financial statements’ on page 101) under
the historical cost convention (except for the measurement
of financial assets at fair value through profit and loss and
DBVAP liability which are held at their fair value). The Group
is reliant on cash generated by the business to fund its
working capital. The Directors have assessed the prospects
of the Group and parent company over the forthcoming 12
months, including an assessment of current trading; budgets,
plans and forecasts; the adequacy of current financing
arrangements; liquidity, cash reserves and regulatory capital;
and potential material risks to these forecasts and the Group
strategy. This assessment includes a review of the ongoing
impact of the global geopolitical tensions; and consideration
of a severe but plausible downside scenario in which AuMA
falls by 20% with nil net sales. Consequently, the directors
are confident that the company will have sufficient funds to
continue to meet its liabilities as they fall due for at least 12
months from the date of approval of the financial statements
and therefore have prepared the financial statements on a
going concern basis.
c) Basis of consolidation
Subsidiaries are all entities over which the Group has control.
The Group has control of an entity if, and only if it has all of
the following:
• power over the entity;
• exposure, or rights to, variable returns from its involvement
with the entity; and
• the ability to use its power over the entity to affect its returns.
The Group considers all relevant facts and circumstances
in assessing whether it has power over an entity, including:
the purpose and design of an entity, its relevant activities,
substantive and protective rights, and voting rights and
potential voting rights. There is no fixed minimum percentage
at which the Group consolidates, and each exposure is
reviewed individually.
Subsidiaries comprise operating and holdings companies,
partnerships and those funds where the Group acts as fund
manager and which are consolidated as a result of additional
exposure to the variable returns of the funds through seed
investment. Such seed investments are typically small as a
proportion of the aggregate capital of fund and at the date of
the report no investee funds are considered subsidiaries and
consolidated.
Subsidiaries are fully consolidated from the date on which
control is transferred to the Group. They are de-consolidated
from the date that control ceases. Uniform accounting
policies are applied across all Group entities. Inter-company
transactions, balances, income and expenses on transactions
between Group entities are eliminated on consolidation.
Profits and losses resulting from inter-company transactions that
are recognised in assets are also eliminated on consolidation.
d) Significant accounting estimates and judgements
The preparation of the financial statements in conformity with
IFRS requires the use of certain critical accounting estimates.
It also requires management to exercise its judgement in the
process of applying the Group’s accounting policies. Estimates
and judgements used in preparing the financial statements are
periodically evaluated and are based on historical experience
and other factors, including expectations of future events
that are believed to be reasonable. The resulting accounting
estimates may not equal the related actual results. There are
no significant judgements. The Directors make a number of
estimates, these include leases (note k) and share based
payments (note p), neither of which are considered to be
significant. In addition, the Directors make estimates to support
the carrying value of goodwill and intangibles that arise on
acquisition. These estimates are set out below:
Accounting estimates and judgements
(i) Acquisition of Majedie Investment Management Limited
The consideration paid for Majedie is allocated between the
intangible assets related to the fund management contracts,
segregated client portfolios and goodwill, being the excess
of the consideration and the amount recognised for non-
controlling interests, over the net identifiable assets acquired
and liabilities assumed. The significant estimate is in relation to
certain unobservable inputs supporting the carrying value of the
intangible assets and goodwill. Details of the key assumptions
used are provide in noted 14 and 15.
146 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
FINANCIAL STATEMENTS (ii) Impairment of Goodwill and Intangible assets
Goodwill arising on acquisitions is capitalised in the
consolidated balance sheet. Goodwill is carried at cost less
provision for impairment. The carrying value of goodwill is
not amortised but is tested annually for impairment or more
frequently if any indicators of impairment arise. Goodwill is
allocated to a cash generating unit (CGU) for the purpose of
impairment testing, with the allocation to those CGUs that are
expected to benefit from the business combination in which the
goodwill arose (see note 14).
The costs of acquiring intangible assets such as fund
management contracts are capitalised where it is probable
that future economic benefits that are attributable to the assets
will flow to the Group and the cost of the assets can be
measured reliably. The assets are held at cost less accumulated
amortisation. An assessment is made at each reporting date,
on a standalone basis for each intangible asset, as to whether
there is any indication that the asset in use may be impaired.
If any such indication exists and the carrying value exceeds
the estimated recoverable amount at the time, the assets are
written down to their recoverable amount. The recoverable
amount is measured as the greater of fair value less costs to sell
and value in use. Further information on the impairment testing
and estimates used are contained in note 14.
The fund management contracts and segregated clients contracts
relating to the assets acquired as part of the acquisitions of Alliance
Trust Investments Limited; Neptune Investment Management
Limited; Architas Multi-Manager Limited and Architas Advisory
Services Limited (together “Architas”) and Majedie Investment
Management Limited are recorded initially at fair value and
recorded in the consolidated financial statements as intangible
assets, they are then amortised over their useful lives on a straight-
line basis. Management have determined that the useful life of
these assets is between 5 and 10 years owing to the nature of
the acquired products. Impairment is tested through measuring
the recoverable amount against the carrying value of the related
intangible asset. Impairment testing is only required if there is an
impairment trigger. The recoverable amount is the higher of the
fair value less costs to sell and its value in use. The Directors
assess the value in use using a multi-period excess earnings
model which requires a number of inputs requiring management
estimates, the most significant of which include: future AumA
growth, useful economic life and discount rates. In the current
period, significant estimates were only required for the intangible
assets and goodwill in relation to Architas and Majedie (see
notes 13,14 and 15 for further detail).
e) Property, plant and equipment
Property, plant and equipment are stated at historic purchase
cost less accumulated depreciation. The cost includes the
original purchase price of the asset and the costs attributable to
bringing the asset to its working condition for its intended use.
Leasehold improvements are included at cost and are depreciated
on a straight line basis over the lower of the estimated useful life
and the remaining lease term.
Office equipment is depreciated on a straight line basis over the
estimated useful life of the asset, which is between three and ten
years.
Computer equipment is depreciated on a straight line basis over
the estimated useful life of the asset which is three years.
At each reporting date management reviews the assets’ residual
values and useful lives, and will make adjustments if required.
f) Trade and other receivables
Trade and other receivables include prepayments as well
as amounts the Group is due to receive from third parties
in the normal course of business. These include fees as well
as settlement accounts for transactions undertaken. These
receivables are normally settled by receipt of cash. Trade and
other receivables are initially recognised at fair value and then
at amortised cost after deducting provisions for expected credit
losses. The Group applies the IFRS9 simplified approach to
measuring expected credit losses (ECLs) for trade receivables
at an amount equal to lifetime ECLs. There is no ECL recognised
in the year so no material difference. The ECLs on trade
receivables are calculated based on actual historic credit
loss experience and is adjusted for forward-looking estimates.
Prepayments arise where the Group pays cash in advance
for services. As the service is provided, the prepayment is
reduced and the operating expenses are recognised in the
Consolidated Statement of Comprehensive Income.
Purchase orders from customers for units in managed funds are
initially recognised as receivables pending receipt of cash to fund
the purchase on a trade date basis. Settlement of the transaction
occurs through exchange of cash for units in the underlying
fund which are received from the registrar in exchange for this
consideration. Correspondingly, redemptions of units in funds
are recognised as payables from trade date until receipt of sales
proceeds from the registrar. This purchase and sale process
and settlement cycle results in significant, but largely offsetting,
receivable and payable balances on the Group balance sheet.
A breakdown of these amounts is provided in notes 17 and 19.
Any balances not settled on due date are segregated within client
money accounts separate from the assets of the Group.
g) Trade and other payables
Trade and other payables (excluding deferred income) represent
amounts the Group is due to pay to third parties in the normal
course of business. These include expense accruals as well as
settlement accounts (amounts due to be paid for transactions
undertaken as noted above). Trade payables are costs that have
been billed. Accruals represent costs, including remuneration, that
are not yet billed or due for payment. They are initially recognised
at fair value and subsequently held at amortised cost.
h) Financial assets
The Group holds the following assets at fair value through
profit or loss:
For the UK Authorised unit trusts, units are held in the
‘manager’s box’ are to ease the calculation of daily creations
and cancellations of units. These box positions are not held to
147
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023FINANCIAL STATEMENTS
148 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
FINANCIAL STATEMENTS create speculative proprietary positions but are managed in
accordance with specified criteria and authorisation limits. The
units in the ‘manager’s box’ are accounted for on a trade date
basis. These units are valued on a bid price basis.
For the UK ICVCs, the shares held in the ‘manager’s box’ are to
facilitate the calculation of daily creations and cancellations of
shares. These box positions are not held to create speculative
proprietary positions but are managed in accordance with
specified criteria and authorisation limits. The shares in the
‘manager’s box’ are accounted for on a trade date basis.
These shares are valued on a mid-price basis.
Units in Liontrust UK Authorised unit trusts, shares in the sub
funds of the Liontrust Global Funds Plc; and shares in the
Liontrust ICVCs are held by the Liontrust Asset Management
Employee Trust (an Employee Benefit Trust ‘EBT’) in respect of
the Deferred Bonus and Variable Allocation Plan (DVBAP). The
units and shares are accounted for on a trade date basis and
are valued on a mid (unit trust) or bid (ICVC) basis.
The Group assesses at each balance sheet date whether
there is objective evidence that a financial asset or a group of
financial assets is impaired.
i) Cash and cash equivalents
Cash comprises cash on hand and demand deposits. Cash
equivalents are short-term, highly liquid investments that are
readily convertible to known amounts of cash and which are
subject to an insignificant risk of change in value. Under IFRS
cash and cash equivalents are included in the consolidated
cash flow statement.
j) Own shares
Own shares held by the EBT and The Liontrust Members
Reward Partnership LP are valued at cost and are shown as
a deduction from the Group’s shareholders’ equity. No gains
or losses are recognised in the Consolidated Statement of
Comprehensive Income.
k) Leases
At inception of a contract, the Group assesses whether a contract
is, or contains, a lease. A contract is, or contains, a lease if the
contract conveys the right to control the use of an identified asset
for a period of time in exchange for consideration.
As a lessee
At commencement or on modification of a contract that contains
a lease component, the Group allocates the consideration
in the contract to each lease component on the basis of its
relative stand-alone prices. However, for the leases of property
the Group has elected not to separate non-lease components
and account for the lease and non-lease components as a
single lease component.
The Group recognises a right-of-use asset (ROU) and a lease
liability at the lease commencement date. The ROU asset is
initially measured at cost. which comprises the initial amount
of the lease liability adjusted for any lease payments made at
or before the commencement date, plus any initial direct costs
incurred and an estimate of costs to dismantle and remove the
underlying asset or to restore the underlying asset or the site on
which it is located, less any lease incentives received.
The ROU asset is subsequently depreciated using the straight-line
method from the commencement date to the end of the lease
term, unless the lease transfers ownership of the underlying asset
to the Group by the end of the lease term or the cost of the ROU
asset reflects that the Group will exercise a purchase option.
In that case the right-of-use asset will be depreciated over the
useful life of the underlying asset, which is determined on the
same basis as those of property and equipment. In addition, the
ROU asset is periodically reduced by impairment losses, if any,
and adjusted for certain remeasurements of the lease liability.
The lease liability is initially measured at the present value of
the lease payments that are not paid at the commencement
date, discounted using the interest rate implicit in the lease
or, if that rate cannot be readily determined, the Group’s
incremental borrowing rate (IBR). Generally, the Group uses its
IBR as the discount rate.
The Group determines its IBR by obtaining interest rates
from various external financing sources and makes certain
adjustments to reflect the terms of the lease and type of the
asset leased. Lease payments included in the measurement of
the lease liability comprise the following:
• fixed payments, including in-substance fixed payments;
• variable lease payments that depend on an index or a
rate, initially measured using the index or rate as at the
commencement date;
• amounts expected to be payable under a residual value
guarantee; and
• the exercise price under a purchase option that the Group is
reasonably certain to exercise, lease payments in an optional
renewal period if the Group is reasonably certain to exercise an
extension option, and penalties for early termination of a lease
unless the Group is reasonably certain not to terminate early.
The lease liability is measured at amortised cost using the
effective interest method. It is remeasured when there is a
significant event or change in circumstances that is within
the control of the Group that affects the determination of the
lease term, and therefore in future lease payments. This could
arise from a change in and index or rate, if there is a change
in Group’s estimate of the amount expected to be payable
under a residual value guarantee, if the Group changes its
assessment of whether it will exercise a purchase, extension
or termination option or if there is a revised in-substance fixed
lease payment. When the lease liability is remeasured in this
way, a corresponding adjustment is made to the carrying
amount of the ROU asset, or is recorded in profit or loss if the
carrying amount of the ROU has been reduced to zero.
149
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023FINANCIAL STATEMENTS l) Income and expenses
Income
Income and expenses are accounted for on an accruals basis
when they become receivable or payable in accordance
with IFRS 15. The Group’s primary source of revenue is fee
income from investment management activities. These fees are
generally based on an agreed percentage of the valuation of
the AuMA and are recognised as the service is provided and
it is probable that the fee will be received. Contractual rebates
payable to customers are deducted from revenue.
Management and administration fees are earned over a
period of time, and revenue is recognised in the same period
in which the service is performed.
Performance fees are earned in respect of certain contracts only
and are recognised when the fee amount can be estimated
reliably and it is highly probable that it will not be subject
to significant reversal. Performance fees can include terms
that a proportion of the fee earned is deferred until the next
performance fee is payable. As there is no certainty that such
deferred fees will be collectable in future years, the Group’s
accounting policy is to include performance fees in income
only when they become due and collectable in accordance
with IFRS 15.
Revenue is also earned from the net value of sales and
redemptions, and liquidations and creations, of units and
shares in units trusts and open-ended investment companies;
and from the operation of a box of units in the unit trusts (“box
profits”) – being the “at risk” trading profit or loss arising from
changes in the valuation of holdings of units in Group Unit
Trusts to help manage client sales into, and redemptions from
the trust. Box profits are recognised as incurred.
Management, administration and performance fees are forms
of variable consideration, however there is no significant
judgement or estimation.
Expenses
Operating expenses represent the Group’s administrative
expenses and are recognised as the services are provided.
Front end fees received and commissions paid on the sales
of units in unitised funds are amortised over the estimated life
of the unit.
DBVAP – in accordance with regulatory requirements and good
market practice the Group defers a proportion of senior staff
annual bonuses and variable allocations over a period of 3
years. At the inception of the deferral period the company
purchases units in a portfolio of Liontrust funds to match the
future liability arising from these awards which is recognised
in the EBT as a financial asset. The DBVAP does not have any
further performance conditions but has a continuous service
condition. The costs of purchasing these units is recognised over
the vesting period. Further details are disclosed in the Directors
Remuneration Policy Elements of Reward table on page 115.
m) Taxation
The tax expense for the period comprises current and
deferred tax. Tax is recognised in the income statement,
except to the extent that it relates to items recognised in other
comprehensive income, or directly in equity; in these cases,
the related tax is also recognised in other comprehensive
income or directly in equity.
The current income tax charge is calculated on the basis
of the tax laws enacted, or substantively enacted, at the
balance sheet date in the countries where the company
and its subsidiaries operate and generate taxable income.
Management periodically evaluates positions taken in tax
returns with respect to situations in which applicable tax
regulation is subject to interpretation. It establishes provisions
where appropriate on the basis of amounts expected to be
paid to the tax authorities.
Deferred income tax is recognised, using the liability method, on
temporary differences arising between the tax bases of assets
and liabilities and their carrying amounts in the consolidated
financial statements. However, the deferred income tax is not
accounted for, if it arises from initial recognition of an asset or
liability in a transaction, other than a business combination,
that at the time of the transaction affects neither accounting nor
taxable profit or loss. Deferred income tax is determined using
tax rates and laws that have been enacted, or substantively
enacted, by the balance sheet date and are expected to apply
when the related deferred income tax asset is realised; or the
deferred income tax liability is settled.
Deferred income tax assets are recognised to the extent that it
is probable that future taxable profit will be available against
which the temporary differences can be utilised.
Deferred income tax assets and liabilities are offset when
there is a legally enforceable right to offset current tax assets
against current tax liabilities and when the deferred income
taxes assets and liabilities relate to income taxes levied by
the same taxation authority on either the taxable entity or
different taxable entities where there is an intention to settle the
balances on a net basis.
n) Members drawings
Members drawings are paid on account during the period plus
any share of profits paid out after the period end, accounted
for as an expense in the period in which they are incurred.
o) Pensions
The Group operates defined contribution schemes for its
employees. The assets are invested in individual Self Invested
Pension Plan accounts and are held separately from the
Group. The costs of the pension scheme are recognised in
the Consolidated Statement of Comprehensive Income in the
period in which they are incurred. The Group has no further
payment obligations once the contributions have been paid.
150 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
FINANCIAL STATEMENTS p) Employee share options and Member incentive awards
The Group operates a number of equity-settled and cash-
settled, share-based compensation plans, under which the
entity receives services from employees and members as
consideration for equity instruments of the Group. The fair
value of the services received in exchange for the awards is
recognised as an expense, and credited to equity reserves for
equity settled awards, and provisions for cash settled awards,
over the vesting period. For equity settled awards the total
amount to be expensed is determined at the date of grant by
reference to the fair value of the awards granted. For cash
settled awards the amount to be expensed is remeasured at
each balance sheet date. Monte Carlo and Black-Scholes
models have been used to calculate the fair value of the
awards. The models require estimates to be made to determine
the fair value of the awards the most significant of which are
as follows:
Liontrust Long Term Incentive Plan (‘LTIP’) and Liontrust Members
Reward Plan (‘LMRP’) with market based performance
conditions attached: a Monte Carlo simulation model is used
to value the award with the following assumptions having
been made:
• the fair values spread over the vesting period of 3 years with
an exercise price of nil;
• the options are expected to be exercised at the point they
become exercisable;
• the risk-free interest rate has been based on the implied
yield of zero-coupon government bonds (UK strips) with a
remaining term equal to the expected term; and
• the expected volatility is based on the Company’s historical
volatility
Employee Liontrust Long Term Incentive Plan (‘eLTIP’) and Members
Liontrust Long Term Incentive Plan (‘mLTIP’) with non-market based
performance conditions attached; Liontrust Company Share
Option Plan (“CSOP”) and Phantom share awards:
• a Black-Scholes model is used to value the award with the
following assumptions having been made:
• the fair value is spread over the vesting period which is 3
years with an exercise price of nil (eLTIP/mLTIP/Phantom),
or set at the time of issue of the award for CSOP awards;
• the eLTIP/mLTIP/Phantom awards are expected to be
exercised at the point they become exercisable;
• the CSOP awards are estimated to be exercised at the mid-
point between vest (3 years) and lapse (10 years);
• the risk-free interest rate of has been based on the implied
yield of zero-coupon government bonds (UK strips) with a
remaining term equal to the expected term;
• the expected volatility is based on the Company’s historical
volatility
• dividend yield of nil for eLTIP/mLTIP/Phantom awards as
dividend equivalents are paid out in shares on vesting of
these awards; and
• dividend yield estimated based on the current expectation
and history of dividends paid for CSOP awards.
Based on historic experience, no reduction in the expense has
been taken for expected award lapses from staff leaving the
Group.
q) Dividends
An interim dividend never becomes a liability of the company
because the directors can rescind the declaration before
payment. Thus, an interim dividend is recognised in the
accounts when it is paid.
r) Foreign currency gains/losses
Items in the financial statements of each of the Group’s entities
are measured using the currency of the primary economic
environment in which the entity operates (The ‘functional
currency’). The consolidated financial statements are presented
in Sterling (‘£’) which is the Group and Company’s functional
and presentation currency.
Foreign currency transactions are translated into the functional
currency using the exchange rates prevailing at the dates of
the transactions. Foreign exchange gains and losses resulting
from the settlement of such transactions and from the translation
at year-end exchange rates of monetary assets and liabilities
denominated in foreign currencies are recognised in the
Consolidated Statement of Comprehensive Income.
s) Share Capital
Ordinary shares are classified as equity. Incremental costs
directly attributable to the issue of new ordinary shares or
options are shown in equity as a deduction, net of tax, from
the proceeds.
t) Employee Benefit Trusts (‘EBTs’)
EBTs are accounted for under IFRS 10 and are consolidated
on the basis that the parent has control, thus the assets and
liabilities of the EBT are included on the Company balance
sheet and shares held by the EBT in the Company are
presented as a deduction from equity.
151
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023FINANCIAL STATEMENTS 2 FINANCIAL RISK MANAGEMENT
The Group’s activities expose it to a variety of financial risks: market
risk (including price risk, interest rate risk and foreign exchange
risk), credit risk, liquidity risk and capital risk. The Group’s overall
risk management programme understands the unpredictable
nature of financial markets and seeks to minimise any potential
adverse effects on the Group’s financial performance. The Group
uses a number of analytical tools to measure the state of the
business. The financial review on pages 30 to 33 of the Strategic
Report identifies some of these measures.
a) Market risk
i) Price risk
The Group is exposed to equity securities price risk because
of investments held by the Group and classified on the
consolidated balance sheet as current financial assets (held at
fair value through profit).
The Group holds the following types of investment as assets
held at fair value through profit or loss (see note 18):
Operational investments:
1. Units in UK Authorised unit trusts;
2. shares in the sub-funds of Liontrust Global Funds Plc;
3. Shares in the sub-funds of Liontrust Global Fundamental PLC;
4. shares in the sub-funds of Liontrust Investment Funds ICVC; and
5. shares in the sub-funds of Liontrust Sustainable Funds ICVC.
Investments held by the EBT
1. Units in UK Authorised unit trusts; and
2. shares in the sub-funds of Liontrust Sustainable Funds ICVC.
For UK Authorised unit trusts and the ICVC’s, the units and
shares held in the ‘manager’s box’ are to ease the calculation
of daily creations and cancellations of units or shares . These
box positions are not held to create speculative proprietary
positions but are managed in accordance with specified criteria
and authorisation limits. The manager’s box for each fund is
reviewed daily. If there is a negative box position then units or
shares are created to bring the box level positive. Three control
levels of the manager’s box exist for each fund and each level
is required to be signed off by progressively more senior staff.
There are clearly defined maximum limits, over which manager’s
box levels cannot exceed.
The units in the ‘manager’s box’ are accounted for on a trade
date basis. These units are valued on a bid price basis and
held at fair value through profit and loss. The shares in the
‘manager’s box’ are accounted for on a trade date basis.
These units are valued on a mid price basis and held at fair
value through profit and loss.
For UK Authorised unit trusts, the units held in the EBT are
selected as part of the DBVAP to align the interests of the
Directors with the wider business. The units are accounted for
on a trade date basis and valued on a bid price basis and
held at fair value through profit and loss.
For the shares in the sub-funds of Liontrust Sustainable Funds
ICVC held in the EBT are selected as part of the DBVAP to align
the interests of the Directors with the wider business. The shares
are accounted for on a trade date basis and valued on a single
price basis and held at fair value through profit and loss.
The operational investment in the sub-funds of Liontrust Global
Funds PLC, (an Ireland domiciled open ended investment
company) have been undertaken as an investment to aid
incorporation and will be redeemed when the sub funds
grow in size. The Group has a regular review process for
the investments which identifies specific criteria to ensure that
investments are within agreed limits.
Management consider, based on historic information, that a
sensitivity rate of 10% is appropriate. Based on the holdings
in the Liontrust Global Funds at the balance sheet date a price
movement of 10% would result in a movement in the value of
the investment of £280,700 (2022: £67,000). Based on the
holdings in the Liontrust Authorised Unit Trusts and UK ICVC’sat
the balance sheet date a price movement of 10% would result
in a movement in the value of the investment of £711,000
(2022: £350,000).
The Group monitors its investments with respect to its regulatory
capital requirements and reviews its investments’ values with
respect to overall Group capital on a monthly basis.
ii) Cash flow interest rate risk
Interest rate risk is the risk that the Group will sustain losses
from the fair value or future cash flows of adverse movements
in interest bearing assets and liabilities and so reduce
profitability.
The Group holds cash on deposit in GBP. The interest on these
balances is based on floating rates. The Group monitors its
exposure to interest rate movements and may decide to adjust
the balance between deposits on fixed or floating interest
rates, or adjust the level of deposits. Management consider
that given current interest rate levels a sensitivity rate of 1% is
appropriate for GBP cash. Following a review of sensitivity
based on average cash holdings during the year a 1% increase
or decrease in the interest rate will cause a £1,154,000
increase or a decrease to nil in interest receivable (2022:
£951,000 increase or decrease to nil).
iii) Foreign exchange risk
Foreign exchange risk is the risk that the Group will sustain
losses through adverse movements in currency exchange rates.
The Group’s policy is to hold the minimum currency exposure
required to cover operational needs and, therefore, to convert
foreign currency on receipt.
152 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
FINANCIAL STATEMENTS The Group is currently exposed to foreign exchange risk in the
following areas: Investments denominated in US Dollars and
Euros and income receivable in Euro and US Dollars, these
amounts are not considered to be material.
In calculating the sensitivity analysis below it has been assumed
that expenses/income will remain in line with budget in their
relative currencies year on year.
Management consider that a sensitivity rate of 10% is
appropriate given the current level of volatility in the world
currency markets. In respect of investments denominated in
foreign currencies a 10% movement in the UK Sterling vs. the
relevant exchange rate would lead to an exchange gain or
loss as follows:
Sterling vs. Euros - a movement of 10% would lead to a
movement of £13,000 (2022: £15,000).
Sterling vs. US Dollar - a movement of 10% would lead to a
movement of less than £4,000 (2022: less than £8,000).
In respect of Income receivable in Euro a 10% movement in
the exchange rate would result in a movement of £559,782
(2022: £494,000) in the income statement.
In respect of Income receivable in US Dollar a 10% movement
in the exchange rate would result in a movement of £262,169
(2022: £414,000) in the income statement.
b) Credit risk
Credit risk is managed at a Group level. The Group is
exposed to credit risk primarily on its trade receivables and
from its financing activities, including deposits with banks and
financial institutions and other financial instruments.
Fees receivable arise mainly from the Group’s investment
management business and amounts are monitored regularly.
Historically, default levels have been insignificant and the
Group’s maximum exposure to credit risk is represented by the
carrying value of its financial assets.
Maximum exposure to credit risk
31-Mar-23
£’000
31-Mar-22
£’000
Cash and cash equivalents
121,037
120,852
Trade receivables
241,682
235,496
For banks and financial institutions only independently rated
parties with a minimum rating of ‘A-2’ are used and their
ratings are regularly monitored by the Portfolio Risk Committee.
For receivables the Group takes into account the credit quality
of the client and credit positions are monitored. The Group has
three main types of receivables: management and performance
fees, settlement due from investors in its funds and from the funds
themselves for unit/share liquidations. For management and
performance fee receivables, the Group proactively manages
the invoicing process to ensure that invoices are sent out on a
timely basis and has procedures in place to chase for payment
at pre-determined times after the despatch of the invoice to
ensure timely settlement. For receivables due from investors, the
Group has rigorous procedures to chase investors by phone/
letter to ensure that settlement is received on a timely basis.
For settlement due from the fund for liquidations, the settlement
of these types of receivables are governed by regulation and
are monitored on an exception basis. In all cases, detailed
escalation procedures are in place to ensure that senior
management are aware of any problems at an early stage.
During the year there have been no losses due to non-payment
of receivables and the Group does not expect any losses from
the credit counterparties as held at the balance sheet date.
153
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023FINANCIAL STATEMENTS
c) Liquidity risk
Prudent liquidity risk management requires the maintenance of sufficient net cash and marketable securities. The Group monitors
rolling forecasts of the Group’s liquidity reserves (comprising readily realisable investments and cash and cash equivalents) on the
basis of expected cash flows.
The Group has categorised its financial liabilities into maturity Groupings based on the remaining period at the balance sheet date
to the contractual maturity date. The amounts disclosed in the table below are the contractual undiscounted cash flows.
As at 31 March 2023
Payables
As at 31 March 2022
Payables
Due
within 3
months
£’000
Due between
3 months
and one year
£’000
Due in
over one year
£’000
255,460
–
2,168
Due
within 3
months
£’000
Due between
3 months
and one year
£’000
Due in
over one year
£’000
255,669
–
2,775
d) Capital risk management
The Group’s objective when managing capital is to safeguard the Group’s ability to continue as a going concern in order to
provide returns for shareholders and benefits for other stakeholders whilst maintaining an optimal company structure to reduce the
cost of capital and meet working capital requirements.
The Group’s policy is that it and its subsidiaries should have sufficient capital to meet regulatory requirements, keep an appropriate
standing with counterparties and meet working capital requirements at both a Group and subsidiary level. Management reviews
the Group’s assets on a monthly basis and will ensure that operating capital is maintained at the levels required. In order to
maintain or adjust the capital structure the Group may adjust the amounts of dividends paid to shareholders, return capital to
shareholders, issue new shares, buy back shares or sell financial assets which will increase cash and reduce capital requirements.
Regulatory risk capital (unaudited)
Recognised regulatory bodies, such as the FCA in the UK, oversee the activities of a number of the Group’s operating subsidiaries and
impose capital requirements on the subsidiaries. The Group is regulated by the FCA as a UK consolidation Group. The FCA issued
new rules on capital adequacy following the implementation of the Investment Firm Prudential Regulation (IFPR) which came into force
on 1 January 2022. Liontrust is subject to the MIFIDPRU regulations.
The FCA requires the Group to hold more regulatory capital resources than the Overall Financial Threshold Requirement (OFTR) which
is the total capital requirement as defined in the IFPR. The OFTR for the Group is made of the Own Funds Requirement (the regulatory
minimum) and any Additional Own Funds Requirement identified during the Internal Capital Adequacy and Risk Assessment (ICARA)
process, which replaced the previous Internal Capital Adequacy Assessment Process (ICAAP).
The Own Funds Requirement for the Group is the higher of:
A) the new IFPR K-Factor Requirement; and
B) the Fixed Overhead Ratio (FOR) Requirement
A summary of the Own Funds Requirement for Liontrust is shown in the table below:
Own Funds Requirement
(A) K-Factor Requirement
- Risk-to-Client (sum of K-AUM, K-CMH and K-ASA)
- Risk-to-Market (sum of K-NPR, K-CMG, K-TCD, and K-CON)
- Risk-to-Firm (sum of K-COH and K-DTF)
(B) Fixed Overhead Ratio Requirement (FOR)
Own Funds (Capital) Requirement – Higher of (A) and (B)
Liontrust Asset Management Plc
£000’s
7,069
6,837
–
232
25,906
25,906
154 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
FINANCIAL STATEMENTS The Group determines the OFTR during the Liontrust ICARA process. The Group produces the ICARA annually, or more frequently
if there is a fundamental change to our business. The OFTR is determined by the higher of:
• Harms from Ongoing Operations
• Harms from a Wind-Down
The Harms from Ongoing Operations for Liontrust includes material risks of the Group such as operational and credit risks. The
Harms from a Wind-Down is an estimated cost analysis of an orderly wind-down of the Group within a stressed market environment.
The OFTR as at 31 March 2022 for the consolidated Group was £39.6m which was driven by Harms from Ongoing Operations.
The ICARA also considers other various risks inherent in our business, such as concentration risk, obligations to fund any deferred
benefit pension schemes and non-MIFID and/or unregulated activities that the Group is not explicitly holding capital for. The
ICARA process details how all material risks are being managed to ensure that the risks are tolerable in terms of potential impact
should they materialise, including any impact on our OFTR. The assessment draws upon the results of our risk management controls
and includes scenario analysis and stress testing that considers the Group’s exposure to extreme events.
The preparation of the ICARA is managed by the Chief Risk Officer alongside the Chief Executive and Chief Operating Officer /
Chief Financial Officer, together with key input from senior managers within the business. The ICARA is reviewed and approved
by the Audit and Risk Committee and the Group Board.
As at 31 March 2023, the Group has regulatory capital (own funds) resources of £91.8 million (2022: £81.4 million),
significantly in excess of the Group’s OFTR. The regulatory capital is all comprised of common equity tier 1 capital such as retained
earnings, ordinary shares and the share premium line items on the balance sheet. During the period, the Group and its subsidiary
entities complied with all regulatory capital requirements under the IFPR. In compliance with MIFIDPRU 8.4, the table below
illustrates a composition of regulatory capital (own funds) resources:
Composition of Regulatory Capital
Item
REGULATORY CAPITAL
TIER 1 CAPITAL
COMMON EQUITY TIER 1 CAPITAL
Fully paid up capital instruments
Share premium
Retained earnings
Accumulated other comprehensive income
Other reserves
Adjustments to CET1 due to prudential filters
1
2
3
4
5
6
7
8
9
10 Other funds
11
(-)TOTAL DEDUCTIONS FROM COMMON EQUITY TIER 1
19 CET1: Other capital elements, deductions and adjustments
20 ADDITIONAL TIER 1 CAPITAL
21
22
23
Fully paid up, directly issued capital instruments
Share premium
(-) TOTAL DEDUCTIONS FROM ADDITIONAL TIER 1
24 Additional Tier 1: Other capital elements, deductions and adjustments
25
26
27
28
29
TIER 2 CAPITAL
Fully paid up, directly issued capital instruments
Share premium
(-) TOTAL DEDUCTIONS FROM TIER 2
Tier 2: Other capital elements, deductions and adjustments
Amount (GBP thousands)
91,766
91,766
234,518
648
112,518
121,341
–
19
–
–
142,752
–
–
–
–
–
–
–
–
–
–
–
The table on the next page reconciles the composition of regulatory capital in the table above to the audited balance sheet of
this report.
155
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023FINANCIAL STATEMENTS
Own funds: reconciliation of regulatory own funds to balance sheet in the audited financial statements
Flexible template – rows to be reported in line with the balance sheet included in the audited financial statements of the investment firm.
Figures below are in GBP thousands unless noted otherwise
Item
a
Balance sheet as in
published / audited financial
statements 31-Mar-23
c
Cross-reference to
Composition of Regulatory
Capital table
Assets – Breakdown by asset classes according to the balance sheet in the audited financial statements
Intangible assets
Goodwill
Property, plant and equipment
Trade and other receivables
Financial assets
Cash and cash equivalents
Total Assets
90,629
38,586
3,378
241,682
9,921
121,037
505,233
Liabilities – Breakdown by liability classes according to the balance sheet in the audited financial statements
Deferred tax liability
Lease liability
Trade and other payables
Corporation tax payable
Total Liabilities
(21,493)
(2,168)
(255,460)
(5,131)
(284,252)
Shareholders’ Equity – Breakdown by shareholders’ equity classes according to the balance sheet in the audited financial statements
Ordinary shares
Share premium
Retained earnings
Capital redemption reserve
Own shares held
Total Shareholders' Equity
648
112,510
121,341
19
(13,537)
220,981
Line 11
Line 11
Line 4
Line 5
Line 6
Line 8
Line 11
156 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
FINANCIAL STATEMENTS 3 SEGMENTAL REPORTING
The Group operates only in one operating segment – Investment Management.
Management offers different fund products through different distribution channels. All key financial, business and strategic decisions
are made centrally by the Board, which determines the key performance indicators of the Group. The Group reviews financial
information presented at a Group level. The Board, is therefore, the chief operating decision-maker for the Group. The information
used to allocate resources and assess performance is reviewed for the Group as a whole. On this basis, the Group considers itself
to be a single-segment investment management business.
Revenue by location of customer
United Kingdom
Europe (ex UK)
Canada
Australia
Year ended
31-Mar-23
£’000
226,267
16,854
21
197
Year ended
31-Mar-22
£’000
232,191
13,158
24
198
243,339
245,571
During the year ended 31 March 2023 the Group had one customer contributing more than 10% of total revenue with an amount of
£25,043k (2022: no customer).
4 REVENUE AND COST OF SALES (GROSS PROFIT)
The Group’s main source of revenue is management fees. Management fees are for investment management or administrative
services and are based on an agreed percentage of the AUM. Initial charges and commissions are for additional administrative
services at the beginning of a client relationship, as well as ongoing administrative costs. Performance fees are earned from some
funds when agreed performance conditions are met.
Revenue
Performance fee revenue
Total revenue
Cost of sales
Gross profit
Total revenue from customers includes:
Year ended
31-Mar-23
£’000
Year ended
31-Mar-22
£’000
224,855
232,976
18,484
243,339
(13,569)
229,770
12,595
245,571
(14,252)
231,319
• Investment management on unit trusts, open-ended investment companies sub-funds, portfolios and segregated account.
• Performance fees on unit trusts, open-ended investment companies sub-funds, portfolios and segregated accounts.
• Fixed administration fees on unit trusts and open-ended investment companies sub-funds.
• Net value of sales and repurchases of units in unit trusts and shares in open-ended investment companies (net of discounts).
• Net value of liquidations and creations of units in unit trusts and shares in open-ended investment companies sub-funds.
• Box profits on unit trusts - the “at risk” trading profit or loss arising from changes in the valuation of holdings of units in Group
Unit Trusts to help manage client sales into, and redemptions from the trust.
• Less contractual rebates paid to customers.
The cost of sales includes:
• Operating expenses including (but not limited to) keeping a record of investor holdings, paying income, sending annual and
interim reports, valuing fund assets and calculating prices, maintaining fund accounting records, depositary and trustee oversight
and fund auditor fees.
• Sales commission paid or payable.
• External investment advisory fees paid or payable.
157
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023FINANCIAL STATEMENTS
Performance fee revenue:
Performance fee revenue include fees that are subject to arrangements whereby fees are deferred from prior periods but are only
recognised and received following another period of outperformance. During the year £18.5 million of performance fees are
recognised. In future periods another £1.5 million may be received. As there is no certainty that such deferred fees will be collectable
in future years, the Group’s accounting policy is to include performance fee revenue in income only when they become due and
collectable and therefore the element (if any) deferred beyond 31 March 2023 has not been recognised in the results for the year.
5 ADMINISTRATION EXPENSES
Staff related expenses
Wages and salaries
Fund management
Other staff
Social Security costs
Fund management
Other staff
Pensions
Fund management
Other staff
Share incentivisation expense
All staff
DBVAP expense
All staff
Severance compensation1
All staff
Member related expenses
Members drawings charged as
an expense
Fund management
Other members
Share incentivisation expense
members
All members
Non-staff related expenses
Professional services1
Depreciation and Intangible
asset amortisation & impairment
Other administration expenses
FY 2023
£’000
Fixed
FY 2023
£’000
Variable
5,109
16,559
2,963
5,547
1,300
2,805
442
1,946
–
–
–
–
–
–
–
2,354
2,777
3,995
FY 2023
FY 2022
£’000
Fixed
FY 2022
£’000
Variable
£’000
Total
30,178
8,072
3,606
10,962
22,106
12,045
8,608
4,105
1,300
2,805
2,388
442
1,946
2,354
2,354
2,777
2,777
3,995
3,995
59,507
2,782
1,757
421
1,324
–
–
–
–
–
–
–
3,446
2,405
704
14,449
35,359
49,808
5,501
4,198
9,699
1,225
7,263
5,308
34,232
7,836
FY 2022
£’000
Total
35,221
14,568
20,653
4,539
2,782
1,757
1,745
421
1,324
3,446
3,446
2,405
2,405
704
704
54,639
41,495
13,144
1,257
–
1,225
1,225
–
1,257
1,257
8,026
31,492
37,163
183,210
6,920
12,115
28,925
151,916
1Includes acquisition and re-organisation related costs for Architas, Neptune and Majedie.
158 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
FINANCIAL STATEMENTS Share incentivisation expense
- Share option expense employees
- Share option NIC expense
- Share incentive plan expense
- Share option related expenses
- Share option expense members
Year ended
31-Mar-23
£’000
Year ended
31-Mar-22
£’000
1,485
2,477
175
455
239
2,354
1,225
3,579
274
380
315
3,446
1,257
4,703
The average number of staff of the Group (as calculated on a weighted average basis over the year), excluding Non-executive
Directors, was 247 (2022: 198). All staff are involved in the investment management business of the Group.
Average number of staff during the year
Investment management
Management and operations
Sales and Marketing
Non-executive Directors
6 OPERATING PROFIT
The following items have been included in arriving at operating profit:
Foreign exchange (losses)/gains
Depreciation
Amortisation of intangible asset
Costs relating to Directors and staff (Note 5)
Auditors remuneration:
Fees payable to the Company’s auditors and its associates for the audit of the parent Company and
consolidated financial statements
Fees payable for subsidiary audits
Fees payable to the Company’s auditors and its associates for other services:
- services pursuant to legislation
- other services
Year ended
31-Mar-23
£’000
Year ended
31-Mar-22
£’000
57
120
70
6
253
49
87
62
5
203
Year ended
31-Mar-23
£’000
Year ended
31-Mar-22
£’000
(192)
3,883
27,608
(72)
2,474
9,641
106,530
103,956
599
150
219
154
444
80
228
50
The Group also pays audit fees for the funds as part of fund expenses costs, the total costs during the year amounted to £592,000
including £10,000 relating to non audit services (2022: £522,000, no non audit services).
159
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023FINANCIAL STATEMENTS 7 ADJUSTED PROFIT
Adjusted profit seeks to exclude the effects of non-recurring, non-operating (financing/ capital/ non-cash) and exceptional items
from the statutory measures. A reconciliation of the adjusted amounts to the IFRS reported amounts is shown below. Further details
can be found in our explanation of Alternative Performance Measures on page 34
Profit before tax
Write back of Majedie acquisition provision
Severance compensation and staff reorganisation costs1
Professional services2
Intangible asset amortisation and impairment
Adjustments
Adjusted profit before tax
Interest receivable
Adjusted operating profit
Year ended
31-Mar-23
£’000
49,301
(1,848)
3,995
8,026
27,609
37,782
87,083
(358)
86,725
Year ended
31-Mar-22
£’000
79,291
–
704
6,920
9,641
17,265
96,556
(4)
96,552
1Staff redundancy, settlement and professional fees in relation to Majedie acquisitions and fund disposals.
2Includes professional services fees incurred in the acquisition and re-organisation of Majedie and Architas and re-organisation related
costs for Neptune. Other professional services fees incurred in the normal course of operations are not included in this adjustment.
Adjusted earnings per share is reconciled in the tables below:
Basic earnings per share
Adjustments:
Taxation
Write back of Majade acquisition provision
Severance compensation and staff reorganisation costs2
Professional services2
Depreciation, Intangible asset amortisation and impairment
Adjustments:
Taxation at 19%
Adjusted basic earnings per share
Performance fees3
Adjusted basic earnings per share (excluding performance fees)
Year ended
31-Mar-23
£’000
Year ended
31-Mar-22
£’000
61.45
97.65
15.58
(2.89)
6.24
12.54
43.14
74.61
(25.85)
110.21
(8.83)
101.38
33.13
–
1.16
11.41
15.91
61.61
(30.26)
129.00
(7.02)
121.98
1 Performance fee revenues contribution calculated in line with operating margin of 38% (2022: 41%) and a taxation rate of 19%
(2022: 19%).
2Staff redundancy, settlement and professional fees in relation to Architas and Neptune acquisitions and fund disposals.
3Includes professional services fees incurred in the acquisition and re-organisation of Majedie and Architas and re-organisation
related costs for Neptune. Other professional services fees incurred in the normal course of operations are not included in this
adjustment.
160 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
FINANCIAL STATEMENTS
Diluted earnings per share
Adjustments:
Taxation
Write back of Majedie acquisition provision
Severance compensation and staff reorganisation costs2
Professional services3
Depreciation, Intangible asset amortisation and impairment
Adjustments:
Taxation at 19%
Adjusted diluted earnings per share
Performance fees1
Adjusted diluted earnings per share (excluding performance fees)
Adjusted operating profit
Gross profit
Adjusted operating margin
Year ended
31-Mar-23
£’000
Year ended
31-Mar-22
£’000
61.21
96.61
15.52
(2.88)
6.22
12.49
42.97
74.32
(25.75)
109.78
(8.80)
100.98
32.78
–
1.15
11.29
15.74
60.96
(29.94)
127.63
(6.95)
120.68
86,724
229,770
37.7%
96,552
231,319
41.7%
1 Performance fee revenues contribution calculated in line with operating margin of 38% (2022: 42%) and a taxation rate of 19%
(2022: 19%).
2Staff redundancy, settlement and professional fees in relation to Architas and Neptune acquisitions and fund disposals.
3Includes professional services fees incurred in the acquisition and re-organisation of Majedie and Architas and re-organisation
related costs for Neptune. Other professional services fees incurred in the normal course of operations are not included in this
adjustment.
161
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023FINANCIAL STATEMENTS
162 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
FINANCIAL STATEMENTS 8 INTEREST RECEIVABLE
Disclosures relating to the Group’s financial instruments risk management policies are detailed in note 2. Cash earns interest at floating
or fixed rates based on daily bank deposit rates. The weighted average effective interest rate on cash is 1.2% (2022: 0.0%).
9 DIVIDENDS
Ordinary Shares
Prior year second interim 50 pence per share (2022: 36 pence)
Dividend equivalent paid on exercise of options
First interim at 22 pence per share (2022: 22 pence)
Total
Year ended
31-Mar-23
£’000
Year ended
31-Mar-22
£’000
32,000
–
14,070
46,070
21,839
736
13,372
35,947
In addition, the Directors are proposing a second interim dividend in respect of the financial year ending 31 March 2023 of 50p
per share which will absorb an estimated £32.5m of shareholders’ funds. It will be paid on 4 August 2023 to shareholders who
are on the register of members at 30 June 2023, with shares going ex-dividend on 29 June 2023.
10 TAXATION
(a) Analysis of charge in year
Current tax:
UK corporation tax at 19% (2022: 19%)*
Adjustment in respect of prior periods
Total current tax
Deferred tax:
Deferred tax originated from timing differences
Adjustment in respect of prior periods to reflect tax rate change
Total charge in year
(b) Factors affecting current tax
Profit on ordinary activities before tax
Profit on ordinary activities at UK corporation tax at 19% (2022: 19%)*
Effects of:
Expenses not deductible for tax purposes
Depreciation in excess of capital allowances
Partnership tax adjustments
Tax relief on exercise of unapproved options
Overseas losses not deductible
Effect on deferred tax balances from change in corporate tax rates
Other adjustments
Income not chargeable for tax purposes
Write off of acquired deferred tax
Adjustment in respect of prior periods
Total taxation
Year ended
31-Mar-23
£’000
Year ended
31-Mar-22
£’000
13,991
1,005
14,996
(5,023)
–-
9,973
49,301
9,367
421
–
196
(80)
(429)
–
(653)
(351)
497
1,005
9,973
17,109
(186)
16,923
(1,460)
4,625
20,088
79,291
15,065
341
(37)
389
(321)
212
4,625
–
–
–
(186)
20,088
No deferred tax asset has been recognised in respect of overseas losses as it is not expected that such losses will be deductible
in future periods. Aggregate unused tax losses not recognised are £2.1m and have no expiry date.
163
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023FINANCIAL STATEMENTS
11 DEFERRED TAX
Deferred tax assets
Balance as at 1 April
Acquired Deferred tax on Majedie Acquisition
Deferred tax on option IFRS2 charge
Deferred tax acquired LPML
Balance as at 31 March
Deferred tax liability
Balance as at 1 April
Deferred tax prior year adjustment to reflect new rates
Deferred tax recognised on acquired intangible asset (See note 13)
Deferred tax on intangible assets
Balance as at 31 March
Net deferred tax liability
2023
£’000
1,612
497
(447)
(497)
1,165
2023
£’000
(18,213)
–
(10,412)
5,967
(22,658)
(21,493)
2022
£’000
1,984
–
(372)
–
1,612
2022
£’000
(15,420)
(4,625)
–
1,832
(18,213)
(16,601)
The deferred tax position as at 31 March 2023 has been calculated based on the tax rate of 25%.
12 EARNINGS PER SHARE
The calculation of basic earnings per share is based on profit after taxation for the year and the weighted average number of
Ordinary Shares in issue for each year. The weighted average number of Ordinary Shares was 63,998,999 for the year (2022:
60,628,715). Shares held by the EBT are not eligible for dividends and are treated as cancelled for the purposes of calculating
earnings per share.
Diluted earnings per share are calculated on the same bases as set out above, after adjusting the weighted average number of
Ordinary Shares for the effect of options to subscribe for new Ordinary Shares or Ordinary Shares held in the EBT that were in
existence during the year ended 31 March 2023. The adjusted weighted average number of Ordinary Shares so calculated
for the year was 64,250,561 (2022 : 61,277,480). This is reconciled to the actual weighted number of Ordinary Shares
as follows:
Weighted average number of Ordinary Shares
Weighted average number of dilutive Ordinary shares under option:
- to the Liontrust Long Term Incentive Plan
- to the Liontrust Option Plan
Adjusted weighted average number of Ordinary Shares
As at
31-Mar-23
number
As at
31-Mar-22
number
63,998,999
60,628,715
247,003
4,559
625,902
22,863
64,250,561
61,277,480
Details of the options outstanding at 31 March 2023 to Directors are set out in the Directors’ Remuneration Report on page 133.
164 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
FINANCIAL STATEMENTS 13 ACQUISITION OF MAJEDIE ASSET MANAGEMENT AND NEPTUNE
Majedie
The following table summarises the consideration paid for Majedie Asset Management (‘Majedie’), the fair value of the assets
acquired and the liabilities assumed at the Completion Date.
Consideration at 1 April 2022
Fair value of consideration payable:
Equity instruments (3,683,220 shares issued on completion)
Cash
Contingent consideration
Total consideration
Recognised amounts of identifiable assets acquire and liabilities assumed:
Fixed assets
Cash and cash equivalents
Trade and other receivables
Trade and other payables
Intangible assets - Investment Management contracts
Intangible assets - Segregated clients
Deferred tax liabilities
Goodwill
Net assets acquired
£’000
48,175
4,036
1,849
54,060
90
17,633
10,650
(17,976)
27,056
16,010
(10,412)
11,009
54,060
On 1 April 2022 the Company acquired the entire issued share capital of Majedie Asset Management Limited (“Majedie”)
for a cost of £54.060 million. The consideration was funded by an issue of 3,683,220 shares raising £48.175 million. The
acquisition adds a further highly regarded investment team and distinct investment process, the Global Fundamental team; and
provides broader distribution and growth opportunities in our institutional and investment trust business. The goodwill of £11.009
million relating to from the acquisition, allocated to the Global Fundamental fund management team CGU, is attributable to the
new business relating to investment management contracts and segregated clients and the expected economies of scale, growth
opportunities and efficiencies from combining the operations of Majedie with the Group.
Reorganisation costs of £8.459 million have been charged to administrative expenses in the consolidated statement of the
comprehensive income for the period to 31 March 2023. These costs have been included within note 7.
Two further tranches of deferred consideration are payable subject to conditions:
1. Performance fee consideration – a maximum of 538,674 shares in Liontrust is payable if performance fee targets are met by
31 March 2025 subject to an AUM target at 31 March 2023. At 31 March 2023 the AuMA target had not been met and
therefore the performance fee consideration is not payable.
2. Client consideration – a maximum of £20 million payable subject to Liontrust being appointed as investment manager by a
specified client before 31 March 2023. The expected value of this consideration, based on a probability weighted expected
returns model, is £1.849 million. As at 31 March 2023 the Client had not appointed Liontrust as investment manager and
therefore the Client consideration is not payable. The fair value assigned to this consideration has therefore been written back
resulting in income of £1.849 million.
The identifiable assets acquired are accounted for at fair value. The fair value of intangible assets acquired was calculated using a
Multiple Periods Excess Earnings Model (‘MPEEM’) which takes into account the future expected revenue and costs linked to the assets
acquired. Due to the different characteristics of fund management contracts and segregated client relationships the related intangible
assets were modelled separately. The MPEEM model assisted the Group in arriving at the valuation of £27,056 million for the fund
management contracts and £16.010 million for segregated client relationships which management believe is appropriate.
The material accounting judgements used by management in the MPEEM included the useful economic life of the assets (10 years
for funds, 5 years for segregated), the discount rate (12.7%), and net AuMA growth rate (effective, -1.9% and -8.5% for funds and
segregated respectively).
165
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023FINANCIAL STATEMENTS Neptune
On 1 October 2019 (“Completion Date”) the Company acquired the entire issued share capital of Neptune Investment
Management Limited. The Share Purchase Agreement in relation to the acquisition provided that an earnout of 661,813 Liontrust
Shares (“Tranche Two Consideration Shares”) is payable if the AuMA managed by the acquired team exceeded £4bn on the
3rd anniversary of the Completion Date. The seller could extend this term if the MSCI World Index fell by 10% or more in the
preceding 12 months prior to the 3rd anniversary of the completion date. As at 1 October 2022 the MSCI World Index had
fallen by more than 10% and therefore the earnout provision will be retested at 1 October 2023. At 31 March 2023 the fair
value of the Tranche Two Consideration Shares was assessed as NIL and no contingent liability has been recognised.
14 GOODWILL
Goodwill is allocated to the CGU to which it relates as the underlying funds acquired in each business acquisition are clearly identifiable
to the ongoing investment team that is managing them. For all four CGUs, an assessment was made in relation to impairment of the
goodwill where the recoverable amount, based on a value in use, was calculated using an earnings model which used key assumptions
such as discount rate, terminal growth rate and net AuMA growth rate. For ATI and Neptune, no reasonable changes made to key
assumptions lead to an impairment. The projected cash flows used within the goodwill model is based on a 5-year period where
the terminal growth is used for years beyond that, and forecasts have been approved by senior management. The discount rate was
derived from the Group’s weighted average cost of capital and takes into account the weighted average cost of capital of other market
participants. The net AuMA growth rate is a combination of three variables: AUM market growth rate, fund flows and fund attrition. The
net AuMA growth rate is determined by using external sources to estimate future growth based on historic equities/bonds performances.
In addition, the terminal growth rate is also based on external sources too and based on long term inflation expectations. See table
below for details.
Goodwill
Goodwill
Discount
Discount
Terminal
Terminal
Net AuMA
CGU
ATI
Neptune
Architas
Majedie
Total
2023
£’000
2022
£’000
11,873
11,873
7,753
7,753
7,951
11,009
7,951
N/A
38,586
27,577
Rate
2023
13.80%
13.80%
13.80%
13.80%
Rate
Growth Rate
Growth Rate
Growth Rate
2022
2023
2022
13.00%
13.00%
13.50%
N/A
2%
2%
2%
2%
2%
2%
2%
N/A
2023
7%
5.5%
0.2%
3.5%
Net AuMA
Growth Rate
2022
8.47%
9.38%
5.41%
N/A
Based on key assumptions in the table, Architas recoverable amount was £41,738m and the headroom above impairment was
£0.10m. Majedie’s recoverable amount was £46,954m and the headroom above impairment was £2.59m. In relation to
Architas CGU, the headroom would be reduced to nil if the AuMA growth was reduced by less than 0.1% or if the discount rate
was increased by less than 0.1%. For Majedie CGU, the headroom would be reduced to nil if the AuMA growth was reduced
from 3.5% to 2.6% or if the discount rate was increased from 13.8% to 14.5%. The reasonable plausible downside scenario in
the terminal growth rate does not lead to a material impairment. The Majedie net AuMA growth rate of 3.4% is higher than the
acquisition assumptions of -1.9% for funds and -8.5% for segregated accounts used at acquisition due to changes in economic
and market conditions and high levels of outflows experienced in the period.
Sensitivity analysis was carried out on the Architas and Majedie Goodwill models to assess the impact of reasonable plausible
downside scenarios on the discount rate, the AuMA effective growth rate assumptions and new business assumptions. In relation
to Architas sensitivity, changing the discount rate from 13.8 % to 14.5%, AuMA effective growth rate from 0.2% to -4.0% and
new business from £5,000k to £Nil would lead the Goodwill being fully impaired. For Majedie Goodwill (Funds and Segregated
Clients combined) the discount rate being changed from 13.8% to 14.5%, the AuMA effective growth rate from 3.4% to -2.5%
and new business assumption from £300,000k to £50,000k also leads to the Goodwill being fully impaired.
166 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
FINANCIAL STATEMENTS
15 INTANGIBLE ASSETS
The Group recognises five intangible assets relating to investment management contracts and segregated clients arising on
business acquisitions. An assessment is made at each reporting date, on a standalone basis for each intangible asset, as to
whether there is any indication that an asset in use may be impaired. If any such indication exists and the carrying value exceeds
the estimated recoverable amount at the time, the assets are written down to their recoverable amount. The recoverable amount is
measured as the greater of fair value less costs to sell and value in use. The valuation models used the same assumptions as those
in the goodwill impairment review detailed in note 14. The assessment made at 31 March 2023 did not indicate any indicators
of impairment in the value of the ATI or Neptune intangible assets.
For Majedie, indicators of impairment were identified for both the investment management contracts and segregated clients
intangible assets as at 31 March 2023 due to higher than expected fund outflows and negative market returns leading to actual
revenues being lower than originally forecast. The value of the intangible assets have therefore been tested for FY23 which
has resulted in a higher carrying value than value in use hence an impairment of the Majedie investment management contract
intangible of £4.016 million.
For Architas, indicators of impairment were identified due to higher than expected fund outflows and negative market returns leading
to forecast revenues being lower than originally forecast. The value of the intangible assets have therefore been tested for FY23
which has resulted a higher carrying value than value in use hence an impairment of the Architas investment management contract
intangible of £8.800 million.
As at 31 March 2023
Description
Investment management contracts acquired as part of ATI acquisition
Investment management contracts acquired as part of Neptune acquisition
Investment management contracts acquired as part of Architas acquisition
Investment management contracts acquired as part of Majedie acquisition - Funds
Investment management contracts acquired as part of Majedie acquisition - Segregated
Carrying value
£’000
4,800
19,682
32,793
20,546
12,808
Remaining
amortisation
period
4 Years
6½ Years
7½ Years
9 Years
4 Years
167
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023FINANCIAL STATEMENTS Cost
Balance as at 1 April
Additions:
Investment
management
Segregated
contracts
2023
£’000
clients
2023
£’000
Total
2023
£’000
Total
Investment
management
contracts
2022
£’000
115,113
–
115,113
115,113
Additions arising on acquisition of Majedie*
Balance as at 31 March
27,056
142,169
16,010
16,010
43,066
–
158,179
115,113
Accumulated amortisation and impairment
Balance as at 1 April
Amortisation for the year
Impairment for the year
Balance as at 31 March
Net Book Value
As at 31 March 2023
As at 31 March 2022
As at 31 March 2021
*See note 13
39,942
11,590
12,816
64,348
–
3,202
–
3,202
39,942
14,792
12,816
67,550
30,301
9,641
–
39,942
£’000
90,629
75,171
84,812
Sensitivity analysis was carried out on the Architas and Majedie models to assess the impact of reasonable plausible downside
scenarios on both the discount rate, and the net AuMA growth rate assumptions. In relation to Architas sensitivity, changing the
discount rate from 13.8 % to 14.5% leads to an impairment of £1,834k and changing the net AuMA growth rate from 1.4% to
-1.4% leads to an impairment of £5,561k. The impact of both of these scenarios leads to an impairment of £6,0815k.
For Majedie the discount rate sensitivity applied for both Funds and Segregated Clients is consistent with Architas (13.8% to
14.5%) leading to an reduction in headroom of £1,040k and £897k but no impairment respectively. Decreasing the AumA
effective rate from 0.4% to -0.8% for the Majedie Funds would lead to a reduction in headroom of £2,194k and for reducing the
AumA effective rate from 1.7% to -4.0% for Segregated Client Intangible would lead to a reduction in headroom of £5,558k. The
cumulative impact of the change in discount rate and increase AumA effective rate would lead to an impairment of £440k on the
Majedie Fund Contract and a reduction in headroom of £6,237k Segregated Client Intangible combined.
16 PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment is made up of leasehold improvements, office equipment, computer equipment and right-of-use
(ROU) assets.
Property, plant and equipment is stated at cost, less accumulated depreciation and any provision for impairment.Depreciation is
calculated on a straight-line basis to allocate the cost of each asset over its estimated useful life:
Leasehold improvements
Office equipment
Computer equipment
ROU assets
lower of the estimated useful and the remaining lease term on straight-line basis
3-10 years on a straight-line basis
3 years on a straight-line basis
lease term on a straight-line basis
168 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
FINANCIAL STATEMENTS The useful economic lives and residual values are reviewed at each financial period end and adjusted if appropriate. Specific
items are derecognised upon disposal or when no future economic benefits are expected from its use. Any gain or loss arising on
the disposal of an asset, calculated as the difference between the net disposal proceeds and the carrying amount of the item, is
included in the income statement in the year the item is sold or retired.
Year to 31 March 2023
Cost
As at 31 March 2022
Majedie acquisition
Additions
As at 31 March 2023
Accumulated depreciation
As at 31 March 2022
Majedie acquisition
Charge for the year
As at 31 March 2023
Net Book Value
As at 31 March 2023
As at 31 March 2022
Year to 31 March 2022
Cost
As at 31 March 2021
Additions
Impairment loss
As at 31 March 2022
Accumulated depreciation
As at 1 April 2021
Charge for the year
As at 31 March 2022
Net Book Value
At 31 March 2022
At 31 March 2021
ROU
Assets
£’000
Leasehold
Improvements
£’000
Office
Equipment
£’000
Computer
Equipment
£’000
Total
£’000
7,962
1,281
–
1,107
899
16
9,243
2,022
4,997
495
1,001
6,493
2,750
2,965
924
869
105
1,898
124
183
557
403
12
972
449
368
77
894
78
108
1,128
10,754
762
230
3,345
258
2,120
14,357
726
755
213
7,096
2,487
1,396
1,694
10,979
426
402
3,378
3,658
ROU
Assets
£’000
Leasehold
Improvements
£’000
Office
Equipment
£’000
Computer
Equipment
£’000
7,597
1,656
(1,291)
7,962
2,880
2,117
4,997
2,965
4,717
1,013
94
–
1,107
752
172
924
183
261
485
72
–
557
413
36
449
108
72
784
344
–
1,128
577
149
726
402
207
Total
£’000
9,879
2,166
(1,291)
10,754
4,622
2,474
7,096
3,658
5,257
169
Depreciation has been included in the Consolidated Statement of Comprehensive Income within administration expenses.
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023FINANCIAL STATEMENTS Lease liability
Opening balance
Additions
Transfer to trade and other payables
Rent & interest charge for the year
Closing balance
As at
31-Mar-23
£’000
As at
31-Mar-22
£’000
3,667
1,306
–
4,973
(1,385)
3,588
5,016
1,506
(1,203)
5,319
(1,652)
3,667
Measurement of lease liability
All existing lease agreements as at 1 April 2016 were re-evaluated for the purposes of IFRS 16. Management considered the break
clauses and expiry dates for all the London office floor leases and as a result there was a significant increase in the lease liability at the
date of initial application.
Lease liability
Current
Non-current
The undiscounted cash payments that will be made until end of the lease term are as follows:
Within 1 year
Between 2 to 5 years
More than 5 years
As at
31-Mar-23
£’000
As at
31-Mar-22
£’000
1,420
2,168
3,588
892
2,775
3,667
£’000
1,435
1,820
333
Measurement of ROU asset
At the initial application date, 1 April 2019, the ROU asset was measured at the amount equal the lease liability with an IFRS 16 reserve
adjustment made to retained earnings for the lease prepayments accounted for in the prior financial year ending 31 March 2019.
ROU asset
Office space
Depreciation on ROU asset
Finance costs
Cash outflow for leases for the year
Additional profit or loss and cash flow information
The Group did not sublease any office premises during the current financial year.
Sale and leaseback transactions
There have been no sale and leaseback transactions in the current financial year.
As at
31-Mar-23
£’000
As at
31-Mar-22
£’000
2,750
2,750
1,496
83
1,328
2,965
2,965
2,117
142
1,889
170 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
FINANCIAL STATEMENTS 17 TRADE AND OTHER RECEIVABLES
Trade receivables
- Fees receivable
- Unit trust sales and cancellations
Prepayments and accrued income
As at
31-Mar-23
£’000
As at
31-Mar-22
£’000
20,732
29,989
212,001
200,754
8,949
4,753
241,682
235,496
All financial assets listed above are non-interest bearing. The carrying amount of these non-interest bearing trade and other
receivables approximates their fair value.
As at 31 March 2023, trade receivables of £nil (2022: £nil) were past due but not impaired. Expected credit losses are immaterial.
18 FINANCIAL ASSETS
The Group holds financial assets that have been categorised within one of three levels using a fair value hierarchy that reflects the
significance of the inputs into measuring the fair value. These levels are based on the degree to which the fair value is observable
and are defined as follows:
• Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets and
liabilities;
• Level 2 fair value measurements are those derived from inputs other than quoted prices included within level 1 that are
observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices);
• Level 3 fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are
not based on observable market data.
As at the balance sheet date all financial assets are categorised as Level 1.
Under IFRS9 all financial assets are categorised as Assets held at fair value through profit and loss
The Group’s financial assets represent shares in the GF Global Strategic Equity Fund, The GF European Smaller Companies Fund,
The GF European Strategic Equity Fund, The GF Asia Income Fund, and The GF UK Growth Fund (all sub-funds of Liontrust Global
Funds PLC) and are valued at bid price); and units in the Liontrust Global Income Fund, The Liontrust Macro Equity Income Fund,
The Liontrust Asia Income Fund and The Liontrust UK Growth Fund. The gain on the fair value adjustments during the year net of tax
was £618,000 (2022 : £26,000). Foreign currency assets are translated at rates of exchange ruling at the balance sheet date.
Financial assets in Level 1
UK Authorised unit trusts & UK authorised ICVCs
Ireland Open Ended Investment company
Total Financial Assets
As at 31-Mar-23
As at 31-Mar-22
Assets held at fair
value through
profit and loss
£’000
Assets held at fair
value through
profit and loss
£’000
7,114
2,807
9,921
3,498
670
4,168
171
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023FINANCIAL STATEMENTS 19 TRADE AND OTHER PAYABLES
Current Liabilities
Trade payables – unit trust repurchases and creations
Other payables including taxation and social security
Lease liability
DBVAP liability
Other payables
Non current Liabilities
Lease liability
20 ORDINARY SHARES
As at
31-Mar-23
£’000
As at
31-Mar-22
£’000
211,791
201,931
1,422
1,420
2,438
38,389
255,460
549
893
2,404
49,892
255,669
As at
31-Mar-23
£’000
As at
31-Mar-22
£’000
2,168
2,775
Allotted, called up and fully paid ordinary shares of 1 pence
As at 1 April
Issued during the year
As at 31 March
2023
Shares
2023
£’000
2022
Shares
2022
£’000
61,252,164
612
61,058,960
3,683,220
36
193,204
64,935,384
648
61,252,164
610
2
612
172 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
FINANCIAL STATEMENTS 21 RELATED UNDERTAKINGS
The Companies Act 2006 requires disclosure of certain information about the Group’s related undertakings which is set out in this
note. Related undertakings comprise subsidiaries, joint ventures, associates and other significant holdings. Significant holdings are
where the Group either has a shareholding greater than or equal to 20% of the nominal value of any share class, or a book value
greater than 20% of the Group’s assets.
a) The direct related undertakings of the Company as at 31 March 2023 are listed below
Name of undertaking
Liontrust Investment Funds Limited
Liontrust Investment Services Limited
Liontrust Investment Management Limited
Liontrust Portfolio Management Limited
Liontrust International Luxembourg SA
GF European Strategic Equity Fund CF
GF European Smaller Companies CF
GF SF Euro Corporate Bond Fd CF FOUNDERACC
GF High Yield Bond Fund A5 Dist Hdg
GF Absolute Return Bond Fund A1 AC
GF SF Global Growth Fund A1 AC EUR Acc
GF SF Global Growth Fund A8 AC EUR Acc
GF SF Global Growth Fund D1 A CHF Acc
GF SF Global Growth Fund C1 D GBP Acc
GF SF Global Growth Fund D8 CHF Acc
Liontrust Monthly Income Bond Fund Z Gross Inc
Liontrust UK Growth Fund S Acc
Liontrust UK Growth Fund S Inc
GF SF Global Growth Fund C8 D GBP Acc
Liontrust GF International Equity Fund Class F Acc
Liontrust GF Sustainable Future Multi Asset Global Fund D5 CHF ACC
GF SF European Corporate Bond Fund A5
GF SF European Corporate Bond Fund A1
Liontrust European Dynamic Fund I Class (Acc)
GF SF Global Growth Fund A8 EUR Dist
b) The indirect related undertakings of the Company as at 31 March 2023 are listed below
Name of undertaking
Liontrust Fund Partners LLP*
Liontrust Investment Partners LLP*
Country of
incorporation
UK1
UK1
UK1
UK1
Luxembourg2
Ireland3
Ireland3
Ireland3
Ireland3
Ireland3
Ireland3
Ireland3
Ireland3
Ireland3
Ireland3
UK
UK
UK
Ireland3
Ireland3
UK
Ireland3
Ireland3
UK
Ireland3
Country of
incorporation
UK1
UK1
1Registered office: 2 Savoy Court, London, WC2R 0EZ
2Registered office: 18 Val Sainte Croix, Luxembourg L-1370
3Registered office: 1 Dockland Central, Guild Street, International Financial Services Centre, Dublin 1, Ireland
*Consolidated entities’
% held
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
66%
60%
56%
36%
35%
34%
% held
100%
100%
173
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023FINANCIAL STATEMENTS 22 OWN SHARES AND OPTIONS
Approval was given at a General Meeting in February 2016 for the grant of options under the Liontrust Long Term Incentive Plan
(the “LTIP”). The Board adopted the Liontrust Company Share Option Plan (the “CSOP”) in June 2018. The options granted under
the LTIP and CSOP, including to the Executive Directors, were as follows:
The CSOP scheme is an HMRC approved company share option plan that is aimed at those employees not covered by the LTIP
scheme. The options become exercisable between the 3rd and 10th anniversary of the issue date.
The phantom award scheme is an historic unapproved scheme to cover international employees. It is a cash settled scheme
arranged to mirror the LTIP arrangements.
Options
Exercised
(75,923)
(54,000)
Lapsed
–
–
–
(33,173)
Issue Date
22 June 2017
27 June 2018
8 April 2019
12 August 2019
12 August 2019
8 July 2020
12 June 2020
23 June 2021
8 July 2021
23 June 2022
2 Sept 2022
Issue Date
5 September 2017
22 June 2017
27 June 2018
27 June 2018
8 April 2019
12 August 2019
12 August 2019
8 July 2020
12 June 2020
23 June 2021
8 July 2021
1 April
2022
Options
Granted
75,923
110,008
33,173
283,621
24,928
190,503
19,552
155,130
17,193
–
–
1 April
2021
117,281
151,846
272,013
29,304
33,173
283,621
27,552
190,503
21,056
–
–
–
–
–
–
–
–
–
390,287
51,600
Options
Granted
–
–
–
–
–
–
–
–
–
–
–
155,130
17,714
(166,207)
(15,744)
–
–
–
–
–
–
Options
Exercised
(117,281)
(75,923)
(162,005)
(29,304)
–
–
–
–
–
–
–
31 March
2023
–
56,008
–
117,414
9,184
190,503
Exercise
price
Nil
Nil
Nil
Nil
£7.62
Nil
19,552
£13.30
155,130
Nil
–
–
–
–
–
(5,731)
11,462
£19.18
–
390,287
(1,200)
50,400
Lapsed
–
–
–
–
–
–
31 March
2022
–
75,923
110,008
–
33,173
283,621
(2,624)
24,928
–
190,503
Nil
£8.33
Exercise
price
Nil
Nil
Nil
6.14
Nil
Nil
7.62
Nil
(1,504)
19,552
£13.30
–
155,130
Nil
(521)
17,193
£19.18
Scheme
LTIP
LTIP
Phantom
LTIP
CSOP
LTIP
CSOP
LTIP
CSOP
LTIP
CSOP
Scheme
LTIP
LTIP
LTIP
CSOP
Phantom
LTIP
CSOP
LTIP
CSOP
LTIP
CSOP
174 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
FINANCIAL STATEMENTS
Under the Liontrust Members Long term Incentive Plan (‘mLTIP’), certain individual members have been entitled to a variable
allocation in the financial year, a proportion of which is paid early and applied on the Member’s behalf in acquiring ordinary
shares in the capital of LAM , which entitle such individual member to a future amount dependant on performance conditions being
met. The amount of the award to the member is calculated on the basis of a percentage of fixed allocation. The amounts awarded,
in terms of total number of Ordinary shares, to individual members were as follows:
Issue Date
1 April 2022
Granted
Exercised
Lapsed
31 March
2023
Exercise
price
22 June 2017
22 June 2018
12 August 2019
7 July 2020
19 July 2021
23 June 2022
35,652
18,896
94,411
57,605
33,700
–
–
–
–
–
–
84,854
(35,652)
(3,779)
(66,090)
–
–
–
–
–
–
–
–
–
–
15,117
28,321
57,605
33,700
84,854
Nil
Nil
Nil
Nil
Nil
Nil
Issue Date
1 April 2021
Granted
Exercised
Lapsed
31 March
2022
Exercise
price
22 June 2017
22 June 2018
12 August 2019
7 July 2020
19 July 2021
75,878
18,896
94,411
57,605
–
–
–
–
–
33,700
(40,226)
(11,338)
–
–
–
–
–
–
–
–
35,652
7,558
94,411
57,605
33,700
Nil
Nil
Nil
Nil
Nil
Details of the LTIP options can be found in the Directors’ Remuneration report.
Scheme
mLTIP
mLTIP
mLTIP
mLTIP
mLTIP
mLTIP
Scheme
mLTIP
mLTIP
mLTIP
mLTIP
mLTIP
At 31 March 2023, the EBT owned 1,146,288 shares (2022: 767,971) at a cost of £13,536,517 (2022: £7,674,252).
Dividends on these shares have been waived and they are treated as cancelled for the purposes of calculating the earnings per
share of the Group. As at 31 March 2023 the market value of the shares was £11,715,000 (2022: £9,784,000).
175
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023FINANCIAL STATEMENTS 23 SHARE BASED PAYMENTS
Liontrust Asset Management PLC (“Company”, “LAM”) currently operates a number of equity-settled, and cash-settled, share-based
compensation plans under which the entity receives services from employees and members as consideration for equity-linked
instruments (share options, phantom share awards and share awards with vesting conditions).
(a) The Company Share Option Plan (“CSOP”) permits the Company to grant share options with a strike price set at the market
price at the date of issue over ordinary shares in the capital of LAM to qualifying employees. The equity settled options vest
after 3 years and do not have any performance conditions attached.
(b) The Employees Long Term Incentive Plan (“eLTIP”) is intended to provide long term reward, incentivise strong performance and
retain Executive Directors and senior employees employed by LAM. The eLTIP issues nil-priced options with vesting, exercise
and holding conditions. The equity settled options vest after 3 years subject to various performance targets detailed below:
• Absolute TSP performance condition – 20% of the award vest subject to the Company’s absolute Total Shareholder Return (”TSR”)
performance from the grant date to the vesting date.
• Relative TSR performance condition – 20% of the award vest subject to the Company’s relative TSR performance compared to
the FTSE All Share Index (“Index”) with the Index price calculated based on the 30 day average preceding, and at the end of,
the performance period.
• EPS performance condition – 30% of the award will vest subject tot he Company’s diluted earnings per share (”EPS”) performance
with EPS growth and vesting at the same thresholds as the TSR vesting percentages.
• Strategic performance condition – 30% of the award will vest subject to the Company’s performance against certain strategic
targets which include growth in assets under management, investment performance, and personal appraisal/HR performance.
(c) The Members Long Term Incentive Plan (“mLTIP”) is intended to provide long term reward, incentivise strong performance and retain
senior management executives who are members of Liontrust Investment Partners LIP (“LIP”) and Liontrust Fund Partners LLP (“LFP”).
The mLTIP awards equity settled options to members with vesting, exercise and holding conditions aligned to those of the eLTIP.
(d) The Phantom Awards are intended to provide long term reward, incentivise strong performance and retain senior management
employed by Liontrust International (Luxembourg) S.A. (“LILSA”). Phantom awards are contractual arrangements to provide
equivalent reward and incentivisation as the eLTIP to employees of the Luxembourg subsidiary. These options are cash settled.
Unvested options for the year:
Outstanding at 1 April 2022
Granted during year
Exercised during year
Lapsed during year
Outstanding at 31 March 2023
Excerciseable at 31 March 2023
Unvested options for the year:
Outstanding at 1 April 2021
Granted during year
Exercised during year
Lapsed during year
Vested but not exercised during year
Outstanding at 31 March 2022
Excerciseable at 31 March 2022
176 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
Number of
shares
Weighted
average
exercise price
1,126,620
526,741
(417,395)
(40,104)
1,195,862
–
0.29
0.81
–
Number of
shares
Weighted
average
exercise price
1,418,827
206,544
(6,657)
(458,921)
(33,173)
1,126,620
–
0.37
0.69
–
FINANCIAL STATEMENTS Valuation approach
The fair value of the options granted during the year were calculated at the measurement date using the valuation models:
• Monte Carlo – for options subject to the absolute and relative TSR performance conditions in the eLTIP, mLTIP and Phantom
Awards; and
• Black Scholes – for options under the eLTIP, mLTIP and Phantom Awards with non-market based performance conditions, and for
all CSOP options.
The specific adjustments made to value the share options subject to the absolute TSR performance condition are as follows:
1. simulated one possible path of the daily share price (assuming nil) dividends) from the grant/measurement dates to the end of
the performance period;
2. calculated the 30 day average Company share at the end of the performance period;
3. used the total Company share price calculated in step 2 to calculate the share price return over the performance period;
4. calculated the percentage of options vesting on the vesting date using the vesting criteria;
5. assessed the Company share price on vesting at the vesting date and the present value of a nil-cost option over a single share
at that date, discounted at the grant/measurement date using a risk-free rate;
6. applied the percentage of options calculated in step 4 to the present value of the nil-cost call option in step5; and
7. run steps 1 to 5 for 100,000 iterations and taken the mean-average outcome to arrive at the assessed fair value per option.
The specific adjustments made to value the share options subject to the relative TSR performance condition are as follows:
1. simulated one possible path of the daily Company share price and one possible path of daily index price from the grant/
measurement dates to the end of the performance period. Company and index prices are not correlated;
2. calculated the 30 day average Company share price and 30 day average index price at the end of the performance period;
3. used the total Company share price and Index price calculated in Step 2 to calculate the share price return and Index return
over the Performance Period;
4. measured the difference between the Company share price return and Index return to calculate the percentage of options
vesting on the vesting date using the vesting criteria;
5. assessed the Company share price on vesting at the vesting date and the present value of a nil-cost option over a single share
at that date, discounted to the grant date/measurement date using a risk-free rate;
6. applied the percentage of options calculated in Step 4 to the present value of the nil-cost call option in Step 5; and
7. run steps 1 to 5 for 100,000 iterations and taken the mean-average outcome to arrive at the assessed fair value per option.
Measurement date
• Equity settled transactions – date the awards were granted
• Cash settled transactions – financial reporting date
Inputs common to both valuation models
Plan
CSOP
eLTIP
mLTIP
Share price at
valuation
date
Exercise price
at valuation
date
Option life
£8.33
£9.40
£9.40
£8.33
3.0 years
£nil
£nil
3.0 years
3.0 years
Valuation date
02-Sep-22
23-Jun-22
23-Jun-22
Expected
volatility
45.12%
43.68%
43.68%
Dividend
yield
Risk free
interest rate
8.53%
0.00%
0.00%
2.87%
1.94%
1.94%
177
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023FINANCIAL STATEMENTS Fair value conclusion
Plan
Options granted during year to 31 March 2023:
CSOP
eLTIP
mLTIP
Share incentivisation expense by plan type
Share based payment plan – equity settled
IFRS2 charge – employees
IFRS2 charge – members
Share based payment plan – cash settled
Employees
Equity share options issued
Option settlement expense
Share option NIC expense
Cost of matching SIP shares
Plan administration costs
liquidations
24 RELATED PARTY TRANSACTIONS
During the year the Group received fees from unit trusts and
ICVCs under management of £203,091,000 (2022 :
£228,832,000). Transactions with these funds comprised
creations of £12,244,561,000 (2022 : £7,276,647,000)
and
:
£4,699,727,000). Directors can invest in funds managed by
the Group on commercial terms that are no more favourable
than those available to staff in general. As at 31 March
2023 the Group owed the funds £211,790,000 (2022
: £201,931,000) in respect of creations and was owed
£232,733,000 (2022 : £230,743,000) in respect of
cancellations and fees.
of £12,244,476,000
(2022
During the year the Group received fees from offshore funds
under management of £13,234,000 (2022 : £8,776,000).
Transactions with these funds comprised purchases of £0
(2022 : £0) and sales of £0 (2022 : £0). As at 31 March
2023 the Group was owed £1,177,000 (2022 : £873,000)
in respect of offshore fund fees.
Number of
shares
Weighted
average fair
value £
50,400
39,816
390,287
922,638
84,854
200,595
525,541
1,163,049
Year ended
31-Mar-23
£’000
Year ended
31-Mar-22
£’000
1,485
431
1,886
554
455
2,371
480
2,920
794
704
175
354
455
410
239
315
4,034
4,703
is disclosed in the table in section 3.1 of the Directors
Remuneration Report on page 124. The charge recognised
in the statement of the comprehensive income in relation to
Directors share options was £497,000 (2022: £1,125,000).
Interests in structured entities
IFRS 12 requires certain disclosures in respect of interests
in
joint arrangements, associates and
unconsolidated structured entities.
subsidiaries,
A structured entity is defined as an entity that has been designed
so that voting or similar rights are not the dominant factor in
deciding who controls the entity, such as when any voting
rights relate to administrative tasks only, or when the relevant
activities are directed by means of contractual arrangements.
The Group has assessed whether the funds it manages are
structured entities and concluded that funds managed by the
Group are structured entities unless substantive removal or
liquidation rights exist.
Compensation to key management personnel (Directors) is
disclosed in table 1.1 of the directors in table 1.1 of the
Directors’ Remuneration Report on page 117. The aggregate
gains made by Directors on the exercise of share options
The Group has interests in these funds through the receipt of
management and other fees and, in certain funds, through
ownership of fund units. The Group’s investments in these
funds are subject to the terms and conditions of the respective
178 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
FINANCIAL STATEMENTS
fund’s offering documentation and are susceptible to market
price risk. The investments are included in financial assets at
fair value through profit or loss in the balance sheet. Where
the Group has no equity holding in a fund it manages, the
investment risk is borne by the external investors and therefore
the Group’s maximum exposure to loss relates to future fees
and any uncollected fees at the balance sheet date. Where the
Group does have an equity holding, the maximum exposure
to loss constitutes the future and uncollected management fees
plus the fair value of the Group’s investment in that fund.
Number of funds
Net AuMA of funds
£bn
Financial assets at
FVTPL
£m
as at 31 March 2023
as at 31 March 2022
74
63
25.7
30.4
9.9
4.2
Fees received
in the year
£m
204.0
228.8
Fees receivable
£m
16.1
30.0
25 CONTINGENT ASSETS AND LIABILITIES
The Group can earn performance fees on some of the segregated
and fund accounts that it manages. In some cases a proportion
of the fee earned is deferred until the next performance fee
is payable or offset against future underperformance on that
account. As there is no certainty that such deferred fees will be
collectable in future years, the Group’s accounting policy is to
include performance fees in income only when they become
due and collectable and therefore the element (if any) deferred
beyond 31 March 2023 has not been recognised in the
results for the year.
26 POST BALANCE SHEET EVENT
On 4 May 2023, Liontrust conditionally agreed to acquire
the entire issued share capital of GAM Holding AG (“GAM”),
a global investment management group (the “Proposed
Acquisition”), by way of public exchange offer with ordinary
shares of 1 pence each in the capital of Liontrust (“Liontrust
Shares” , and each individually a “Liontrust Share”) to be issued
to GAM shareholders for a total consideration representing a
valuation of the entire issued share capital of GAM of CHF 107
million (£96 million) (the “Consideration”), equivalent to CHF
0.6723 per publicly held registered shares (Namenaktien) of
GAM with a nominal value of CHF 0.05 each (“GAM Shares”,
and each individually a “GAM Share”), on completion of the
Proposed Acquisition (“Completion”).
As part of the transaction, Liontrust has agreed to provide GAM
with two tranches of short-term secured financial support in an
aggregate amount of up to £17.8 million (“Financial Support”).
The main purpose of this Financial Support is to enable the
acceleration of restructuring activity within GAM and between
GAM group entities. These arrangements will terminate on 31
December 2023 if the Proposed Acquisition has not completed
by that date.
On 13 June 2023 the circular related to the proposed acquisition
of GAM was mailed to shareholders, and on the same day the
Swiss offer prospectus setting out the terms and conditions of the
proposed acquisition to the GAM Holding AG shareholders was
also published. Also, on 13 June 2023 Liontrust announced that
it had mailed a circular to shareholders in connection with the
proposed cancellation of the entire amount currently standing to
the credit of the Company’s share premium account.
179
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023FINANCIAL STATEMENTS COMPANY BALANCE SHEET
as at 31 March 2023
Assets
Non current assets
Property, plant and equipment
Investment in subsidiary undertakings
Loan to Employee Benefit Trust
Total non current assets
Current assets
Trade and other receivables
Financial assets
Deferred tax assets
Cash and cash equivalents
Total current assets
Liabilities
Non current liabilities
Lease liabilities
Total non current liabilities
Current liabilities
Trade and other payables
Corporation tax payable
Total current liabilities
Net current assets
Net assets
Shareholders’ equity
Ordinary shares
Share premium
Capital redemption reserve
Retained earnings
Total equity
Note
31-Mar-23
£’000
31-Mar-22
£’000
30
31
29
32
33
3,328
3,638
177,522
142,902
18,374
199,224
11,172
157,712
12,883
2,687
1,165
60,618
77,353
19,622
670
1,613
21,286
43,191
(2,167)
(2,167)
(2,774)
(2,774)
34
(55,733)
(2,318)
(58,051)
19,302
216,359
648
112,510
19
103,182
216,359
35
(46,877)
(3,479)
(50,356)
(7,165)
147,773
612
64,370
19
82,772
147,773
The profit after taxation for the year ended 31 March 2023 for the Company was £66.8m (year ended 31 March 2022:
£33.3m profit after taxation).
The notes on pages 183 to 187 form an integral part of these Company financial statements.
The financial statements on pages 180 to 187 were approved and authorised for issue by the Board of Directors on 20 June 2023
and signed on its behalf by V.K. Abrol, Chief Operating Officer and Chief Financial Officer.
Company Number 2954692
180 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
FINANCIAL STATEMENTS
COMPANY CASH FLOW STATEMENT
for the year ended 31 March 2023
Cash flows from operating activities
Cash inflow from operations
Cash outflow from operations
Net cash used in operations
Interest received
Tax paid
Net cash (used in)/generated from operating activities
Cash flows from investing activities*
Purchase of property and equipment
Acquisition of Majedie
Gain on liquidation of Architas
Loan to the EBT
Loan repaid by the EBT
Purchase of seeding investments
Sale of seeding investments
Cash received on liquidation of subsidiary
Dividends received from subsidiaries
Issue of shares
Net cash used in investing activities
Cash flows from financing activities
Payment of lease liabilities
Dividends paid
Net cash used in financing activities
Net decrease in cash and cash equivalents
Effect of exchange rate changes
Opening cash and cash equivalents*
Closing cash and cash equivalents
* Cash and cash equivalents consist only of cash balances.
The notes on pages 183 to 187 form an integral part of these Company financial statements.
Year ended
31-Mar-23
£’000
Year ended
31-Mar-22
£’000
19,481
(184)
19,297
204
(17,272)
2,229
(253)
(4,037)
827
(9,801)
–
(2,193)
153
–
496
1,132
1,628
1
(12,500)
(10,871)
(507)
–
–
(8,125)
1,183
(170)
84
17
101,000
70,000
(1,251)
84,445
–
62,482
(1,272)
(46,070)
(47,342)
39,332
–
21,286
60,618
(1,817)
(35,213)
(37,030)
14,581
–
6,705
21,286
181
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023FINANCIAL STATEMENTS
COMPANY STATEMENT OF CHANGES IN EQUITY
for the year ended 31 March 2023
Balance at 1 April 2022 brought forward
Profit for the year
Dividends paid
Shares issued
Sale of own shares
Equity share options issued
Balance at 31 March 2023
Ordinary
shares
£ ‘000
612
–
36
–
–
Share
premium
£ ‘000
64,370
–
48,140
–
–
648
112,510
Capital
redemption
£ ‘000
19
–
–
–
–
19
Retained
earnings
£ ‘000
82,772
66,760
Total
Equity
£ ‘000
147,773
66,760
(46,070)
(46,070)
–
(1,765)
1,485
48,176
(1,765)
1,485
103,182
216,359
COMPANY STATEMENT OF CHANGES IN EQUITY
for the year ended 31 March 2022
Balance at 1 April 2021 brought forward
Profit for the year
Dividends paid
Shares issued
Equity share options issued
Balance at 31 March 2022
Ordinary
shares
£ ‘000
610
–
–
2
–
Share
premium
£ ‘000
64,370
–
–
–
–
612
64,370
Capital
redemption
£ ‘000
19
–
–
–
–
19
Retained
earnings
£ ‘000
83,492
33,342
Total
Equity
£ ‘000
148,491
33,342
(35,947)
(35,947)
(2)
1,887
82,772
–
1,887
147,773
The notes on pages 183 to 187 form an integral part of these Company financial statements..
182 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
FINANCIAL STATEMENTS 27 SIGNIFICANT ACCOUNTING POLICIES
The company financial statements have been prepared in accordance with UK-adopted International Financial Reporting Standards
(IFRS) and those parts of the Companies Act 2006 applicable to companies reporting under IFRS. The financial statements have
been prepared on the going concern basis under the historical cost convention. The principle accounting policies are the same as
those set out in note 1. Under section s408 of the Companies Act 2006 the Company is exempt from the requirement to present
its own statement of comprehensive income.
Investment in subsidiaries are stated at cost less, where appropriate, provisions for impairment.
Notes 28 to 37 reflect the information for the Company.
28 FINANCIAL RISK MANAGEMENT
The Company’s activities expose it to a variety of financial risks: market risk (including price risk, cash flow interest rate risk and
foreign exchange risk), credit risk, capital risk and liquidity risk. The Company is covered by the Group’s overall risk management
programme. The risk management policies are the same as those set out in note 2 and elsewhere in the report and financial statements.
The specific risks affecting the Company are as follows:
Market risk
The investments in the sub-funds of Liontrust Global Funds PLC and Liontrust Global Fundamental PLC are valued on a daily basis at mid
price. The investments are held at fair value and any permanent impairment in the value of the shares held would be taken to revenue.
Management consider, based on historic information, that a sensitivity rate of 10% is appropriate. Based on the holdings in
the Liontrust Global Funds at the balance sheet date a price movement of 10% would result in a movement in the value of the
investment of £280,700 (2022: £67,000).
Cash flow interest rate risk
The Company holds cash on deposit. The interest on these balances is based on floating rates and fixed rates. The Company
monitors its exposure to interest rate movements and may decide to adjust the balance between deposits on fixed or floating
interest rates, or adjust the level of deposits. Following a review of sensitivity based on average cash holdings during the year a
1% increase or decrease in the interest rate will cause a £265,000 increase or decrease in interest receivable (2022 : £86,000).
In addition to the risks covered by the Group risk management polices. The Company is subject to some specific risks relating to its
interaction with other Group companies. The company reviews its balances due to and from other Group companies on a regular basis.
Prudent liquidity risk management required the maintenance of sufficient cash and marketable securities. The Company monitors
rolling forecasts of the it’s liquidity reserves (comprising readily realisable investments and cash and cash equivalents) on the basis
of expected cash flow.
The Company has analysed its financial liabilities into maturity Groupings based on the remaining period at the balance sheet date
to the contractual maturity date. The amounts disclosed in the table below are the contractual undiscounted cash flows.
As at 31 March 2023
Payables
As at 31 March 2022
Payables
Within 3 months
£’000
Between
3 months
£’000
Over one year
£’000
55,733
–
2,167
Within 3 months
£’000
Between
3 months
£’000
Over one year
£’000
45,946
–
2,774
29 LOAN TO THE EMPLOYEE BENEFIT TRUST
The company is the sponsor of Liontrust Asset Management Employee Trust (the ‘Trust’). The value of the loan to the EBT is treated as
a financial instrument held at fair value through profit and loss. An annual review was carried out under the appropriate accounting
standards and the value of the loan to the EBT was calculated at £18,374,000 (2022 : £11,172,000) . The current value of
the shares in the trust are disclosed in Note 22.
183
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023FINANCIAL STATEMENTS 30 PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment is made up of leasehold improvements, office equipment, computer equipment and right-of-use
(ROU) assets.
Property, plant and equipment is stated at cost, less accumulated depreciation and any provision for impairment.Depreciation is
calculated on a straight-line basis to allocate the cost of each asset over its estimated useful life:
Leasehold improvements
Office equipment
Computer equipment
ROU assets
lower of the estimated useful and the remaining lease term on straight-line basis
3-10 years on a straight-line basis
3 years on a straight-line basis
lease term on a straight-line basis
The useful economic lives and residual values are reviewed at each financial period end and adjusted if appropriate. Specific
items are derecognised upon disposal or when no future economic benefits are expected from its use. Any gain or loss arising on
the disposal of an asset, calculated as the difference between the net disposal proceeds and the carrying amount of the item, is
included in the income statement in the year the item is sold or retired.
*On 1 April 2022 the Group acquired the fixed assets of Majedie Asset Management Limited
Year to 31 March 2023
Cost
As at 31 March 2022
Additions*
As at 31 March 2023
Accumulated depreciation
As at 31 March 2022
Charge for the year*
As at 31 March 2023
Net Book Value
As at 31 March 2023
As at 31 March 2022
Year to 31 March 2022
Cost
As at 31 March 2021
Additions
Impairment loss
As at 31 March 2022
Accumulated depreciation
As at 1 April 2021
Charge for the year
As at 31 March 2022
Net Book Value
At 31 March 2022
At 31 March 2021
ROU
Assets
£’000
Leasehold
Improvements
£’000
Office
Equipment
£’000
Computer
Equipment
£’000
7,957
1,281
9,238
4,992
1,496
6,488
1,107
17
1,124
924
94
1,018
542
7
549
447
42
489
2,750
2,965
106
183
60
95
1,120
230
1,350
725
213
938
412
395
ROU
Assets
£’000
Leasehold
Improvements
£’000
Office
Equipment
£’000
Computer
Equipment
£’000
7,597
1,656
(1,296)
7,957
2,880
2,112
4,992
2,965
4,717
1,013
94
–
1,107
752
172
924
183
261
472
70
–
542
413
34
447
95
59
784
336
–
1,120
577
148
725
395
207
Total
£’000
10,726
1,535
12,261
7,088
1,845
8,933
3,328
3,638
Total
£’000
9,866
2,156
(1,296)
10,726
4,622
2,446
7,088
3,638
5,244
Depreciation has been included in the Consolidated Statement of Comprehensive Income within administration expenses.
184 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
FINANCIAL STATEMENTS Lease liability
Opening balance
Additions
Transfer to trade and other payables
Rent & interest charge for the year
Closing balance
As at
31-Mar-23
£’000
As at
31-Mar-22
£’000
3,667
1,306
–
4,948
(1,385)
3,588
5,016
1,506
(1,203)
5,319
(1,652)
3,667
Measurement of lease liability
All existing lease agreements as at 1 April 2016 were re-evaluated for the purposes of IFRS 16. Management considered the break
clauses and expiry dates for all the London office floor leases and as a result there was a significant increase in the lease liability at the
date of initial application.
Lease liability
Current
Non-current
The undiscounted cash payments that will be made until end of the lease term are as follows:
Within 1 year
Between 2 to 5 years
More than 5 years
As at
31-Mar-23
£’000
As at
31-Mar-22
£’000
1,421
2,167
3,588
893
2,774
3,667
£’000
1,435
1,820
333
Measurement of ROU asset
At the initial application date, 1 April 2019, the ROU asset was measured at the amount equal the lease liability with an IFRS 16 reserve
adjustment made to retained earnings for the lease prepayments accounted for in the prior financial year ending 31 March 2019.
ROU asset
Office space
Depreciation on ROU asset
Finance costs
Cash outflow for leases for the year
As at
31-Mar-23
£’000
As at
31-Mar-22
£’000
2,750
2,750
1,496
142
1,272
2,965
2,965
2,112
142
1,817
Additional profit or loss and cash flow information
The Group did not sublease any office premises during the current financial year.
Sale and leaseback transactions
There have been no sale and leaseback transactions in the current financial year.
31 INVESTMENT IN SUBSIDIARY UNDERTAKINGS
The Company’s investment in subsidiary undertakings represents 100% interests (unless otherwise stated) in the ordinary shares,
capital, voting rights (unless stated otherwise) of Liontrust Investment Funds Limited and Liontrust Investment Services Limited,
185
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023FINANCIAL STATEMENTS both registered in England whose principal activity is as operating companies for the Group’s investment management LLP’s;
Liontrust Investment Solutions Limited, whose principal activity is investment management. all subsidiary undertakings have the
same accounting date as the parent company. Full details of the Company’s subsidiary undertakings can be found on page 97.
Balance at 1 April
Additions during the year
Reductions during the year
Balance at 31 March
2023
£’000
2022
£’000
142,902
153,210
55,311
(20,691)
177,522
–
(10,308)
142,902
During the year ended 31 March 2023, the Company acquired the entire share capital of Majedie Asset Management Limited; and
in addition liquidated two wholly-owned subsidiaries and accordingly has fully impaired the carrying value of these subsidiaries.
32 TRADE AND OTHER RECEIVABLES
Receivables due from subsidiary undertakings
Prepayments and accrued income
31-Mar-23
£’000
31-Mar-22
£’000
12,248
635
12,883
18,700
922
19,622
All financial assets listed above are non-interest bearing. The carrying amount of these non-interest bearing trade and other
receivables approximates their fair value.
33 FINANCIAL ASSETS
The Company’s financial assets held as fair value through profit or loss represent shares in the sub funds of the Liontrust Global
Fund PLC and are valued at mid price. The assets are all categorized as Level 1 in line with the categorisation detailed in note 16.
Financial assets
Ireland Open Ended Investment Company
31-Mar-23
31-Mar-22
Assets held at
fair value
through profit
andloss
£’000
2,687
2,687
Assets held at
fair value
through profit
andloss
£’000
670
670
186 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
FINANCIAL STATEMENTS
34 TRADE AND OTHER PAYABLES
Current payables
Other payables including taxation and social security
Payables due to subsidiary undertakings1
Lease liability
Other payables
Non current payables
Lease liability
35 ORDINARY SHARES
Allotted, called up and fully paid shares of 1 pence
As at 1 April
Issued during the year
As at 31 March
2023
£’000
834
45,343
1,421
8,135
55,733
2,167
2,167
2023
Shares
2023
£’000
2022
Shares
61,252,164
3,683,220
64,935,384
612
61,058,960
36
193,204
648
61,252,164
2022
£’000
596
29,908
893
15,480
46,877
2,774
2,774
2022
£’000
610
2
612
36 RELATED PARTY TRANSACTIONS
As at 31 March 2023 the Company owed the following intercompany balances to:
Liontrust Investment Partners LLP – £45,343,000 (2022 : £6,257,000), this amount arose from Group operations.
Liontrust Investment Management Limited – £nil (2022 : £1,759,000) this amount arose from Group operations.
Liontrust Multi Asset Limited – £nil (2022 : £20,609,000) this amount arose from Group operations.
Liontrust Advisory Services Limited – £nil (2022 : £1,282,000) this amount arose from Group operations.
As at 31 March 2023 the Company was owed the following intercompany balances by:
Liontrust Fund Partners LLP – £1,380,000 (2022 : £15,115,471) these amounts arose from Group operations.
Liontrust Investment Services Limited – £8,727,000 (2022 : £nil) these amounts arose from Group operations.
Liontrust Investment Funds Limited – £2,000,000 (2022 : £nil) these amounts arose from Group operations.
Liontrust Portfolio Management Limited – £141,000 (2022 : £nil, this amount arose from Group operations.
37 AUDIT FEES
Amounts receivable by the Company’s auditor and its associates, other than the audit of the Company’s financial statements, have
not been disclosed as the information is required instead to be disclosed on a consolidation basis in the consolidated financial
statements (note 6).
187
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023FINANCIAL STATEMENTS
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF
LIONTRUST ASSET MANAGEMENT PLC
1. OUR OPINION IS UNMODIFIED
We have audited the financial statements of Liontrust Asset Management plc (“the Company”) for the year ended 31 March 2023
which comprise of the Consolidated Statement of Comprehensive Income, Consolidated Balance Sheet, Consolidated Cash Flow
Statement, Consolidated Statement of Changes in Equity, Company Balance Sheet, Company Cash Flow Statement and Company
Statement of Changes in Equity, and the related notes, including the accounting policies in note 1 and 27.
In our opinion:
• the financial statements give a true and fair view of the state of the Group’s and of the parent Company’s affairs as at 31 March
2023 and of the Group’s profit for the year then ended;
• the Group financial statements have been properly prepared in accordance with UK-adopted international accounting standards;
• the parent Company financial statements have been properly prepared in accordance with UK-adopted international accounting
standards and as applied in accordance with the provisions of the Companies Act 2006; and
• the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and applicable law. Our
responsibilities are described below. We believe that the audit evidence we have obtained is a sufficient and appropriate basis
for our opinion. Our audit opinion is consistent with our report to the audit and risk committee.
We were first appointed as auditor by the directors the on 4 November 2020. The period of total uninterrupted engagement is for
the three financial years ended 31 March 2023. We have fulfilled our ethical responsibilities under, and we remain independent
of the Group in accordance with, UK ethical requirements including the FRC Ethical Standard as applied to listed public interest
entities. No non-audit services prohibited by that standard were provided.
Overview
Materiality:
Group financial statements as a whole
Coverage
Key audit matters
New risks (Group)
Recurring risk (Group)
Acquisition of Majedie – Valuation of Intangible
Assets and Goodwill
Recoverability of Architas and Majedie
Goodwill and Intangibles Assets
£3.5m (2022:£4.0m)
5% (2022: 5%) of normalised profit before tax
88% (2022: 100%) of group profit before tax
vs 2022
Recurring risk (Parent Company)
Recoverability of parent Company’s investment in
subsidiary undertakings
2.KEY AUDIT MATTERS: OUR ASSESSMENT OF RISKS OF MATERIAL MISSTATEMENT
Key audit matters are those matters that, in our professional judgement, were of most significance in the audit of the financial
statements and include the most significant assessed risks of material misstatement (whether or not due to fraud) identified by us,
including those which had the greatest effect on: the overall audit strategy; the allocation of resources in the audit; and directing the
efforts of the engagement team. We summarise below the key audit matters, in decreasing order of audit significance, in arriving at
our audit opinion above, together with our key audit procedures to address those matters and our findings from those procedures in
order that the Company’s members, as a body, may better understand the process by which we arrived at our audit opinion. These
matters were addressed, and our findings are based on procedures undertaken, in the context of, and solely for the purpose of, our
audit of the financial statements as a whole, and in forming our opinion thereon, and consequently are incidental to that opinion, and
we do not provide a separate opinion on these matters.
188 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
FINANCIAL STATEMENTS
Acquisition of Majedie –Valuation
Forecast based assessment:
We performed the tests below rather than
The risk
Our response
of Intangible Assets and Goodwill
The fair value of acquired identifiable intangible
(Goodwill £11.0 million;
assets (investment management contracts and
Intangible Asset £43.1 million)
customer relationships for segregated mandates)
arising on acquisition of Majedie Asset
Management Limited (“Majedie”) on 1 April
seeking to rely on any of the Group’s controls
because the nature of the balance is such that
we would expect to obtain audit evidence
primarily through the detailed procedures
described.
Refer to page 110 (Audit and Risk
Committee Report), page 146
(accounting policy) and page 165
(financial disclosures).
2022 must be recognised separately. There
Our procedures included:
is inherent uncertainty involved in forecasting
the cash flows of the acquired business and
discounting them, which determines the fair value
of the intangible assets at the acquisition date.
Our sector experience: We considered the
rationale for the acquisition and we inspected
publicly available documents, the purchase
agreement and board minutes to challenge
The key assumptions affecting the valuation
the Group’s identification of intangible assets.
of intangible assets are the discount rate, the
We assessed whether the acquisition has been
useful economic life of the intangible assets
accounted for in line with IFRS 3 Business
and assets under management and advice
Combinations.
(“AuMA”) growth rates.
There would be a corresponding impact on the
Our valuation expertise: We critically assessed
the Group’s key assumptions of discount rate,
amount of goodwill recognised if alternative
the useful economic life of the intangible asset
assumptions had been adopted; in future
and AuMA growth rates with reference to
periods goodwill will not be amortised but
historical experience and market comparable
intangible assets will be.
data obtained publicly or through internally
The effect of these matters is that, as part
derived data.
of our risk assessment, we determined that
Using our own valuation specialists, we
the fair value of the acquired intangible
compared the Group’s discount rate with our
assets and goodwill has a high degree of
own expected range, based on comparable
estimation uncertainty, with a potential range
company information, and benchmarked the
of reasonable outcomes greater than our
useful economic life against similar intangible
materiality for the financial statements as a
assets.
whole and possibly many times that amount.
Sensitivity analysis: We challenged the Group’s
sensitivity analysis and performed our own
sensitivity analysis, which included assessing
the effect of reasonably possible changes
in discount rate, and AuMA growth on the
valuation of the intangible assets and goodwill.
Assessing transparency: We assessed the
Group’s disclosures regarding the acquisition
including key estimation assumptions.
Our findings
We found the valuation of the intangible assets
and goodwill to be balanced (2022: n/a) with
proportionate disclosures (2022: n/a) to the
related assumptions and sensitivities.
189
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023FINANCIAL STATEMENTS
The risk
Our response
Recoverability of Architas and
Forecast based assessment
We performed the tests below rather than seeking to rely on any of
Majedie Goodwill and Intangible
Assets
The Group’s intangible assets
include investment management
(Architas Goodwill £8.0 million;
contracts and customer
the Group’s controls because the nature of the balance is such that
we would expect to obtain audit evidence primarily through the
detailed procedures described.
2022: £8.0 million; Architas
relationships for segregated
Our procedures included:
Intangible Asset £32.8 million;
mandates recognised as a result
2022: £46.5 million)
of the acquisition of Architas Multi-
(Majedie Goodwill £11.0 million;
2022: £nil; Majedie Intangible
Assets £33.4m 2022: £nil; )
Manager Limited and Architas
Advisory Services Limited (together
“Architas”) in October 2020
and Majedie on 1 April 2022,
Our valuation expertise: We critically assessed the Group’s key
assumptions of discount rate, terminal growth rate and AuMA
growth rates with reference to historical experience and market
comparable data obtained publicly or through internally derived
data.
Refer to page 110 (Audit and Risk
together with goodwill arising on
Using our own valuation specialists, we compared the Group’s
Committee Report), page 146
these acquisitions.
discount rate and terminal growth rate assumptions with our own
(accounting policy) and pages 166
to 168 (financial disclosures).
Reductions in AuMA which
impact revenues has lead to an
increased risk of irrecoverability
of the Architas and Majedie
and intangible assets and was
identified as an impairment trigger
for the intangible assets and
accordingly an impairment review
was undertaken.
The estimated recoverable
amount is subjective due to the
inherent uncertainty involved in
forecasting and discounting future
cash flows. The key assumptions
are the discount rate and AuMA
growth rates for both goodwill and
intangible assets, and the terminal
growth rate for goodwill.
The effect of these matters is that,
as part of our risk assessment,
we determined that the value in
use of these intangible assets
and goodwill has a high degree
of estimation uncertainty; with
a potential range of reasonable
outcomes greater than our
materiality for the financial
statements and possibly many
times that amount.
The financial statements (note 14
and 15) disclose the sensitivities
estimated by the Group.
expected range based on comparable company information
Sensitivity analysis: We challenged the Group’s sensitivity analysis
and performed our own sensitivity analysis, which included
assessing the effect of reasonable possible changes in discount
rate, and AuMA growth rates on the recoverable amount of
intangible assets and goodwill.
We performed an assessment of whether an overstatement of
the carrying value and related understatement of the impairment
charge on Architas intangible assets identified through all these
procedures above was material.
Assessing transparency: We assessed whether the Group’s
disclosures about the sensitivity of the outcome of the impairment
assessment to changes in key assumptions reflected the risks
inherent in the recoverable amount of intangible assets and
goodwill.
Our findings
We found the directors initial estimate of the recoverable amount
of the Architas and Majedie intangible assets and goodwill to
be outside the range we consider to be acceptable. As a result,
the directors’ revised their estimate of recoverable amount and
then used this revised estimate for the purpose of calculating the
impairment charge on the Architas and Majedie intangible assets
and disclosures now made in notes 14 and 15 in relation to
intangible assets and goodwill. (2022: in relation to Architas same
findings).
Following revision, we found the Group’s carrying value of
Majedie and Architas goodwill and Majedie intangible assets
and related impairment charges to Majedie intangible assets to be
balanced with proportionate disclosure of the related assumptions
and sensitivities. (2022: in relation to Architas goodwill and
intangible assets balanced with proportional disclosures).
Following revision, we still found the Group’s carrying value of
the Architas intangible asset and related impairment charges
to Architas intangible assets to be highly optimistic and outside
the range we consider to be acceptable. We performed an
assessment of whether this overstatement of the carrying value
and related understatement of the impairment charge on Architas
intangible assets identified was material and did not consider these
to be material. We found disclosures of the related assumptions
and sensitivities to be proportionate.
190 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
FINANCIAL STATEMENTS The risk
Our response
Recoverability of parent Company’s
Low risk, high value
We performed the tests below rather than seeking to rely
investment in subsidiary
The carrying amount of the
on any of the Company’s controls because the nature of the
undertakings
parent Company’s investment in
balance is such that we would expect to obtain audit evidence
subsidiary undertakings represents
primarily through the detailed procedures described.
(Investment in subsidiary
undertakings £177.5 million;
2022: £142.9 million)
62% (2022:71%) of the parent
Company’s total assets. Their
recoverability is not at a high
Refer to page 185 (accounting
risk of significant misstatement or
Our procedures included:
Tests of detail: We compared the carrying amount of 100% of
investments with the relevant subsidiaries’ draft balance sheet
policy) and page 186 (financial
subject to significant judgement.
and to identify whether their net assets, plus the value in use of
disclosures).
However due to their materiality
intangibles and goodwill recognised on consolidation being an
in the context of the parent
Company financial statements,
this is considered to the area of
most focus in the overall parent
Company audit.
approximation of their minimum recoverable amount.
Our findings
We found the Company’s conclusion that, apart from the
identified impairment recognised as a result of the liquidated
entities in the year, there is no other impairment of its
investments in subsidiaries to be balanced (2022: balanced).
191
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023FINANCIAL STATEMENTS Group profit before tax normalised
£71.4m (2022: £79.4m)
Group materiality
£3.5m (2022: £4.0 m)
£3.5m
Whole financial statements
materiality (2022: £4.0m)
£2.3m
Whole financial statements
performance materiality
(2022: £2.6m)
£3.2m
Range of materiality at 3
components (£1.7m to £3.2m)
(2022: £1.9m to £3.3m)
Normalised PBT
Group materiality
£0.2m
Misstatements reported to the audit
and risk committee (2022: £0.2m)
Group revenue
Group profit before tax
91%
(2022 98%)
98
91
88%
(2022 100%)
100
88
Group total assets
94%
(2022 96%)
96
94
Key:
Full scope for group audit purposes 2023
Full scope for group audit purposes 2022
Residual components
3.OUR APPLICATION OF MATERIALITY AND AN
OVERVIEW OF THE SCOPE OF OUR AUDIT
Materiality for the Group financial statements as a whole was
set at £3.5m (2022: £4.0m), determined with reference
to a benchmark of Group profit before tax, normalised to
exclude costs in relation to severance compensation, staff
reorganisation costs and professional services relating to
acquisitions as disclosed in Note 7 of £12.0m, impairments
as disclosed in note 16 of £12.8m and write back of Majedie
acquisition provision of £1.8m (2022: benchmark of Group
profit before tax), of which it represents 5% (2022: 5%).
Materiality for the parent Company financial statements as a
whole was set at £1.8m (2022: £2.0m), determined with
reference to a benchmark of parent Company total assets, of
which it represents 0.7% (2022: 1%).
In line with our audit methodology, our procedures on
individual account balances and disclosures were performed
to a lower threshold, performance materiality, so as to reduce
to an acceptable level the risk that individually immaterial
misstatements in individual account balances add up to a
material amount across the financial statements as a whole.
Performance materiality was set at 65% (2022: 65%) of
materiality for the financial statements as a whole, which
equates to £2.3m (2022: £2.6m) for the Group and £1.2m
(2022: £1.3m) for the parent Company. We applied this
percentage in our determination of performance materiality
based on identified immaterial unadjusted differences and
control deficiencies noted during the prior period.
We agreed to report to the Audit and Risk Committee any
corrected or uncorrected identified misstatements exceeding
£0.2m (2022: £0.2m), in addition to other identified
misstatements that warranted reporting on qualitative grounds.
Of the Group’s 8 (2022: 9) reporting components, we
subjected 3 (2022: 3) to full scope audits for group purposes.
The range of materiality at 3 components (2022: 3)
components was £1.7m to £3.2m (2022: £1.9m to 3.3m).
The components within the scope of our work accounted for
the percentages illustrated opposite.
The remaining 9% (2022: 2%) of total Group revenue, 12%
(2022: 0%) of Group profit before tax and 6% (2022: 4%) of
total Group assets is represented by 5 (2022: 6) of reporting
components, none of which individually represented more
than 7% (2022: 4%) of any of total Group revenue, Group
profit before tax or total Group assets. For these components,
we performed analysis at an aggregated group level to re-
examine our assessment that there were no significant risks of
material misstatement within these.
The work on all of the components, including the audit of the
parent Company, was performed by the Group team.
The scope of the audit work performed was predominately
substantive as we placed limited reliance upon the Group’s
internal control over financial reporting.
192 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
FINANCIAL STATEMENTS
4.THE IMPACT OF CLIMATE CHANGE ON OUR AUDIT
In planning our audit, we have considered the potential impact
of climate change on the Group’s business and its financial
statements including the impact on the portfolios it manages
on behalf of investors, potential reputational risk associated
with the Group’s delivery of its climate related initiatives, and
greater emphasis on climate related narrative and disclosure
in the annual report.
As a part of our audit, we have made enquiries of management
to understand the extent of the potential impact of climate
change risk on the Group’s financial statements and the
Group’s preparedness for this and we have performed a risk
assessment. We have not assessed climate related risk to be
significant to our audit or key audit matters.
We have also read the disclosure of climate related information
in the front half of the annual report as set out on pages 70 to
74 and considered consistency with the financial statements
and our audit knowledge.
5. GOING CONCERN
The directors have prepared the financial statements on the
going concern basis as they do not intend to liquidate the
Group or the parent Company or to cease their operations,
and as they have concluded that the Group’s and the parent
Company’s financial position means that this is realistic. They
have also concluded that there are no material uncertainties that
could have cast significant doubt over their ability to continue as
a going concern for at least a year from the date of approval of
the financial statements (“the going concern period”).
We used our knowledge of the Group, its industry and
operating model, and the general economic environment to
identify the inherent risks to its business model and analysed
how those risks might affect the Group’s and the parent
Company’s financial resources or ability to continue operations
over the going concern period. The risk that we considered
most likely to adversely affect the Group’s and parent
Company’s available financial resources over this period was
the impact of significant adverse market movements on assets
under management and advice.
We considered whether this risk could plausibly affect the
liquidity in the going concern period by comparing severe,
but plausible downside scenarios that could arise from this
risk individually and collectively against the level of available
financial resources indicated by the Group’s financial forecasts.
Our conclusions based on this work:
• we consider that the directors’ use of the going concern
basis of accounting in the preparation of the financial
statements is appropriate;
• we have not identified, and concur with the directors’
assessment that there is not, a material uncertainty related
to events or conditions that, individually or collectively, may
cast significant doubt on the Group’s or parent Company’s
ability to continue as a going concern for the going concern
period;
• we have nothing material to add or draw attention
to in relation to the directors’ statement in note 1 to the
financial statements on the use of the going concern basis
of accounting with no material uncertainties that may cast
significant doubt over the Group and parent Company’s use
of that basis for the going concern period, and we found the
going concern disclosure in note 1 to be acceptable; and
• the related statement under the Listing Rules set out on page
101 is materially consistent with the financial statements and
our audit knowledge.
• However, as we cannot predict all future events or
conditions and as subsequent events may result in outcomes
that are inconsistent with judgements that were reasonable
at the time they were made, the above conclusions are not
a guarantee that the Group or the parent Company will
continue in operation.
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LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023FINANCIAL STATEMENTS 6.FRAUD AND BREACHES OF LAWS AND REGULATIONS
– ABILITY TO DETECT
Identifying and responding to risks of material misstatement
due to fraud
To identify risks of material misstatement due to fraud (“fraud
risks”) we assessed events or conditions that could indicate an
incentive or pressure to commit fraud or provide an opportunity
to commit fraud. Our risk assessment procedures included:
• Enquiring of directors, the Group Audit & Risk Committee,
Group Internal Audit, Group Compliance, Group Risk,
inspection of policy documentation as to the Group’s high-
level policies and procedures to prevent and detect fraud,
including internal audit reports, and the Group’s channel for
‘whistleblowing’, as well as whether they have knowledge
of any actual, suspected or alleged fraud identifying and
responding to risks of material misstatement due to fraud;
• Reading Board minutes and reading and attending Group
Audit & Risk Committee meetings;
• Considering
remuneration
incentive
schemes
and
performance targets for management and directors; and
• Reading broker reports
We communicated identified fraud risks throughout the audit
team and remained alert to any indications of fraud throughout
the audit.
As required by auditing standards, and taking into account
possible pressures to meet profit targets, we perform
procedures to address the risk of management override of
controls, in particular the risk that Group management may be
in a position to make inappropriate accounting entries and the
risk of bias in accounting estimates and judgements such as the
valuation of the Majedie intangible assets and corresponding
impact on goodwill and the recoverability of Majedie and
Architas intangible assets and goodwill.
On this audit we do not believe there is a fraud risk related
to revenue recognition because there is limited management
judgement involved in the valuation of AuMA and recognition
of all material revenue streams.
We did not identify any additional fraud risks. We performed
procedures including:
• Identifying journal entries and other adjustments to test for all
full scope components based on risk criteria and comparing
the identified entries to supporting documentation. These
included, but were not limited to, journals impacting cash
and revenue balances that were identified as unusual or
unexpected in our risk assessment procedures.
• Assessing whether the judgements made in making significant
accounting estimates are indicative of potential bias.
Identifying and responding to risks of material misstatement
due to non-compliance with laws and regulations
As the Group is regulated, our assessment of risks involved
gaining an understanding of
the control environment
including the entity’s procedures for complying with regulatory
requirements.
We communicated identified laws and regulations throughout
our team and remained alert to any indications of non-
compliance throughout the audit.
The potential effect of these laws and regulations on the
financial statements varies considerably. Firstly, the Group is
subject to laws and regulations that directly affect the financial
statements including financial reporting legislation (including
related companies legislation), distributable profits legislation,
taxation legislation and we assessed the extent of compliance
with these laws and regulations as part of our procedures on
the related financial statement items.
Secondly, the Group is subject to many other laws and
regulations where the consequences of non-compliance
could have a material effect on amounts or disclosures in
the financial statements, for instance through the imposition
of fines or litigation. We identified the following areas as
those most likely to have such an effect: the Listing Rules and
Disclosure Guidance and Transparency Rules, specific areas
of regulatory capital and liquidity, conduct including Client
Assets, TCFD, money laundering, market abuse regulations
and certain aspects of company legislation recognising the
financial and regulated nature of the Group’s activities and its
legal form.
Auditing standards limit the required audit procedures to
identify non- compliance with these laws and regulations to
enquiry of the directors and other management and inspection
of regulatory and legal correspondence, if any. Therefore if
a breach of operational regulations is not disclosed to us or
evident from relevant correspondence, an audit will not detect
that breach.
We assessed the legality of the distributions in the period
based on the level of distributable profits.
Context of the ability of the audit to detect fraud or breaches
of law or regulation
Owing to the inherent limitations of an audit, there is an
unavoidable risk that we may not have detected some material
misstatements in the financial statements, even though we have
properly planned and performed our audit in accordance
with auditing standards. For example, the further removed
non-compliance with laws and regulations is from the events
and transactions reflected in the financial statements, the less
likely the inherently limited procedures required by auditing
standards would identify it.
194 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
FINANCIAL STATEMENTS
In addition, as with any audit, there remained a higher risk of
non- detection of fraud, as fraud may involve collusion, forgery,
intentional omissions, misrepresentations, or the override of
internal controls.
• the Principal Risks and Mitigation disclosures describing
these risks and how emerging risks are identified, and
explaining how they are being managed and mitigated;
and
Our audit procedures are designed to detect material
misstatement. We are not responsible for preventing non-
compliance or fraud and cannot be expected to detect non-
compliance with all laws and regulations.
7. WE HAVE NOTHING TO REPORT ON THE OTHER
INFORMATION IN THE ANNUAL REPORT
The directors are responsible for the other information presented
in the Annual Report together with the financial statements.
Our opinion on the financial statements does not cover the
other information and, accordingly, we do not express an
audit opinion or, except as explicitly stated below, any form of
assurance conclusion thereon.
Our responsibility is to read the other information and, in
doing so, consider whether, based on our financial statements
audit work, the information therein is materially misstated
or inconsistent with the financial statements or our audit
knowledge. Based solely on that work we have not identified
material misstatements in the other information.
Strategic report and directors’ report
Based solely on our work on the other information:
• we have not identified material misstatements in the strategic
report and the directors’ report;
• in our opinion the information gose ts for the financial year
is consistent with the financial statements; and
• in our opinion those reports have been prepared in
accordance with the Companies Act 2006.
Directors’ remuneration report
In our opinion the part of the Directors’ Remuneration Report
to be audited has been properly prepared in accordance with
the Companies Act 2006.
Disclosures of emerging and principal risks and longer-term
viability
We are required to perform procedures to identify whether
there is a material inconsistency between the directors’
disclosures in respect of emerging and principal risks and the
viability statement, and the financial statements and our audit
knowledge.
Based on those procedures, we have nothing material to add
or draw attention to in relation to:
• the directors’ confirmation within the Statement of viability
page 33 that they have carried out a robust assessment
of the emerging and principal risks facing the Group,
including those that would threaten its business model, future
performance, solvency and liquidity;
• the directors’ explanation in the Statement of viability of how
they have assessed the prospects of the Group, over what
period they have done so and why they considered that
period to be appropriate, and their statement as to whether
they have a reasonable expectation that the Group will
be able to continue in operation and meet its liabilities as
they fall due over the period of their assessment, including
any related disclosures drawing attention to any necessary
qualifications or assumptions.
We are also required to review the Statement of viability, set
out on page 33 under the Listing Rules. Based on the above
procedures, we have concluded that the above disclosures
are materially consistent with the financial statements and our
audit knowledge.
Our work is limited to assessing these matters in the context of
only the knowledge acquired during our financial statements
audit. As we cannot predict all future events or conditions
and as subsequent events may result in outcomes that are
inconsistent with judgements that were reasonable at the time
they were made, the absence of anything to report on these
statements is not a guarantee as to the Group’s and parent
Company’s longer-term viability.
Corporate governance disclosures
We are required to perform procedures to identify whether
there is a material inconsistency between the directors’
corporate governance disclosures and the financial statements
and our audit knowledge.
Based on those procedures, we have concluded that each
of the following is materially consistent with the financial
statements and our audit knowledge:
• the directors’ statement that they consider that the annual
report and financial statements taken as a whole is fair,
balanced and understandable, and provides the information
necessary for shareholders to assess the Group’s position
and performance, business model and strategy;
• the section of the annual report describing the work of the
Audit and Risk Committee, including the significant issues
that the audit and risk committee considered in relation to the
financial statements, and how these issues were addressed;
and
• the section of the annual report that describes the review
of the effectiveness of the Group’s risk management and
internal control systems.
We are required to review the part of the Corporate
Governance Statement relating to the Group’s compliance
with the provisions of the UK Corporate Governance Code
specified by the Listing Rules for our review. We have nothing
to report in this respect.
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8.WE HAVE NOTHING TO REPORT ON THE OTHER
MATTERS ON WHICH WE ARE REQUIRED TO REPORT
BY EXCEPTION
Under the Companies Act 2006, we are required to report to
you if, in our opinion:
• adequate accounting records have not been kept by the
parent Company, or returns adequate for our audit have not
been received from branches not visited by us; or
• the parent Company financial statements and the part of
the Directors’ Remuneration Report to be audited are not in
agreement with the accounting records and returns; or
• certain disclosures of directors’ remuneration specified by
law are not made; or
• we have not received all the information and explanations
we require for our audit.
We have nothing to report in these respects.
9.RESPECTIVE RESPONSIBILITIES
Directors’ responsibilities
As explained more fully in their statement set out on page
102, the directors are responsible for: the preparation of the
financial statements including being satisfied that they give a
true and fair view; such internal control as they determine is
necessary to enable the preparation of financial statements
that are free from material misstatement, whether due to fraud
or error; assessing the Group and parent Company’s ability
to continue as a going concern, disclosing, as applicable,
matters related to going concern; and using the going concern
basis of accounting unless they either intend to liquidate the
Group or the parent Company or to cease operations, or have
no realistic alternative but to do so.
Auditor’s responsibilities
Our objectives are to obtain reasonable assurance about
whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to
issue our opinion in an auditor’s report. Reasonable assurance
is a high level of assurance, but does not guarantee that an
audit conducted in accordance with ISAs (UK) will always
detect a material misstatement when it exists. Misstatements
can arise from fraud or error and are considered material
if, individually or in aggregate, they could reasonably be
expected to influence the economic decisions of users taken
on the basis of the financial statements.
A fuller description of our responsibilities is provided on the
FRC’s website at www.frc.org.uk/auditorsresponsibilities.
The Company is required to include these financial statements
in an annual financial report prepared using the single
electronic reporting format specified in the TD ESEF Regulation.
This auditor’s report provides no assurance over whether the
annual financial report has been prepared in accordance with
that format.
10. THE PURPOSE OF OUR AUDIT WORK AND TO
WHOM WE OWE OUR RESPONSIBILITIES
This report is made solely to the Company’s members, as
a body, in accordance with Chapter 3 of Part 16 of the
Companies Act 2006 and the terms of our engagement by
the Company. Our audit work has been undertaken so that we
might state to the Company’s members those matters we are
required to state to them in an auditor’s report, and the further
matters we are required to state to them in accordance with
the terms agreed with the Company, and for no other purpose.
To the fullest extent permitted by law, we do not accept or
assume responsibility to anyone other than the Company and
the Company’s members, as a body, for our audit work, for
this report, or for the opinions we have formed.
Jatin Patel (Senior Statutory Auditor)
for and on behalf of KPMG LLP, Statutory Auditor
Chartered Accountants
15 Canada Square
E14 5GL
20 June 2023
196 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
FINANCIAL STATEMENTS SHAREHOLDER INFORMATION
DIRECTORS AND ADVISERS
Registered Office and Company number
2 Savoy Court, London WC2R 0EZ
Registered in England with Company Number 02954692
Share price information:
The Company’s shares are quoted on the London Stock
Exchange and the price appears daily in The Financial
Times, (listed under ‘General Financial’).
Company Secretary
Sally Buckmaster
2 Savoy Court
London
WC2R 0EZ
Independent Auditor
KPMG LLP
15 Canada Square,
London,
E14 5GL
Banker
Royal Bank of Scotland Plc
280 Bishopsgate
London EC2M 4RB
Financial Adviser and Corporate Broker
Panmure Gordon & Co
40 Gracechurch St
London EC3V 0BT
Singer Capital Markets
1 Bartholomew Lane
London EC2N 2AX
Legal Advisers
Macfarlanes LLP
20 Cursitor Street
London EC4A ILT
Simmons & Simmons LLP
City Point, 1 Ropemaker Street
London EC2Y 9SS
Financial Calendar
Year End
Half Year End
Results announced:
31 March
30 September
Full year: June,
half year: November
Interim report available: December
Annual Report available:
Annual General Meeting: September
July
UK authorised unit trusts:
Liontrust UK Growth Fund
Liontrust UK Smaller Companies Fund
Liontrust UK Micro Cap Fund
Liontrust Special Situations Fund
Liontrust European Dynamic Fund
Liontrust Balanced Fund
Liontrust Institutional Fund (closed to investment 4/10/2022)
Liontrust Sustainable Future ICVC
Liontrust Sustainable Future Managed Growth Fund
Liontrust Sustainable Future Cautious Managed Fund
Liontrust Sustainable Future Corporate Bond Fund
Liontrust Sustainable Future Defensive Managed Fund
Liontrust Sustainable Future European Growth Fund
Liontrust Sustainable Future Global Growth Fund
Liontrust Sustainable Future Managed Fund
Liontrust Sustainable Future UK Growth Fund
Liontrust UK Ethical Fund
Liontrust Investment Funds IV OEIC
Liontrust Global Technology Fund
Liontrust Japan Equity Fund
Ireland domiciled open-ended investment company
Liontrust Global Funds PLC
Liontrust GF European Strategic Equity Fund
Liontrust GF Special Situations Fund
Liontrust GF UK Growth Fund
Liontrust GF European Smaller Companies Fund
Liontrust GF Strategic Bond Fund
Liontrust GF Sustainable Future European Corporate Bond Fund
Liontrust GF High Yield Bond Fund
Liontrust GF Absolute Return Bond Fund
Liontrust GF Sustainable Future Pan-European Growth Fund
Liontrust GF Sustainable Future Global Growth Fund
Liontrust GF Sustainable Future Multi-Asset Global Fund
197
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023FINANCIAL STATEMENTS
Multi-Manager Global Solutions ICVC, comprising
10 sub funds
Liontrust MA Dynamic Passive Prudent Fund
Liontrust MA Dynamic Passive Reserve Fund
Liontrust MA Dynamic Passive Moderate Fund
Liontrust MA Dynamic Passive Intermediate Fund
Liontrust MA Dynamic Passive Progressive Fund
Liontrust MA Dynamic Passive Growth Fund
Liontrust MA Dynamic Passive Adventurous Fund
Liontrust MA Explorer 35 Fund
Liontrust MA Diversified Real Assets Fund
Liontrust MA Diversified Global Income Fund (closed to
investment 18/10/2021)
Ireland domiciled open-ended investment companies
Liontrust Global Funds PLC
Liontrust GF European Strategic Equity Fund
Liontrust GF Special Situations Fund
Liontrust GF UK Growth Fund
Liontrust GF European Smaller Companies Fund
Liontrust GF Strategic Bond Fund
Liontrust GF Sustainable Future European Corporate Bond Fund
Liontrust GF High Yield Bond Fund
Liontrust GF Absolute Return Bond Fund
Liontrust GF Sustainable Future Pan-European Growth Fund
Liontrust GF Sustainable Future Global Growth Fund
Liontrust GF Sustainable Future Multi-Asset Global Fund
Liontrust Global Fundamental PLC
Liontrust GF International Equity Fund
Liontrust GF UK Equity Fund
Liontrust GF Tortoise Fund
Liontrust GF US Equity Fund
Liontrust Investment Funds I OEIC
Liontrust China Fund
Liontrust Global Alpha Fund
Liontrust Global Innovation Fund
Liontrust Global Dividend Fund
Liontrust Income Fund
Liontrust India Fund
Liontrust Latin America Fund
Liontrust Russia Fund
Liontrust US Opportunities Fund
Liontrust Investment Funds III OEIC
Liontrust UK Equity Fund
Liontrust UK Focus Fund
Liontrust Institutional UK Small Cap Fund
Liontrust Tortoise Fund
Liontrust UK Equity Income Fund
Liontrust Global Equity Income Fund
Liontrust Global Focus Fund
Liontrust Investment Funds ICVC
Liontrust Sustainable Future Monthly Income Bond Fund
Liontrust Strategic Bond Fund
Liontrust Investment Funds II OEIC
Liontrust Emerging Markets Fund
Liontrust Global Smaller Companies Fund
Multi-Manager Investments ICVC
Liontrust MA Explorer 100 Fund
Liontrust MA Explorer 85 Fund
Liontrust MA Explorer Income 60 Fund
Liontrust MA Explorer Income 45 Fund
Liontrust MA Explorer 70 Fund
Multi-Manager Investments ICVC II
Liontrust MA Blended Intermediate Fund
Liontrust MA Blended Reserve Fund
Liontrust MA Monthly High Income Fund
Liontrust MA UK Equity Fund
Liontrust MA Blended Moderate Fund
Liontrust MA Strategic Bond Fund (closed to investment
14/10/2022)
Liontrust MA Blended Growth Fund
Liontrust MA Blended Progressive Fund
198 LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023
FINANCIAL STATEMENTS
GROUP SUBSIDIARY ENTITIES – BOARD MEMBERS
Liontrust Investment Funds Limited
V.K. Abrol
J.S. Ions
Liontrust Fund Partners LLP
A list of members is open for inspection at 2 Savoy Court,
London WC2R 0EZ
Liontrust Investment Services Limited
V.K. Abrol
J.S. Ions
Liontrust Investment Partners LLP
A list of members is open for inspection at 2 Savoy Court,
London WC2R 0EZ
Liontrust Portfolio Management Limited
E.J.F Catton
M.F. Kearney
Liontrust International (Luxembourg) SA
E.J.F Catton
M.F. Kearney
J. Beddall
INVESTMENT COMPANIES – BOARD MEMBERS
Liontrust Global Funds Plc
E.J.F. Catton
D.J. Hammond
M.F. Kearney
S. O’Sullivan
D. Reidy
Liontrust Global Fundamental PLC
E.J.F. Catton
C. Simmons
S. O’Sullivan
D. Reidy
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LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2023FINANCIAL STATEMENTS