COURAGE · POWER · PRIDE
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 TAT E M E N T S 2 0 2 4
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
To help clients enjoy a better financial future through
the power of active management and distinct
investment processes.
INSIDE THIS REPORT
Financial highlights
Highlights and Key performance measures
4
Strategic Report
Chair’s Statement
12
Chief Executive Officer’s report
14
Our Strategy
16
Our Business Model
23
Financial review
28
Principal Risks and Mitigations
38
Our People
54
Responsible Capitalism
62
Governance
Board of Directors
70
Risk management and internal controls report
75
Corporate Governance report
78
Directors’ report
89
Directors’ responsibility statement
94
Nomination Committee report
96
Audit & Risk Committee report
102
Remuneration report
106
Financial Statements – Group and Company
Consolidated Statement of Comprehensive Income
148
Consolidated Balance Sheet
149
Consolidated Cash Flow Statement
150
Consolidated Statement of Changes in Equity
151
Notes to the Financial Statements
152
Company Financial Statements
186
Company Notes to the Financial Statements
189
Independent auditor’s report to the members of Liontrust
Asset Management PLC
194
Shareholder Information
201
Glossary
202
2
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
3
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
HIGHLIGHTS
ASSETS UNDER MANAGEMENT AND ADVICE*
NET FLOWS*
12%
PROFIT/ (LOSS) BEFORE TAX
101%
2024
£(0.6)m
2023
£49.3m
ADJUSTED PROFIT
BEFORE TAX*
23%
2024
£67.4m
2023
£87.1m
TOTAL DIVIDEND
PER SHARE
0%
2024
72 pence
2023
72 pence
GROSS PROFIT
19%
2024
£186.1m
2023
£229.8m
ADJUSTED DILUTED
EARNINGS PER
SHARE*
28%
2024
79.16 pence
2023
109.78 pence
DILUTED EARNINGS
PER SHARE
109%
2024
(5.46) pence
2023
61.21 pence
*These are Alternative Performance Measures. The disclosure, definition and nature of adjustments to GAAP measures to the
disclosed APMs is a judgement made by management and is a matter referred to the Audit & Risk Committee for approval prior
to issuing the financial statements. See Page 32 for further details.
4
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
FINANCIAL HIGHLIGHTS
£27,822 million
£(6,083) million
£31,430 million
£(4,841) million
2023
2023
2024
2024
31 March
31 March
31 March
31 March
ASSETS UNDER MANAGEMENT AND ADVICE
On 31 March 2024, our AuMA stood at £27,822 million and were broken down by type and investment process as follows:
Process
Total
(£m)
Institutional
Accounts &
Funds
(£m)
Investment
Trusts
(£m)
UK Retail
Funds & MPS
(£m)
Alternative
Funds
(£m)
International
Funds &
Accounts
(£m)
Sustainable Investment
10,433
323
–
9,624
–
486
Economic Advantage
6,571
450
–
5,998
–
123
Multi–Asset
4,344
–
–
4,220
124
–
Global Innovation
827
–
–
827
–
–
Cashflow Solution
2,184
556
–
1,404
112
112
Global Fundamental*1
3,267
412
1,135
1,706
–
14
Global Fixed Income
196
–
–
36
–
160
Total
27,822
1,741
1,135
23,815
236
895
1The Global Fundamental Global Equity Funds moved to Mark Hawtin’s new Global Equity Team in May 2024.
NET FLOWS
The net outflows over the Financial Year were £6,083 million (2023: £4,841 million). A reconciliation of fund flows and AuMA
over the Financial Year is as follows:
Total
Institutional
Accounts &
Funds
Investment
Trusts
UK Retail
Funds & MPS
Alternative
Funds
International
Funds &
Accounts
£m
£m
£m
£m
£m
£m
Opening AuMA – 1 April 2023
31,430
2,394
1,139
25,721
1,084
1,092
Net flows
(6,083)
(925)
(92)
(3,999)
(821)
(246)
Market and Investment performance
2,475
272
88
2,093
(27)
49
Closing AuMA – 31 Mar 2024
27,822
1,741
1,135
23,815
236
895
5
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
FINANCIAL 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 last three financial
years, on an AuMA weighted basis, we have had over 60% or
more of our actively managed UK retail AuMA in first quartile
funds (see Figure 1).
Figure 1 – AuMA weighted quartile ranking since launch or
manager inception (covers 75% of AuMA).
1net of fees and income reinvested.
Net flows*
Net flows in the year falling to £(6,083) million from +£2,488
million two years ago and from £(4,841) million last year.
Figure 2 – Net flows £’million
AuMA*
Our AuMA has decreased by 12% from 31 March 2023 to 31
March 2024 and decreased by 17% from 31 March 2022 to
31 March 2024, reflecting market performance and net flows
(see figure 3).
Figure 3 – AuMA by investor type £’million
Adjusted profit before tax*
Our adjusted profit before tax has decreased by 23% from 31
March 2023 to 31 March 2024 and by 30% from 31 March
2022 to 31 March 2024.
Figure 4 – Adjusted profit before tax £’million
40,000
35,000
30,000
25,000
20,000
15,000
10,000
5,000
0
£4,000
£3,000
£2,000
£1,000
£0
(£1,000)
(£2,000)
(£3,000)
(£4,000)
(£5,000)
(£6,000)
(£7,000)
FY22
FY23
FY24
100
80
60
40
20
0
FY22
FY23
FY24
FY22
FY23
FY24
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
FY22
FY23
FY24
First Quartile
Second Quartile
Third Quartile
Fourth Quartile
UK Retail Funds & MPS (£’m)
Institutional Accounts & Funds (£’m)
Investment trusts (£’m)
Alternative Funds (£’m)
International Funds & Accounts (£’m)
*These are Alternative Performance Measures. The disclosure, definition and nature of adjustments to GAAP measures to the
disclosed APMs is a judgement made by management and is a matter referred to the Audit & Risk Committee for approval prior
to issuing the financial statements. See Page 32 for further details.
6
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
FINANCIAL HIGHLIGHTS
Financial Adviser 37%
UK Retail Funds & MPS 86%
Instl. Accounts & Funds 6%
Investment Trusts 4%
Int. Funds & Accounts 3%
Alternative Funds 1%
Wealth Manager 17%
Life & Pensions 15%
Institutional 10%
D2C/Execution only 8%
Platform 8%
Fund Manager 4%
Other 2%
BY CLIENT TYPE
BY PRODUCT TYPE
£27.8bn
AuMA
FUND PERFORMANCE
SPLIT OF AUMA
Source: Liontrust, FE Analytics,31.03.24. Share classes are total return, net of fees, income reinvested. Quartiles as at 31.03.24,
generated on 17.04.24. Details of the benchmarks can be found on the fund pages of the Liontrust website. Single strategy
Liontrust funds both UK and offshore funds versus benchmark and those given an FE Analytics benchmark.
2024
2023
2022
2021
2020
2024
2023
2022
2021
2020
2024
2023
2022
2021
2020
2024
2023
2022
2021
2020
1 year
3 years
5 years
Since inception /
manager inception
44.2%
(19)
63.2%
(24)
50.0%
(17)
52.3%
(23)
28.9%
(13)
52.6%
(20)
73.0%
(27)
54.5%
(24)
24.5%
(13)
48.8%
(21)
57.9%
(22)
55.6%
(25)
13.0%
(6)
17.8%
(8)
44.7%
(17)
42.2%
(19)
54.3%
(25)
24.4%
(11)
37.2%
(11)
44.7%
(21)
23.9%
(11)
13.3%
(6)
13.2%
(5)
17.8%
(8)
15.2%
(7)
42.2%
(19)
26.3%
(10)
28.9%
(13)
47.8%
(7)
26.7%
(12)
15.8%
(6)
11.1%
(5)
19.6%
(9)
24.4%
(11)
23.3%
(10)
29.8%
(14)
17.4%
(8)
26.7%
(12)
23.3%
(10)
14.9%
(7)
8.7%
(8)
24.4%
(11)
16.3%
(11)
10.6%
(5)
13.3%
(6)
27.9%
(12)
23.7%
(9)
22.2%
(10)
26.7%
(6)
14.0%
(6)
5.3% (2)
13.3%
(6)
35.6%
(6)
9.3%
(4)
13.2%
(5)
8.9%
(4)
44.4%
(20)
26.3%
(10)
8.1%
(3)
22.7%
(10)
17.8%
(20)
13.2%
(5)
10.8%
(4)
15.9%
(4)
8.9%
(4)
7.9%
(3)
8.1%
(3)
6.8% (3)
14.0%
(6)
20.9%
(9)
15.8%
(6)
17.6%
(6)
15.9%
(7)
20.9%
(9)
21.1%
(8)
11.8%
(4)
13.6%
(6)
20.6%
(4)
18.2%
(8)
1st quartile
2nd quartile
3rd quartile
4th quartile
7
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
FINANCIAL HIGHLIGHTS
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
1
1
1
3
25/03/2009
Liontrust Special Situations Fund
1
2
3
4
10/11/2005
Liontrust UK Smaller Companies Fund
1
1
2
3
08/01/1998
Liontrust UK Micro Cap Fund
1
1
1
2
09/03/2016
SUSTAINABLE FUTURE FUNDS
Liontrust SF Monthly Income Bond Fund
1
1
2
1
12/07/2010
Liontrust SF Managed Growth Fund
2
1
2
1
19/02/2001
Liontrust SF Corporate Bond Fund
1
2
2
1
20/08/2012
Liontrust SF Cautious Managed Fund
2
3
4
3
23/07/2014
Liontrust SF Defensive Managed Fund
1
3
4
2
23/07/2014
Liontrust SF European Growth Fund
3
4
4
4
19/02/2001
Liontrust SF Global Growth Fund
3
2
3
2
19/02/2001
Liontrust SF Managed Fund
1
1
3
1
19/02/2001
Liontrust UK Ethical Fund
3
4
4
3
01/12/2000
Liontrust SF UK Growth Fund
3
4
4
2
19/02/2001
Liontrust GF SF US Growth Fund
2
–
–
–
–
–
–
07/07/2023
GLOBAL INNOVATION FUNDS
Liontrust Global Dividend Fund
2
1
2
1
20/12/2012
Liontrust Global Innovation Fund
1
2
4
1
31/12/2001
Liontrust Global Technology Fund
2
2
1
1
15/12/2015
GLOBAL FUNDAMENTAL GLOBAL EQUITY FUNDS1
Liontrust Balanced Fund
1
1
1
1
31/12/1998
Liontrust China Fund
4
3
4
3
31/12/2004
Liontrust Emerging Market Fund
3
4
3
1
30/09/2008
Liontrust Global Smaller Companies Fund
1
3
3
1
01/07/2016
Liontrust Global Alpha Fund
1
3
4
2
31/12/2001
Liontrust India Fund
4
2
1
1
29/12/2006
Liontrust Japan Equity Fund
2
1
2
1
22/06/2015
Liontrust Latin America Fund
3
4
4
3
03/12/2007
Liontrust US Opportunities Fund
1
3
3
1
31/12/2002
Liontrust GF US Equity Fund
2
1
3
1
26/06/2014
Liontrust GF International Equity Fund
4
–
–
4
4
17/12/2019
8
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
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 Fund
1
1
1
1
15/11/2006
GLOBAL FIXED INCOME FUNDS
Liontrust Strategic Bond Fund
3
3
3
3
08/05/2018
GLOBAL FUNDAMENTAL TEAM FUNDS
Liontrust UK Equity Fund
1
3
2
1
27/03/2003
Liontrust UK Focus Fund
1
4
3
1
29/09/2003
Liontrust Income Fund
1
1
1
1
31/12/2002
Liontrust GF UK Equity Fund
4
3
2
1
03/03/2014
Edinburgh Investment Trust Plc
1
–
–
1
1
27/03/2020
1The Global Fundamental Global Equity Funds moved to Mark Hawtin’s new Global Equity Team in May 2024.
Source: Financial Express to 31 March 2024 as at 4 April 2024, 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, OEICs, Irish authorised OEICs (primary share class) or UK listed investment trusts. Liontrust Russia
Fund is not included as it is currently suspended and in an IA sector that is not rankable (e.g. Specialist) so it would not be a fair
comparison to make. Liontrust GF Tortoise Fund is not included as it is not in an IA sector. Edinburgh Investment Trust Plc uses the
IT UK Equity Income sector.
9
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
FINANCIAL HIGHLIGHTS
STRATEGIC
REPORT
Chair’s Statement
12
Chief Executive Officer’s report
14
Our Strategy
16
Our Business Model
23
Financial review
28
Principal Risks and Mitigations
38
Our People
54
Responsible Capitalism
62
CHAIR’S STATEMENT
The Board of Directors are committed to Liontrust’s vision and the
strategy of the Group. The underlying business is in better health
than it has ever been with regards to investment proposition,
quality of our people, reach of sales and marketing, and
strengthening business infrastructure. We will not be diverted
from our long-term plan by short-term challenges.
ACTIVE MANAGEMENT
There is no doubt we have been confronted by one of the
toughest periods for active asset managers. This is especially
the case for those which offer investment styles that have been
largely out of favour during this environment of interest rates
remaining higher for longer than many expected. For Liontrust,
this has impacted our quality growth, small and mid-caps,
sustainable investing, as well as UK equity, strategies; this is
reflected in the net outflows of £6 billion over the financial year.
Liontrust has always believed the best way of allocating capital
to companies and managing investments on behalf of clients is
through active management with robust investment processes
and high-conviction portfolios. Each team at Liontrust has the
freedom to use their own distinct investment processes and we
continue to believe these are key to long-term performance and
effective risk control.
The need for individuals to take responsibility for their own
savings and ensure their future financial security will only
grow in importance and this can act as a tailwind for active
managers. We believe those active managers who deliver
value will continue to have a key role for investors in achieving
their financial objectives. We recognise active managers and
investment processes do not always deliver alpha in a consistent
and predictable manner; in some years, as we have seen
recently, processes will underperform, but we are confident they
will deliver for clients over the long term.
John Ions, Vinay Abrol, and the rest of Liontrust are working
hard to enable the Group to return to net inflows and are not
simply waiting for market sentiment to change. In his statement
below, John explains the strategy for delivering growth and the
many actions that have already been taken to ensure Liontrust
is well positioned for the future and can take advantage of
opportunities.
ROBUST BUSINESS
I am pleased to report that the Liontrust operating model is
robust with the Group capital position remaining strong. Over
the financial year, Liontrust delivered adjusted profit before
tax of £67.4 million, gross profit of £186 million and the full
year dividend is maintained at 72p per share. Our financial
strength has been aided by our flexible remuneration model
for investment managers through their revenue share model.
This ensures the investment managers are fully aligned with the
business and investors as AuMA rises and falls.
Liontrust remains in robust financial health with £104 million of
cash and cash equivalents on the balance sheet and surplus
capital of nearly £80 million as at 31 March 2024.
STRATEGY
A strategic objective that John talks about in detail in his statement
is the further diversification of our fund range and investment
teams. We have seen clearly why this is important given the
market environment of the last few years. Diversification can be
achieved through launching funds for existing investment teams
and recruiting new teams as we have done with the Global
Equities team. The Board also believes in selective acquisitions
that accelerate the development of Liontrust and its ability to
grow, typically through bringing in investment teams that
complement our existing capability or expand distribution.
It is in this context that our endeavour to acquire GAM Holding
AG in the first half of the financial year should be viewed. It
presented the opportunity to expand rapidly our investment
management and distribution capability, as well as enhance
the operations and administration of the Group. Alongside
acquisitions, Liontrust continues to pursue these objectives
through recruitment and internal developments.
12
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
PEOPLE AND SUSTAINABILITY
There are many ways in which Liontrust has responsibilities
to investors, employees, stakeholders, the planet and society.
These responsibilities range from engagement with the
companies we invest in, through commitments to net zero, DE&I
(Diversity, Equity, Inclusion) and the well-being of employees, to
contributing to the financial services industry and our community.
Liontrust has been investing in and developing our people,
including through a leadership programme, coaching, training
and a mentoring scheme.
In May 2022, Liontrust signed up to the Net Zero Asset
Managers’ initiative (NZAM). This commitment covers the
Group’s net zero targets for the investments it makes on behalf
of clients. At the time it joined, Liontrust committed approximately
42% of its AuMA to NZAM. As at the end of December 2023,
the percentage of the Group’s AuMA committed had risen to
45%. In 2023, Liontrust set near-term science based emissions
reduction targets (which were approved by the Science Based
Targets initiative, or SBTi) to show the Group’s commitment to
reducing emissions in line with the Paris Agreement goals.
BOARD OF DIRECTORS
I would like to welcome publicly Miriam Greenwood to the
Board, who joined us in November and has become Chair
of the Remuneration Committee. Miriam brings extensive
experience and expertise to the Remuneration Committee and
the Board as a whole.
In becoming Chair of the Remuneration Committee, Miriam has
succeeded George Yeandle, who is retiring from the Board at
the AGM in September 2024. George has shown outstanding
leadership of the Remuneration Committee over the last nine years
and I want to thank him for his great contribution to the Board.
We have announced previously that the process of seeking
a new Chair had started. This process is progressing well
and we will update shareholders when we have news on an
appointment.
RESULTS
Gross Profit of £186.1 million (2023: £229.8 million), includes
£10.4 million of performance fee revenues (2023: £18.5
million), with a Revenue Margin1 of 0.620% (2023: 0.625%) on
Average AuMA of £28,330 million (2023: £33,815 million).
Adjusted profit before tax1 is £67.430 million (2023: £87.083
million), a decrease of 22.6% compared to last year, with an
Adjusted Operating Margin1 of 35.5% (2023: 37.7%).
Statutory Loss before tax of £0.6 million (2023: Statutory
Profit before tax of £49.3 million), This includes charges of
£68.0 million (2023: £37.8 million) relating to acquisitions
and non-recurring costs (£18.8 million); the non-cash
amortisation and impairment of the acquisition-related
intangible assets and goodwill (amortisation: £12.1 million,
impairment: £37.1 million).
Adjusted profit before tax1 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 7 on page 166 for a reconciliation of
Adjusted profit before tax1.
DIVIDEND
The Board has declared a second interim dividend of 50.0
pence per share (2023: 50.0 pence) bringing the total dividend
for the financial year ending 31 March 2024 to 72.0 pence
per share (2023: 72.0 pence per share).
The second interim dividend will be payable on 9 August 2024
to shareholders who are on the register as at 5 July 2024, the
shares going ex-dividend on 4 July 2024. Last day for Dividend
Reinvestment Plan elections is 19 July 2024.
LOOKING FORWARD
Liontrust has built a great business of which I am proud to be
Chair. This has been based on the hard work and dedication of
the team at Liontrust, along with their expertise, and the Board
thanks everyone for their contribution. We are confident the
actions taken by management will reap rewards in the future.
Alastair Barbour
Non-executive Chair
25 June 2024
“I am pleased to report that the Liontrust operating model is robust with the Group
having good capital strength. Over the financial year, Liontrust delivered adjusted
profit before tax of £67.4 million, gross profit of £186 million and the full year
dividend is being maintained at 72p per share”
ALASTAIR BARBOUR
CHAIR
1This is an Alternative Performance Measure. See page 32 for details.
13
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT
CHIEF EXECUTIVE OFFICER’S REPORT
This has been a challenging year for Liontrust. As the Chair has
outlined in his statement, the market environment and investor
sentiment has been negative for many of our strategies and this
has driven the net outflows for Liontrust over the financial year.
We have full confidence in our proven investment teams and
processes delivering over the long term for investors. Liontrust
has also been developing the business to put it in a strong
position to drive the next stage of our growth. We are pleased
with the progress we have been making and how Liontrust is
structured to capitalise on the opportunities ahead after the
headwinds that the Group has faced over the last year.
INVESTMENT PROPOSITION
We have continued to expand Liontrust’s investment proposition
as part of the strategic objective to diversify the product range.
Liontrust has added the Global Equities team headed by
Mark Hawtin. Mark has 40 years of investment experience,
having been Head of Global Equities at GAM Investments
and a partner and portfolio manager at Marshall Wace Asset
Management. We are very pleased with the feedback about
the new team and they are already bringing us opportunities
to broaden our client base globally.
The Economic Advantage team headed by Anthony Cross has
expanded their capability through the recruitment of Alexander
Game from Unicorn Asset Management, while Natalie Bell is
now a named manager of the UK Smaller Companies and UK
Micro Cap funds.
The outflows of assets from UK equity funds and depressed
valuations of UK listed companies is threatening the robustness
of the stock market. Many fantastic UK companies are being
taken private too cheaply, are subject to takeovers by overseas
companies or are choosing to list outside the UK. For these
reasons, we support initiatives that will attract greater capital
and companies to the UK stock market.
We welcomed the Government’s announcement of the intention
to bring in a UK ISA. Liontrust, particularly the Economic
Advantage team, has been actively engaged with the
Government over the idea and the subsequent consultation.
Liontrust believes in the long-term potential of the UK
economy and its ability to produce world class
companies. What we need are the incentives
to encourage these companies to list on the
UK market.
Liontrust expanded the fund offering during
the last year with the launch of the GF
Sustainable Future US Growth Fund in
July 2023, which is managed by the
Sustainable Investment team, and the GF
Pan-European Dynamic Fund in February
2024, which is managed by the Cashflow
Solution team and attracted more than
€200 million within four months.
The Liontrust European Dynamic Fund
won the award for best Europe ex
UK Fund for the third year running at
the prestigious Fund Manager of the
Year awards on 20 June. The Liontrust
European Strategic Equity Fund and
the Liontrust India Fund were both
shortlisted for awards.
Liontrust has continued to deliver strong long-
term fund performance for our clients. Of
Liontrust’s funds, 86.3% are in the first
or second quartile of their respective
sectors since the funds were launched
to 31 March 20241.
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LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
Liontrust has been merging funds where we can produce
economies of scale for the benefit of investors, such as the Global
Equity and Global Focus funds into the Global Alpha Fund. These
mergers also enable the Group to focus on those funds where
there is significant existing or potential client demand.
EXPAND DISTRIBUTION
Another of our four strategic objectives is to further broaden
distribution and the client base and we have made significant
progress in this area as well by strengthening the sales team
in both the UK and internationally. We made two internal
appointments with Kristian Cook becoming Head of UK
Distribution and Mark Wright being named Head of UK
Regional Distribution. We have also recruited a new head
of strategic partners in the UK and business development
managers for London and the South-East of England.
Jeremy Roberts joined from GAM Investments in March 2024
to be Head of Global Distribution (ex UK) with responsibility
for developing sales internationally. We have strengthened
our distribution capability in Germany with the appointment of
Michael Buchholz. He joins Liontrust in August 2024 as Head
of Distribution for Germany and Austria and will be based
in our branch office in Frankfurt that will open later this year.
Jeremy will be making further hires to build the international
sales team and we will be expanding our physical presence
in continental Europe.
CLIENT EXPERIENCE
We have also focused on providing an excellent level of
service and engagement with clients and ensuring there is a
high level of awareness and understanding of Liontrust funds.
Nearly 1,800 professional intermediaries attended Liontrust
events in 2023 and around 400 have attended the adviser
roadshow around the UK in the spring and early summer
of 2024 at which the Sustainable Investment and Global
Innovation teams have been presenting. Liontrust has a series
of events for professional intermediaries planned through the
autumn.
Liontrust is generating strong investor engagement through
our marketing, with significant development of our digital
presence. Liontrust fund manager videos had more than 2.3
million views from February 2023 to February 2024. A new
weekly video that started in March 2024 to provide a bite-size
review of the latest market and economic news has attracted
42,000 views in the first nine weeks.
Also, from February 2023 to February 2024, Liontrust’s
LinkedIn channel had 8.71 million impressions and 68,578
clicks. LinkedIn followers have grown by nearly 50% in the 15
months to June 2024.
STRENGTHEN TECHNOLOGY AND DATA
Another key way in which Liontrust has been ensuring we are
in a strong position for the future is through developing our
technological and data capability. This includes implementing
new front office portfolio management and research management
systems. These will give us a single front office operating platform
that provides Liontrust with scalability, flexibility and efficiency to
support future growth of the business. These systems will improve
the quality and efficiency of delivering and analysing data and
greater productivity across the business. In time, this will lead to
enhancements for client service and reporting, enabling Liontrust
to develop further our digital capability.
In September 2023 we started a programme to implement a
strategic Enterprise Platform and associated Operating Model
which includes new Front Office tooling – BlackRock Aladdin,
with FlexTrade as the EMS, an extended Middle Office operating
model with BNY and the implementation of BNY Front Office
Service, and a new Enterprise Data platform – BNY Data Vault.
In December 2023 we implemented FactSet RMS, a flexible,
scalable and consistent research management system which
allows our investment teams to store, collaborate and analyse
research, both internally generated and externally acquired.
FactSet RMS allows us to leverage technology to generate
insight and drive efficient, whilst also effectively supporting
growing regulatory reporting requirements and preparing for
emerging technologies like Artificial Intelligence.
LIONTRUST FOUNDATION
Liontrust established its charitable foundation during the financial
year. The Liontrust Foundation was set up to promote social
mobility and preserve and recover nature. The Foundation is
committed to empowering young entrepreneurs and promoting
DE&I in particular through these two objectives.
We have a very strong Board of Trustee Directors, who are
chaired by Simon Hildrey, Chief Marketing Officer at Liontrust.
The other trustees are Mandy Donald (Non-executive Director
of Liontrust), Nathalie Richards (CEO of SEO London) and
Dr Andrew Terry (Director of Conservation and Policy at
Zoological Society of London).
OUTLOOK
Liontrust has put in place the structure to deliver growth. We have
an expanding and compelling range of investment teams with
robust processes; broadening distribution and excellent client
service; great engagement with our campaigns and content; a
strong brand; and an enhanced operating model. This gives me
confidence that we are able to take advantage of the opportunities
and mitigate the challenges for active asset managers in the future.
John Ions
Chief Executive Officer
25 June 2024
1Source: Financial Express, bid-to-bid basis, net of fees, primary share classes. Statistics using monthly return period.
15
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT
1
Continue to enhance the client
experience and outcomes
3
Further broaden distribution
and the client base
2
Diversify the product range and
investment offering
4
Strengthen our technological,
data and digital capability
OUR STRATEGY
Liontrust has four principal strategic objectives:
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LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
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1
Continue to enhance the client
experience and outcomes
Liontrust has a responsibility, and is committed, to delivering
good outcomes for clients and enhancing their experience. This
will engender client loyalty, deepen relationships with clients,
promote the retention of assets, and lead to greater engagement
and therefore flows.
A key part of delivering good outcomes and a great experience is
strong investment performance over the long term. Liontrust believes
this is achieved through rigorous and repeatable investment
processes and the quality of our investment teams. Liontrust ensures
each investment team delivers on their documented investment
process and meets the relevant risk profile.
Liontrust seeks to deliver exceptional client service and support
at all times, including through dedicated sales representatives;
face-to-face meetings and presentations; and relevant,
personalised and engaging communications. Liontrust provides
support to help intermediaries service their clients, including
through educational content and transparent reporting.
Excellent service is achieved through the quality and knowledge
of staff throughout the Company and investment in technology
and data. Liontrust values its people and aims to nurture a
working environment and culture that attracts talent to its business
and retains the talent it has.
Client experience is also enhanced through voting and
engagement with investee companies and Liontrust’s Responsible
Capitalism approach. This includes commitments to net zero
and evidence-based reporting in terms of integrating ESG/
Sustainability, DE&I (Diversity, Equity, Inclusion), the well-being
of staff and contributing to the financial services industry.
Liontrust
continues
to
deliver
strong
long-term
performance. 75% of Liontrust’s fund range is in the 1st
or 2nd quartile of their respective sectors since launch or
fund manager inception to 31 March 2024. Of the eight
Sustainable Investment team’s funds with a 10-year track
record, four are in the 1st quartile and three are in the
2nd quartile
The European Dynamic Fund is the best performer in its
IA sector over three years and is ranked 2nd over five
years
The Global Technology Fund is the best performer in
its IA sector over one year and ranked 7th over three
years
There is improving short-term performance. 71.7% of
Liontrust’s fund range is in the 1st or 2nd quartile over
one year. Five of the 10 UK-domiciled funds managed
by the Sustainable Investment team are in the 1st
quartile of their respective IA sectors over one year
and another two are in the 2nd quartile
Liontrust has strong engagement with clients. Around
1,800 clients attended Liontrust events in person in
2023 and there were more than 2.3 million views of
fund manager videos over 12 months to February 2024
From February 2023 to February 2024, Liontrust’s
LinkedIn channel had 8,711,419 impressions and
68,578 clicks
94% of retail investors find information extremely or
fairly easily on the Liontrust website. 82% of retail
investors who contacted client services were satisfied
by the service they received
The investment teams had 852 engagements with 477
entities in 2023. The teams cast more than 12,000
proxy votes. 45% of the Group’s AuMA is now
committed to net zero by 2030
There is longevity and engagement of staff at Liontrust.
Heads of Department have been at Liontrust an average
of 8.5 years and 56% of staff have been at the Company
for 5 years or more. There was a 82% response rate to
the employee engagement survey in 2023
P R O G R E S S
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LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
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P R O G R E S S
2
Diversify the product range
and investment offering
Liontrust adds to our fund range where we have the fund
management expertise and there is investor demand.
Diversifying the fund range will expand the potential client
base. The demand for product varies between markets and
an expanded fund range helps to meet the different client
requirements.
Liontrust seeks to broaden the asset classes we offer, which will
also enable us to expand the client base and ensure we can
deliver performance through the market cycle. An increase in
asset classes will ensure Liontrust can provide more sustainable
growth in the future even when certain styles of investments are
out of favour with investors.
The expansion of our fund range and investment teams will
come through new launches, recruitment and acquisitions.
Any new teams must meet the investment approach of
Liontrust. Each investment team at Liontrust is focused on
active management, a distinct investment process, high-
conviction portfolios, long-term investing and engagement
with investee companies and clients.
Liontrust GF Sustainable Future US Growth Fund was
launched in May 2023
Liontrust GF Pan-European Dynamic Fund was launched
in February 2024 and by April 2024 had raised more
than €150 million
Global Equity and Global Focus Funds were merged
into Global Alpha Fund in the 1st quarter of 2024
Mark Hawtin and his three-strong team were recruited
from GAM Investments to launch the Global Equities
team and joined Liontrust in May 2024. Mark has a
strong track record in managing long only and long/
short equity funds at Marshall Wace Asset Management
and then GAM and will help us to attract assets and
build our client base
Alex Game joined Liontrust in May 2024 from
Unicorn Asset Management as a fund manager for the
Economic Advantage team
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LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
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P R O G R E S S
3
Further broaden 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.
We are seeking to expand further our client base in the UK and
internationally, with a key focus on Europe and South America.
This will be achieved through investment in sales, marketing
and broadening our fund range and asset classes. This
includes developing Liontrust’s physical presence in European
countries and building our brand to match the awareness,
understanding and engagement we have in the UK.
Liontrust strengthened the sales capability with the
internal appointment of Kristian Cook as Head of
UK Distribution and bringing single strategy and
multi-asset sales into one team in the UK to enhance
further the levels of service we provide clients. The
new structure provides greater focus and clarity of
responsibilities and will broaden the product range for
each salesperson
Mark Wright has been promoted to Head of UK
Regional Distribution and Sophie Andrews joined
in June from Franklin Templeton as Head of Strategic
Partners and Consolidators
There continues to be strong activity with UK clients to
expand distribution. 806 clients attended the World
Markets Review Roadshow (Multi-Asset), 643 attended
the Sustainable Future Roadshow, 201 attended the
Sustainable Future Virtual Conference, and 340
discretionary clients attended bespoke fund manager
presentations
Jeremy Roberts joined in March 2024 as Head of
Global Distribution ex-UK. He will enhance Liontrust’s
capability to expand distribution internationally by
building on the sales platform and client base we have
established
Sales have been increasing in South America to the
institutional market
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LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
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P R O G R E S S
4
Strengthen our technological,
data and digital capability
Liontrust seeks to use technology and data to improve the client
experience, support expansion of the Company and make the
business more efficient.
We are enhancing the management and distribution of data
to enable better data-led decisions across the business, embed
the ability to scale the operating model and provide support
to the investment teams. Liontrust is enhancing the analysis of
data to provide the Distribution team with increased market
intelligence and lead generation.
Through becoming a more data-centric organisation, we will
be able to support clients to better develop the personalisation
of communications, integrate new data tools such as AI,
increase productivity and improve efficiencies.
A new research management system (RMS) was
implemented in the 4th quarter of 2023
A new order management system (OMS) and execution
management system (EMS) have been selected and
will be implemented in the 3rd quarter of 2024
A new cloud-based data store has been selected
and will be implemented in the 3rd quarter of 2024,
creating a single hub of data with the supporting
ecosystem that can be relied upon by all departments
in the business
We are upgrading the CMS (content management
system) of the Liontrust website to extend further the
personalisation of communications
We are developing the management of data to
enhance and better leverage lead generation
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LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT
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PROCESS DRIVEN
Each investment team applies distinct
processes, which are rigorous and
documented, to managing funds and
portfolios to ensure the way they
manage assets is predictable and
repeatable and to prevent them from
investing in stocks and portfolios for the
wrong reasons
ACTIVE MANAGEMENT
Liontrust fund managers have the
courage of their convictions in making
decisions, ensuring our funds and
portfolios are truly actively managed
for the long-term benefit of
our clients
LONG-TERM APPROACH
Each of the investment teams takes a
long-term approach to managing their
funds and portfolios through applying
their distinct investment processes
EXPERTISE
Liontrust focuses on those areas of
investment in which we have
particular expertise
ENGAGEMENT
The investment teams ae committed to
engaging with their investee companies
and clients
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
STRONG AND DISTINCTIVE BRAND
The Liontrust brand is accessible and
engaging and represents our values of
courage, power, pride
CULTURE
Liontrust takes pride in acting in the
best interests of clients and delivering
good customer outcomes at all times.
Liontrust seeks to empower our staff
to fulfil their potential and foster an
environment in which everyone is
engaged. Liontrust believes in the
power of promoting diversity and
inclusion across the business
COMMUNITY ENGAGEMENT
We focus on financial education,
providing opportunities for young
people and wildlife conservation
OUR BUSINESS MODEL
Liontrust is a specialist asset management company that
was founded in 1994 and was listed on the London Stock
Exchange in 1999. Liontrust invests on behalf of our clients –
institutional investors, professional intermediaries and personal
investors – who are primarily, but not exclusively based in the
UK, Europe and South America. The investments are managed
through funds, portfolios and segregated accounts. As at 31
March 2024, Liontrust managed £27.8 billion in AuMA
across seven investment teams.
These assets are invested with the objective of delivering strong
long-term performance through distinct investment processes
to enable clients to achieve their goals and enjoy a better
financial future. This is complemented by Liontrust developing
long-term relationships with our clients.
Liontrust also has a strong role to play in supporting businesses
and innovative companies, working to allocate capital towards
positive outcomes that benefit the economy and society.
Liontrust takes great pride in our role as active managers.
What makes Liontrust distinctive?
23
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
FINANCIAL STATEMENTS GOVERNANCE STRATEGIC 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 positive outcomes.
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.
24
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
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
(which increased to eight after the end of the financial year) 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.
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.
Our sales and marketing teams promote our funds and
portfolios in the UK and internationally. In the UK, we market
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
written
and
video
communications, digital marketing, advertising, sponsorships and
PR. Digital is a key, and ever-more important, driver of our brand
profile and engagement, including through our website, social
media, email communications and advertising and promotions.
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 teams 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.
For more on risk management, see the section on Principal Risks.
25
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
FINANCIAL STATEMENTS GOVERNANCE STRATEGIC 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 are monitored by the Portfolio Risk Committee that is
chaired by the Chief Risk Officer (CRO).
Governance
Liontrust takes its corporate governance responsibilities very
seriously. Liontrust upholds the highest standard of integrity in
all of its actions and strives for excellence in everything we do.
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
COURAGE
• Liontrust does not follow the herd
and has the courage to have
independence of thought
• The business has the courage to
do the right thing, make decisions
and be nimble
• Liontrust has the courage to take
an active and engaged approach
to investing, clients, staff and
society
POWER
• Liontrust believes in the power of
promoting diversity and inclusion
across the business, bringing
diverse and inclusive thinking and
approaches to our purpose
• We seek to empower our staff to
fulfil their potential and foster an
environment in which everyone
is engaged and encouraged to
actively participate in the business
• Liontrust benefits from the power
of being dynamic and ambitious,
promoting positivity and
adaptability to change
PRIDE
• We take pride in seeking to act
in the best interests of clients
and delivering good customer
outcomes at all times
• Our staff are responsible for
upholding the highest standards
of integrity, taking pride in being
trustworthy and transparent while
making decisions with a clear
sense of fairness
• Everyone takes pride in being
responsible for supporting each
other, collaborating, treating each
other with dignity and respect,
and being open-minded to new
ideas, challenge and debate
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LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
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LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT
FINANCIAL REVIEW
Financial performance
Loss before tax was £0.579 million (2023: profit before tax
£49.301 million). The loss before tax for the year includes
£15.7 million of acquisition and reorganisation costs incurred
as a result of the acquisition and reorganisation costs. In
addition, the impairment losses of £7.3m and £29.8m on
Architas and Majedie respectively have been recognised in
the period.
Adjusted profit before tax*, which adjusts for amortisation,
impairments and other costs relating to acquisitions; restructuring
and severance compensation decreased to £67.430 million
from £87.083 million last year and from £96.556 million
two years ago, reflecting the increase net outflows and fall
in AuMA due to current market conditions. Nonetheless,
adjusted profit before tax is driven primarily by stronger than
expected performance fee revenues during the Financial Year
of £10.4 million (2023: £18.5million) received across three
of our investment teams (Sustainable Investments team, Global
Fundamental team and Cashflow Solution team)).
Table (a) Analysis of financial performance
Year ended
31 Mar 24
£’000
Year ended
31 Mar 23
£’000
Year on
year
change
Revenue excluding
performance fees
187,480
224,855
-17%
Performance fees
10,409
18,484
-44%
Cost of sales
(11,828)
(13,569)
-13%
Gross Profit
186,061
229,770
-19%
Other gains
1,022
2,467
-59%
Administration expenses
(188,932)
(183,210)
3%
Operating (loss) profit
(1,849)
49,027
-104%
Net interest
1,270
275
362%
Loss/(profit) before tax
(579)
49,302
-101%
Adjustments – see note 7
on page 166
68,009
37,781
80%
Adjusted profit before tax*
67,430
87,083
-23%
Gross profit
Gross profit fell by 19% compared to last year and decreased
by 20% compared to two years ago.
Figure 1 – Gross profit £’000
Average AuMA
Average AuMA decreased by 16% to £28,330 million
compared to last year and 18% lower than 2022.
Figure 2 – Average AuMA £’billion
250,000
200,000
150,000
100,000
50,000
0
FY22
FY23
FY24
Performance fee revenues (£’000)
Non-performance fee revenues (£’000)
£40
£35
£30
£25
£20
£15
£10
£5
£0
FY22
FY23
FY24
*These are Alternative Performance Measures. The disclosure, definition and nature of adjustments to GAAP measures to the
disclosed APMs is a judgement made by management and is a matter referred to the Audit & Risk Committee for approval prior
to issuing the financial statements. See Page 32 for further details.
28
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
Revenue Margin*
Revenue margin decreased by 0.005% from 31 March 2023
to 31 March 2024 compared to decrease by 0.011% two
years ago.
Figure 3 – Revenue Margin*
Adjusted profit before tax* and Adjusted operating margin*
Adjusted profit before tax* fell from £87.083 million to £67.430
million a year ago and from £96.556 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
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*
50%
40%
30%
20%
10%
0%
FY22
FY23
FY24
Adjusted profit before tax
£67.4m
*These are Alternative Performance Measures. The disclosure, definition and nature of adjustments to GAAP measures to the
disclosed APMs is a judgement made by management and is a matter referred to the Audit & Risk Committee for approval prior
to issuing the financial statements. See Page 32 for further details.
120
100
80
60
40
20
0
FY22
FY23
FY24
0.8%
0.6%
0.4%
0.2%
0%
FY22
FY23
FY24
29
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT
Administration expenses
The largest component of our costs, in common with other
service companies, is member and employee related expenses.
Staff compensation as a percentage of Gross profit decreased
when compared to last year and the year before, even though
headcount increased reflecting stringent cost control and
reduced revenue share compensation to fund managers. See
Figure 6 below.
Figure 6 – Employee and member related expenses as a
percentage of Gross profit*
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 (2023:
50.0 pence) which will result in total dividends for the
financial year ending 31 March 2024 of 72.0 pence per
share (2023: 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
57% (See Figures 7 and 8 below).
Figure 7 – Dividend per share (pence)
Dividend margin is calculated by taking the dividend amount
divided by adjusted diluted EPS excluding performance fees.
Figure 8 – Dividend margin*
100%
75%
50%
25%
0%
50%
45%
40%
35%
30%
FY22
FY23
FY24
80
70
60
50
40
30
20
10
0
FY22
FY23
FY24
FY22
FY23
FY24
*These are Alternative Performance Measures. The disclosure, definition and nature of adjustments to GAAP measures to the
disclosed APMs is a judgement made by management and is a matter referred to the Audit & Risk Committee for approval prior
to issuing the financial statements. See Page 32 for details.
30
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
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.
When setting the dividend, the Board looks at a range of
factors, including:
• the macro environment;
• the current balance sheet; and
• future plans.
It is our intention that dividends will be declared and paid half
yearly.
Statement of viability
In accordance with provision 31 of the 2018 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 2027. The Directors’
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.
The three-year period is consistent with the Group’s current
strategic forecast and the 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.
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.
Maintaining a strong capital position
Liontrust’s increased surplus supports the growth in the Group
and dividend payouts.
Regulatory Capital
Mar-24
£m
Mar-23
£m
Capital after regulatory deductions1
101.9 113.3
Regulatory Capital Requirement2,3
22.8 26.8
Surplus Capital
79.1 86.5
Foreseeable Dividends4
(31.9)
(32.1)
Surplus Capital after foreseeable dividends
47.2
54.4
Note, the capital position for the Group as at 31 March 2024
(audited) includes the impairment of the intangible assets and
goodwill.
1Group Capital minus own shares, intangibles and goodwill
adjusted for deferred tax liabilities
2For the financial year ended 31 March 2024, the Group
Capital requirement calculated per MiFIDPRU is estimated and
will be finalised as part of the September 2024 ICARA process
3For the financial year ended 31 March 2023, the Group
Capital requirement calculated per MiFIDPRU as part of the
September 2023 ICARA process
4The Second interim dividend of 50.0 pence per share paid or
to be paid in August following the financial year end
Capital after regulatory deductions
Capital after regulatory deductions: £m
Regulatory Capital Requirement
26%
Foreseeable Dividends
22%
Surplus Capital after foreseeable dividends
46%
TOTAL
£101.9M
120
100
80
60
40
20
0
FY19
FY20
FY21
FY22
FY23
FY24
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LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
FINANCIAL STATEMENTS GOVERNANCE STRATEGIC 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 and impairment expenses, and costs associated
with acquisitions, restructuring and severance compensation
related costs. 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:
1. Interest received/paid;
2. Tax;
3. Amortisation of acquisition related intangible assets;
4. Impairment of acquisition related intangible assets and
goodwill;
5. Expenses, including professional and other fees relating to
acquisitions and potential acquisitions;
6. All employee and member severance compensation
related costs;
7. Significant reorganisation expenses related to systems and
outsourced services that enhance our target operating
model; and
8. Other cash and non-cash expenses which are non-recurring
in nature.
Reconciliation: Note 7.
Reason for use: This is used to present a measure of operating
profitability of the Group which is aligned to the requirements
of shareholders, potential shareholders and financial analysts,
and which removes the effects of significant acquisitions,
financing and capital investment, which eases the comparison
with the Group’s competitors who may use different accounting
policies and financing methods. It provides shareholders,
potential shareholders, and financial analysts with a consistent
year on year basis of comparison of an “operating profit
before tax”, 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 less any revenue attributable to
performance related fees.
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. The disclosure, definition and nature of adjustments
to GAAP measures to the disclosed APMs is a judgement made by management and is a matter referred to the Audit & Risk
Committee for approval prior to issuing the financial statements.
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LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
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 decreased 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/inflows into Group funds
and portfolios less total redemptions/outflows 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 MPS accounts where
there is no reliable investment performance benchmark, the
flows are not included.
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LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
FINANCIAL STATEMENTS GOVERNANCE STRATEGIC 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 2024:
Investment Week Fund Manager
of the Year Awards 2023
Europe category
Liontrust European Dynamic Fund
AJ Bell Investment Awards
Ethical/Sustainable – Active
Liontrust Sustainable Future Global Growth Fund
Professional Paraplanner Awards 2023
Best ESG Investment Solution Provider
Liontrust
CAMRA Data Awards 2023
European Inc. UK Equity – Core (EUR)
Liontrust GF European Stategic Equity Fund
CAMRA Data Awards 2023
UK Equity – Small Cap (GBP)
Liontrust UK Smaller Companies Fund
Investment Week Investment Marketing
and Innovation Awards 2023
Best Website
Professional Pensions Investment Awards 2023
Sustainable Corporate Bond Manager of the Year
Professional Adviser Awards 2023
Best Responsible Fund
Liontrust Sustainable Future Managed Growth Fund
Online Money Awards 2023
Best Investment Trust
Liontrust
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LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
COMMUNITY ENGAGEMENT
There are three key objectives that we are aiming to achieve
through the Liontrust community engagement programme:
• Raise financial awareness and literacy throughout society
• Provide opportunities for young people
• Wildlife conservation
Wildlife conservation
Liontrust are proud sponsors of the global conservation charity
ZSL and their efforts to protect the Asiatic lion from extinction, a
partnership of more than a decade.
London Zoo is home to a pride of Asiatic lions. An endangered
species, there are fewer than 700 Asiatic lions remaining in the
wild, and their dependency on one singular habitat in north-
west India means the big cats are particularly vulnerable to
natural disaster or a disease outbreak.
Male Bhanu and female Arya at London Zoo gave birth to
three lion cubs in April 2024. These three cubs are not only a
huge boost to the conservation breeding programme, which
ensures a healthy population of lions are cared for in zoos to
provide a vital safety net for the vulnerable wild population,
but they will also inspire millions of people to care and take
action for wildlife.
Liontrust and London Zoo asked primary school pupils from
around the UK to nominate names for the three cubs. From
the more than 650 names nominated by pupils, Liontrust and
the lion keepers chose a shortlist of three names for each cub.
Listeners to Times Radio and readers of The Times then voted on
their favourite three names – Syanii, Mali and Shanti.
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.
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’s partnership with London Zoo – run by ZSL – supports its
mission to educate millions of people about wildlife and inspire
them to act.
Five protected areas currently exist to protect the Asiatic lion
in India: the Gir Sanctuary, Gir National Park and Pania
Sanctuary form the Gir Conservation Area (GCA) covering an
area of 20,000 km2 of forest representing the core habitat for
the Asiatic lion. The other two wildlife sanctuaries, Mitiyala and
Girnar, protect satellite areas within a lion’s range distance of
the Gir Conservation Area.
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LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT
ZSL London Zoo’s flagship exhibit Land of the Lions is an
immersive and engaging hub for ZSL’s Asiatic lion conservation
and education efforts, and an area sponsored by Liontrust.
Transporting visitors from the heart of London to India’s vibrant
Sasan Gir, people can get closer than ever before to the lions,
while embarking on an adventure through the Indian-inspired
experience. From exploring an Indian barber shop, in the replica
Sasan Gir high-street to a train-station, the exhibit truly gives
visitors a sense of just how close lions and people live in India.
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 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 offers 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 are also invited to play in competitive
games against other ETC programmes.
Liontrust’s focused support and investment via the ETC
improves accessibility and increases inclusivity for local
young female footballers, who are starting out on an elite
development pathway. The FA’s ETC programme will lead
to the number of young female players engaged in FA
programmes nationally rising from 1,722 to over 4,200 by
the end of the 2023/24 season.
The FA Girls’ Emerging Talent Centres are a fantastic initiative
as they provide the chance for female players to develop their
football skills and be offered a potential pathway all the way to
the Lionesses. The ETCs ensure players can participate in elite
training.
Ash Hackett, CEO, Blackpool FC Community Trust said: “We
are very pleased that Liontrust has taken such an interest in our
Girls’ Emerging Talent Centre. One of the elements that has
made our project unique across the country is that we have
removed all charges for the players, to support with removing
the barriers to taking part and Liontrust’s support really
contributes to this. I’d like to thank Liontrust for its support in
allowing us to make this the best opportunity for local girls
and really increase the quality of the only FA
endorsed provision for talented players
on the Fylde Coast.”
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LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
Here are some examples of the achievement of the Blackpool
FC Girls’ ETC:
• Offering free playing and training kits to players
• Engaging 120 girls in academy level football
• Three girls from the ETC teams have been nominated for the
England Talent Pathway
• Two girls from the ETC teams were invited to play at Manchester
City and Manchester United’s Pro Game Academy squads
Financial Education
10ticks
Liontrust partners with 10ticks to enable them to deliver
worksheets and new digital maths education to primary and
secondary 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 many measures that 10ticks uses for mental arithmetic
and improvements in pupils using digital maths education. A
speed evaluation is based on a Beat the Clock game that
measures how many questions you can answer correctly in
60 seconds. An accuracy evaluation is based on a Perfect 10
game measuring how quickly you can answer 10 questions
in a row correctly without a mistake. To measure percentage
improvement, an initial baseline test is measured against the
ongoing average score. This improvement is mapped against
the number of times pupils log in to the system. On average,
pupils engaging with the system more than twice a week have
increased their speed by 59.2% and improved their accuracy
by 49.7%. To March 2024, 15.4 million questions have been
answered by Liontrust pupils.
In September 2023, Gamification was introduced as a feature
on 10ticks. This approach fosters repetition and sustained
engagement with mental maths questions through an incentivised
reward system. To date, over 100,000 challenges have been
successfully completed. With the appeal of rewards driving
motivation, we anticipate heightened engagement, prolonged
play sessions, and increased frequency of interactions.
10ticks works with thousands of teachers across the UK,
making over 10,000 worksheets covering a huge variety of
pedagogical styles including problem solving, puzzles, games,
investigations, consolidation, Action Maths and Mastery
available to their pupils. There are over 30% of secondary
schools signed up to 10ticks.com, 10ticks.co.uk or both out
of the targeted 4,171 schools. There are approximately 4
million children in this sector so the partnership is potentially
reaching 1,240,000 children. 2,410 primary schools have
signed up to 10ticks.com, 10ticks.co.uk or both via Liontrust,
meaning we reach 11.5% of the 20,800 primary schools we
are targeting in the UK. There are approximately 5.5 million
children in this sector so we are reaching potentially 632,000
primary school children.
Newcastle United Foundation
Liontrust partners with Newcastle United Foundation (NUF)
to provide a numeracy programme, Financial Football. This
is designed to give primary school children a head start in
financial education.
The six-week programme has helped to break down any
barriers that children face in understanding and learning about
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.
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.
Since launch, 28 programmes have been completed with
756 pupils involved. Pupils were presented with five questions
pre- and post-programme and the results show that Financial
Football has led to a significant improvement in the percentage
of students who answer correctly. Year four students improved
their score from 32% to 73%, and year 5/6 pupils improved
their score from 55% to 76%.
The project, which involves interactive games around
football, is working with Years 4, 5 and 6 pupils and
reaching more than 500 primary school children a year.
Financial Football has introduced a new maths education
programme to increase primary school children’s confidence
and understanding of this subject.
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 will be used to work with
all members of the local community. Currently, Newcastle
United Foundation is helping around 65,000 people across
the North-East of England.
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LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
FINANCIAL STATEMENTS GOVERNANCE STRATEGIC 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 a 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 purpose 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
POWER
• We are trusted and empowered to make decisions given
we follow transparent, systematic, and thorough processes.
• We believe that a diverse workforce promotes innovation
and growth through independent thinking and new ideas.
• We are committed to contributing to and benefiting the
wider society.
• 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 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.
• We avoid excess complexity, appreciating that simple
solutions are better and more effective.
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 understand mistakes are inevitable and have the
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 aim to correct the root cause of incidents, rather than
implement temporary workarounds.
PRIDE
• We uphold the highest standards of integrity in all of our
actions, treating staff, clients and stakeholders fairly and
with respect.
• We are encouraged to be transparent and open to provide
our customers with information in a way that helps them
make the right decision.
• We own our risks and firmly understand how the risks we
manage can impact the firm.
• We are encouraged to follow the spirit of the rules, not just
the words.
• Senior management lead by example, demonstrating high
integrity in and outside the workplace.
• We do not turn a blind eye to inappropriate behaviour.
• We take personal responsibility for having the due skill and
knowledge to do our jobs well.
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LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
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 and risk appetite.
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
ICARA and the regular risk reporting.
• 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. Breakout reporting is completed on the
cross-cutting risk themes for further insight, i.e. Reputational,
Conduct and ESG 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.
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LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT
Liontrust Board
Audit & Risk Committee
ICARA
Risk Appetite Statement
Operational Risk Report
Credit Risk Report
Portfolio Risk Report
Ad hoc risk reports
Enterprise Risk Report
Risk Management Process and Internal controls
The broad process for managing risk in the framework essentially follows these steps:
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:
Define Risk
Universe
Agree Risk
Appetite
Manage
the Risk
Monitor
the Risk
Risk
Description
Credit risk
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.
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
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
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:
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
The risks arising from poor investment returns, incorrect levels of investment risk or liquidity issues in the funds.
People / Talent
Management
The risk of losing experienced and talented staff or a failure to develop or attract staff.
Regulatory,
Compliance, Conduct
and Financial Crime
The risk of legal penalties, financial forfeiture and material loss if Liontrust fails to act in accordance with industry laws
and regulations.
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
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LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
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 accordingly which enables
drill-down analysis.
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:
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LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
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Liontrust Asset Management Plc Board
LIPPM / LFPPM
Front Office
Risk
Internal Audit
Operations
Compliance
External Audit
Sales & Marketing
Finance (Controls)
AAF Assurance Process
Finance (Treasury)
IT Security
Consultancy Reviews
Audit & Risk Committee
Business Departments
1st line of Defence
2nd line of Defence
3rd line of Defence
Control Departments
Other Assurance Providers
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 includes 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 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 900
risks were identified, assessed, and categorised into the
standard Liontrust risk area taxonomy. Operational
risk categories have been escalated one level in the
taxonomy to provide more insight into operational
risks. 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 versus residual risk heat maps show a general
down and left movement which shows the effectiveness of the
mitigating controls on our risks.
The heatmaps have 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 a residual basis, they are mitigated
down to manageable levels. In comparison to the previous
year, ratings marked red have relatively increased while those
marked green have decreased.
In comparing the 2023 residual ratings to 2024, the highest risk
ratings within each category remained in the same zone, with
Client, Products & Business Practice being downrated to a lower
rating within the Medium risk zone. Compared to last year, there
were 110 new risks, 48 residual risk ratings increased, 698
were unchanged and 50 ratings decreased. The change in the
risk ratings is driven by a change in the business environment,
increased comprehensiveness of the registers and/or increased
understanding of the risks and controls.
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.
48 risk ratings
increased
50 risk ratings
decreased
0 high rated
318 medium rated
588 low rated
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LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
Risk Profile Charts
Inherent risk
Residual risk 2023
Residual risk 2024
Risk Areas
1.
Credit Risk
2.
Market Risk
3.
Operational risk – Internal Fraud
4.
Operational risk – External Fraud
5.
Operational risk – Employment Practices and
Workplace Safety
6.
Operational risk – Clients, Products & Business Practice
7.
Operational risk – Damage to Physical Assets
8.
Operational risk – Business Disruption & Systems
Failures
9.
Operational risk – Execution, Delivery & Process
Management
10. Business risk
11. Client management
12. Portfolio Management, Investment risk and Liquidity
13. People / Talent management
14. Regulatory, Compliance, Conduct and Financial Crime
Impact
Likelihood
Impact
Likelihood
Impact
Likelihood
1
1
1
7
7
7
2
2
2
3
3
12
12
12
8
8
8
4
4
13
13
14
14
14
11
11
11
6
6
6
10
10
10
5
5
5
9
9
9
HIGH
HIGH
MEDIUM
MEDIUM
LOW
LOW
HIGH
MEDIUM
LOW
13
3
4
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Conduct and ESG Risk Profiles
Conduct and ESG risk cut across the risk universe, and 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 and each risk has been tagged if it
is conduct and/or ESG related. The risks are filtered for those
related to conduct/ESG and used to generate conduct and
ESG risk profile heat maps.
For this analysis:
• Conduct related risks have been defined as risks which may
lead to customer detriment or negatively impacts market
stability.
• ESG related risks encompass those associated with
environmental, social, or governance factors, impacting
the Liontrust Group, including its employees, counterparties,
and clients.
In comparison with the unfiltered risk profile, we observe risks
which are significant for the Group and related to conduct
and ESG retain their rating, such that those linked with clients’
needs, while those risks less related are rated lower, such as
internal distribution target risks.
Conduct Risk 2023 vs 2024
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, outsourcing failures and regulatory
breaches which may impact clients and our ability to meet
their needs.
Conduct Residual Risk 2023
Conduct Residual Risk 2024
Impact
Likelihood
Impact
Likelihood
1
1
7
7
2
2
3
3
12
12
8
8
4
4
13
13
14
14
11
11
6
6
10
10
5
5
9
9
Risk Areas
1.
Credit Risk
2.
Market Risk
3.
Operational risk – Internal Fraud
4.
Operational risk – External Fraud
5.
Operational risk – Employment Practices and
Workplace Safety
6.
Operational risk – Clients, Products & Business Practice
7.
Operational risk – Damage to Physical Assets
8.
Operational risk – Business Disruption & Systems
Failures
9.
Operational risk – Execution, Delivery & Process
Management
10. Business risk
11. Client management
12. Portfolio Management, Investment risk and Liquidity
13. People / Talent management
14. Regulatory, Compliance, Conduct and Financial Crime
HIGH
HIGH
MEDIUM
MEDIUM
LOW
LOW
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LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
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ESG 2022 vs 2023
ESG related risks show a small amount of change over the
year. The Group has enhanced controls on ESG evidencing
for investments however risks stemming from regulatory change,
staff disputes, inducement risk and control change risk either
increased or remain a challenge.
ESG Residual Risk 2022
ESG Residual Risk 2023
Impact
Likelihood
Impact
Likelihood
1
1
7
7
2
2
3
3
12
12
4
4
13
13
14
14
11
11
6
6
10
10
5
5
9
9
Risk Areas
1.
Credit Risk
2.
Market Risk
3.
Operational risk – Internal Fraud
4.
Operational risk – External Fraud
5.
Operational risk – Employment Practices and
Workplace Safety
6.
Operational risk – Clients, Products & Business Practice
7.
Operational risk – Damage to Physical Assets
8.
Operational risk – Business Disruption & Systems
Failures
9.
Operational risk – Execution, Delivery & Process
Management
10. Business risk
11. Client management
12. Portfolio Management, Investment risk and Liquidity
13. People / Talent management
14. Regulatory, Compliance, Conduct and Financial Crime
8
8
HIGH
HIGH
MEDIUM
MEDIUM
LOW
LOW
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LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
FINANCIAL STATEMENTS GOVERNANCE STRATEGIC 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
Objective 4
Description
The failure of an outsourced provider may prevent
the company from carrying out its business.
Trend
Risk Area
Business Disruption
Controls
• Primarily deal with large institutions which are very reliable or are prompt to fix issues.
• 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
Objective 4
Description
Risk faced should our OMS fail – it is the most
important system in our trading infrastructure.
Trend
Risk Area
Business Disruption
Controls
• Trading Resilience Plan.
• 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. The Group’s front office
infrastructure is undergoing substantial change with a goal of further mitigating this risk.
Risk summary
Control Change Risk
Strategic Link
Objective 4
Description
Risk stemming from material changes to control
infrastructure.
Trend
Risk Area
Business Risk
Controls
• Oversight by senior managers and specialist external consultants.
• Expert staff within first and second lines of defence.
• Thorough testing procedures for change.
• Industry leading, widely used counterparties.
Comment
Liontrust is well experienced with managing change efficiently and effectively with its history of no major operational incidents
over a number of acquisitions and outsourcing changes. The robust controls around our trading and operations infrastructure
has been vital to this success. The upcoming change to our trading and operations infrastructure presents significant
opportunity and risk due its complexity and our reliance on the controls in mitigating our highest risks.
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Risk summary
Major economic decline / correction
Strategic Link
Objective 1
Description
Major risk-off movement or correction leading to
large net outflows.
Trend
Risk Area
Client management and mis-selling – poor service
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.
Risk summary
The risk of poor customer service
Strategic Link
Objective 3
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. This risk has materialised for the past
few years and has demonstrated how market conditions can trigger and sustain the negative momentum on outflows.
Risk summary
Loss of key/large clients
Strategic Link
Objective 1,2 and 3
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
Controls
• Clarity around investment process and strategy.
• 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.
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LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
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Risk summary
Risk of target net flows not met
Strategic Link
Objective 2 and 3
Description
Missing targets, could result in profit warnings and
reduced returns for Liontrust shareholders
Trend
Risk Area
Client management and mis-selling – poor service
Controls
• Constant monitoring of sales against targets.
• Engaging clients, increased marketing activity.
• Well established brand.
Comment
Strategic objective for continued growth, exposed to macro and style factors.
Risk summary
Staff disputes / legal action
Strategic Link
Objective 1
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
Controls
• Terminations performed in accordance with procedures.
• 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.
Risk summary
Trading Errors
Strategic Link
Objective 4
Description
Trading Errors can occur and may result in
substantial compensation payments especially if the
error is large or not discovered in a timely manner.
Trend
Risk Area
Execution, Delivery & Process Management
Controls
• 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.
• 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. The front office infrastructure is undergoing significant change which aims to
further mitigate this risk.
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Risk summary
Key person risk – Fund managers
Strategic Link
Objective 1 and 2
Description
Loss of key fund managers which could immediately
lead to changes in ratings and potential
redemptions.
Trend
Risk Area
Execution, Delivery & Process Management
Controls
• Team approach for fund management rather than individuals.
• Succession planning and staff development plans.
• Ongoing engagement and communication with clients.
• Revenue share and retention model.
• Positive, supportive, and inclusive workplace culture.
Comment
Clients may associate their investment more heavily with the fund manager rather than the investment process or Group,
leading to significant redemptions on team changes, primarily for smaller teams.
Risk summary
Performance – Funds and segregated accounts
Strategic Link
Objective 1
Description
Failure to deliver strong performance or meet client
expectations.
Trend
Risk Area
Portfolio Management, Investment risk and Liquidity
Controls
• Robust, well documented investment processes.
• Detailed and transparent performance commentary by Fund Managers shared with Clients.
• Ongoing engagement and communication with clients.
• Internal oversight of fund composition and performance.
Comment
Commercial risk that despite sound long term investment processes, we risk underperformance over shorter periods which is
often associated with increased redemptions.
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LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT
The most material sources of risk for Liontrust are:
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 integrations. 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.
Artificial Intelligence (AI) technology has made significant leaps
recently in terms of its abilities and accessibilities. AI is expected to
have a profound impact on the world, but it is being leveraged by
malicious actors to launch ever more sophisticated cyber attacks
which drives the need for us to build ever more resilient defences.
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.
Change Risk
Liontrust has undertaking many significant change projects over
recent years. These include several acquisitions, outsourcing of
critical operational services and currently the transition onto new
front office infrastructure.
Each change aims to bring Liontrust closer to achieving its
mission, however they also present significant operational risk.
The operational success of its acquisitions and changes can be
attributed to the high quality people, processes and oversight.
Liontrust has built a strong diligent culture which is a key mitigation
against complacency. The Group leverages its experience to
continuously learn and improve, leading to improved capacity
and confidence to tackle more ambitious changes.
The front office infrastructure change impacts our critical trading
systems. Some key areas of risk include:
• Sufficient training of Fund Managers, Traders and support staff.
• Challenges of redesigning and testing connectivity to and
from the new systems to key internal and external counterparts.
• Ensuring control processes are reliable, accurate and
comprehensive.
• Strain on existing resources to manage the transition on top
of their BAU workload.
Leveraging the expertise of consultants to oversee and project
manage the transition is a key control to ensuring the above risks
are mitigated.
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
Consumer
Duty risk
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ESG 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
ESG throughout our business is in the “Responsible Capitalism”
section of this report on page 62.
Client Concentration and the risk of redemptions at short notice
Liontrust has several large, key clients and relationships.
Should a large client leave 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 Residual 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
and charges, a growing importance of brand and marketing
and distributor relationships. Initiatives such as Consumer Duty
and the Assessment of Value promote transparency and enable
clients to better compare funds.
AI has the potential to dramatically enhance our scalability
and efficiency, across the business. Careful consideration must
be given to weaknesses of AI, including the management of
information controls and the accuracy of output. Firms are at risk
of being left behind as the industry begins to incorporate and
leverage the technology.
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 Geopolitical risk
The Group is susceptible to any economic downturn, policy,
increased interest rates, exchange rate fluctuations, geopolitical
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 Group may be faced with increasingly challenging
investment market conditions with persistently high interest rates
and inflation. This along with the macro context of the Ukraine
invasion, conflict in Gaza and South China Sea tensions,
we have seen significant volatility in certain financial and
commodities markets worldwide.
The next 12 months bring significant political uncertainty with
several major economies undergoing government elections
including the US, UK, France, India, Mexico and Taiwan.
Changing political regimes may bring changes in regulations
and policies which may directly affect Liontrust, our investments
and our clients.
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,
including through ongoing training and qualifications, providing
competitive benefits, promoting diversity and inclusion while
conducting regular workforce engagement surveys to track our
progress.
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LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
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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 and
mitigations in place; as well as 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.
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; business resilience, 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.
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STAKEHOLDERS
The Group has a significant number of stakeholders whose
futures are linked to the success of our business.
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,
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.
• 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 pages 83 to 87 provides engagement outcomes
and insight into some of the initiatives undertaken and
engagement activity with significant stakeholders during the
year.
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OUR PEOPLE, SUSTAINABILITY AND
CORPORATE RESPONSIBILITIES
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
Successful asset management firms are based on the quality
of their people. We are proud of everyone who works
at Liontrust and we invest in their training, wellbeing 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 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 (57%) of staff having been with the firm for five
years or more. Unplanned turnover to March 2023 was 6 % (2023: 11%). We focus on keeping our most talented employees,
and our retention of high-performing employees remains strong at 95 % (2023: 100%).
AVERAGE YEARS’ SERVICE
Less than 1 year
9%
1–5 years
4%
6–10 years
31%
11–15 years
14%
16–20 years
8%
21–25 years
2%
Over 26 years
2%
57%
95%
of employees having been with the
firm for five years or more
Our retention of
high-performing employees
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Liontrust encourages open communication and an inclusive
culture. Liontrust’s Executive team hold frequent all-staff
meetings to provide employees with company updates and
to explain and discuss corporate strategies.
Our Executives 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
elected
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. The Forum serves as an advisory group
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 with and supports other
committees which may have complementary agendas for
example, the Diversity & Inclusion Committee.
During the year the Forum has convened four times with
agenda items covering compensation, the financial results
and the acquisition of GAM, facilities and building work, the
engagement survey, self-development month, performance
appraisals, and pension updates.
Workforce engagement survey
In December 2023, we used a new external software
platform to support our annual engagement survey. The
overall response rate was 82% which was the same as
previous year. This ongoing level of participation is positive
considering the potential impact of change on our staff.
Our engagement was 71%, which is slightly ahead of
other Financial Services firms (measured in January 2024).
Engagement looks at how staff describe their commitment to
Liontrust, their motivation and pride.
In addition to the engagement questions we asked questions
around leadership, enablement, action planning from the last
survey and personal development. There were high scores
for work life balance, interactions with managers, the fact
we hold ourselves accountable for delivery and that we
support and feel supported. Less positive areas, and where
we give more focus are around how we focus on success,
give feedback and recognise good work.
Following the 2023 survey our HR team have taken each
of the Heads of Department through their feedback, along
with the teams. This gives everyone the opportunity to hear
the feedback pertinent to their team, and how their team
compares the rest of Liontrust. This gives staff at department
level the chance for customised action planning relevant to
their department, and in conjunction with the wider group.
The overall response rate
to our annual engagement
survey was 82%
82%
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Equal Opportunities, Diversity and Inclusion
Liontrust believes that its people should be appointed to their
roles based on skills, ability 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.
Diversity Equity and Inclusion Committee
Our established Diversity Equity and Inclusion Committee (DEI
Committee) chaired by our COO/CFO 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
and equity to enhance 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 and equity.
• 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 to audit our DEI position and conclusions
from this audit continue to inform the Committee in developing
its strategy. During 2023 we have defined our DEI strategy
under 5 strategic DEI pillars:
• Clients and Investors
• People and culture
• Operations and Finance
• Governance
• Data and Insights
With a focus on Training the Committee have organised training
for all staff on Inclusion for All and provided an extensive
programme of Wellbeing training tailored to both Managers and
Staff. Heads of Department completed sessions around ‘Making
Inclusion Real’ the objective of which was to consider how the
leaders act as change agents for inclusion, and to understand the
impact leadership has on how inclusion is felt across the Liontrust.
The Committee have hosted events through the year to ensure
an inclusive culture and somewhere where everyone can be
themselves:
• Pride
• Black History Month
• IWD
During the year we have partnered with Mental Health at Work
to deliver 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 created
the bespoke programme for Liontrust based on feedback from
our managers and staff with sessions delivered through Spring
and Summer.
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 43% female representation. The Board will
continue to work to ensure the composition of the Board and
the workforce 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 13:9 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 services industry. The
Board and senior management are actively seeking to address
this and investing in leadership development at the ‘direct report’
level. Senior management continue to focus on attracting and
retaining female talent by updating policies and creating a culture
to address the gender balance and gap at Liontrust.
As at the 31st March 2024, Liontrust’s total of 213 employees/
partners was broken down as follows:
2024
Male
Female
Employees
102
83
Members of LLPs
24
4
Total
126
87
For the same period to 31st March 2024, Liontrust’s total
of 213 employees/ partners seniority was broken down as
follows:
2024
Male
Female
Heads of Department
13
4
Direct Reports to the Heads
of Department
27
30
Other Staff
86
53
Total
126
87
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Liontrust has improved
the diversity of the Board
over the last few years
currently with 43% female
representation
43%
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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. We have signed terms
with a female focused search firm.
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 2024, Liontrust’s total of 213 staff was
broken down as follows:
2024
White
152
Black
6
Asian
30
Other Ethic or Mixed Group
14
Prefer not to say
11
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.
In a recent update, each FTSE 350 company will be asked to
set a percentage target for senior management positions that
will be occupied by ethnic minority executives by December
2027. Although Liontrust do not currently meet the criteria, the
Board continue to review appropriate targets for the Company.
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.
We currently have 2 trainees in position, with another who
transferred to permanent employment during 2023. 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 programme graduates to study
and gain qualifications as well as offering a range of personal
and professional training opportunities during the placements.
In addition to the Investment 20/20 programme we have also
hosted an intern from the Milken Institute. The Institute conducts
research, hosts conferences, and constructs programs and policy
initiatives aimed at solving urgent social and economic challenges.
It operates with a mission to improve lives around the world.
Mentoring and Coaching Programme
Liontrust has offered coaching to its staff for a number of
years. During 2023 we have defined our approach to formal
mentoring with training to mentors and mentees in place
in early 2024. 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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Formal Development Programme
During 2023 we continued the investment in a formal
development programme for our employees. During 2023
the programme focused on the direct reports to the heads of
department, with objectives to increase the effectiveness of
leadership at Liontrust, concentrating 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 attendees is a ‘Leadership Charter’
which defines the Liontrust leadership purpose, values, identity
traits and desired behaviours. This Charter has been used
to establish a framework for the development of future talent
through 2024. The behaviour Charter is key to our succession
planning and talent identification. It has been released to
all staff will continue to be embedded in appraisals and
development during 2024.
To understand how the Charter has been understood by our
staff we asked a set of 10 questions related to the behaviours
in our engagement survey. The score across those questions
had 79% of our staff agreeing or strongly agreeing with the
behaviour statements. The feedback is positive and indicates
we still have room to improve.
Self Development Month
During November we had a month focused on Self
Development with a series of events and articles to support
staff with career development. These included:
• A workshop on Career Development Planning. The content
focused on exploring working identity, how to drive growth
and development and understanding a non-linear career.
• Webinar on ‘Sparking Your Own Career Story’ with a
communications coach. This session brought insights,
applicable tools, and tips to talk about career stories
• Face to face workshops on ‘Being your own Coach.’ The
session explored fixed and growth mindsets and the impact
they can have on performance and common thinking traps
and how to overcome them
• Career stories from employees – videos from colleagues on
their personal and Liontrust career journeys
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 have 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. We also have dedicated intranet pages devoted to
the benefits of working at Liontrust.
All-employee Tax Efficient Share Schemes
Our Share Incentive Plan (SIP) 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 2024, 83% of
eligible 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 scheme platform in
partnership with Equiniti, who also act as our registrar.
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86% of staff agree with
statements around
work life blend
86%
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SAYE Scheme
During September 2023 we launched a ‘Save as You Earn’
scheme for employees. This HMRC recognised share saving
scheme allows employees to save up to £500 per months from
net pay, deducted at source for a period of 36 months. The
plan awards options over Liontrust shares a 20% discount to
the Liontrust share price on a set date.
At the end of the savings period employees can exercise their
option and sell the shares, exercise the options and keep the
shares, or take all of their savings back.
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. Within our benefits offering we include
support for both physical and mental wellbeing. We offer
private health care that includes mental health support, online
GP appointments, physical health assessments and access to
an employee assistance programme that provides a 24/7
counselling service, supports employees.
We have a group of accredited Mental Health First Aiders
who are trained to act as a point of contact and provide initial
support, guiding a staff member in need towards the help they
need. They are not therapists or psychiatrists, and they play an
important role in the overall care of our staff.
During 2023 Liontrust focused on Mental Health at work with
a series of training tailored to line managers and individuals.
We also provided training to line managers and staff on
World Menopause day in Understanding Menopause in the
Workplace. The training is further supported by new polices
in support of Menopause and Menstruation at work
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.
Liontrust supports formal flexible working with 8% of our staff
with a non-standard contractual work pattern. We have good
feedback through our engagement survey with 86% of staff
agreeing with statements around work life blend.
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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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 the Group’s clients, its employees, wider stakeholders and
the investments made on behalf of clients. 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 determine more accurately what to
spend time and energy on to provide the best service to clients
across every aspect of the Group’s operations.
RESPONSIBLE CAPITALISM TEAM
The Head of Responsible Capitalism leads a team with a remit
to implement the Responsible Capitalism strategy across the
Group’s operations. The team provides investment teams 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 related
policies (which are approved by the Responsible Capitalism
committee and include the Group’s 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-related activities; helps to
deliver ESG reporting for the Group and its 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.
KEY EXPOSURES
Liontrust takes account of the exposures that its business faces,
works to manage these effectively, and reports on these.
Details are on page 46. For Liontrust, two areas to which the
Group has exposure are: attracting and retaining talent and
the financed emissions that the Group holds in its funds. During
2023, 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 DE&I
These are explored in more detail in the previous section – Our People
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FINANCED EMISSIONS
Liontrust notes the FRC’s CRR Thematic review of climate-
related metrics and targets. The Group has tried to incorporate
as many recommendations as possible. For example, Liontrust
includes this section covering financed emissions as a material
consideration for an asset manager.
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. Following this
initial commitment, Liontrust reported to NZAM in May 2023
on its targets for its operations and investments. The Group
published subsequent updates in its CDP submission in July
2023 and to the PRI in August 2023. Information on the
Group’s net zero commitment is also in its TCFD report which
will be published on its website in June 2024 (for the 2023
calendar year).
An initial 42% of Liontrust’s AUM was committed as part of
the Group’s joining NZAM in May 2023. This figure rose
to 45% as at 31 December 2023. This AUM came from the
investment teams who wanted to support the commitment and
who felt that it sits comfortably with their individual investment
processes.
The Group aims for more of its AUM gradually to join the
commitment – an aim which should be possible as more
carbon data from companies becomes available and as
reporting methodologies for different asset classes become
more standardised.
Liontrust 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.
NEAR TERM SCIENCE BASED TARGETS
In 2023, Liontrust set near-term science based emissions
reduction targets (which were approved by the Science Based
Targets initiative, or SBTi) to show the Group’s commitment
to reducing emissions in line with the Paris Agreement goals.
As part of this, Liontrust commits to 52% of its listed equity
and corporate bond portfolios by market value setting SBTi
validated targets by 2027 from a 2022 base year.
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THE GROUP’S GHG EMISSIONS
The following information summarises the Group’s direct and indirect environmental performance for the calendar year ending 31
December 2023:
Category
Activity
2022 GHG
Emissions (tCO2e)
2023 GHG
Emissions (tCO2e)
% change
SCOPE 1
Stationary combustion
Heating oil
13.5
13.6
1%
SCOPE 2
Electricity
(location-based)
Purchased electricity
62.4
51.7
-17%
Electricity
(market-based)
Purchased electricity
3.24
5.98
85%
SCOPE 3
Purchased goods & services
Spend
5,258
11,671
122%
Water Supply
0.743
0.390
-48%
Capital goods
Spend
N/A
44.1
N/A
Fuel-and-energy-related activities
Heating oil and
purchased electricity
10.9
19.9
83%
Upstream transportation and distribution
Spend
N/A
6.62
N/A
Waste
Recycling
0.0811
0.463
471%
Landfill
0.332
0.790
138%
Waste to energy
0.0426
0.0432
1.4%
Business travel
Air travel
246
615
150%
Rail travel
12.3
16.8
37%
Road travel
46.5
52.9
14%
Hotel stays
32.7
17.6
-46%
Employee commuting
UK commuting
118
112
-4.9%
Luxembourg commuting
7.34
8.41
15%
WFH UK
59.4
57.3
-3.6%
WFH Luxembourg
1.62
1.59
-2%
Scope 1 & 2 Total (location-based)
75.9
65.4
-13.9%
Scope 1 & 2 Total (market-based)
16.7
19.6
17.2%
Total GHG emissions (location-based)
5,869
12,691
116%
Total GHG emissions (market-based)
5,810
12,645
118%
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Streamlined Energy and Carbon Reporting
(SECR) Table
Units
UK
Luxembourg
Total
GHG EMISSIONS
Scope 1
tCO2e
–
13.6
13.6
Scope 2 (location-based)
tCO2e
51.4
0.309
51.7
Scope 2 (market-based)
tCO2e
5.98
–
5.98
ENERGY CONSUMPTION
Electricity
MWh
248
5.95
254
Heating oil
MWh
–
58.2
58.2
Intensities
2022 GHG
Emissions Intensity
2023 GHG
Emissions Intensity
% Change
Scope 1 & 2 intensity per Full Time Equivalent (FTE) (location-based)
0.349
0.303
-13%
Scope 1 & 2 intensity per FTE (market-based)
0.0780
0.091
17%
The emissions intensity calculation is based on a figure of 215.84
Full Time Equivalent (FTE) in 2023. In 2022, a figure of 218 for
Full Time Employees, as opposed to Full Time Equivalent, was
used. Liontrust will report on a Full Time Equivalent basis going
forward to allow for year on year comparison.
2023 data subject to independent limited assurance
under ISAE (UK) 3000 and ISAE 3410. The assurance
report provided by KPMG can be found in the Responsible
Capitalism Report on the Liontrust website.
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FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT
TASKFORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES (TCFD)
Liontrust has prepared the calendar year 2023 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 the Liontrust
website. For calendar year 2023, Liontrust has included reporting on climate scenario analysis, and is therefore now wholly compliant.
The 2023 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
Governance
Disclose the
organisation’s
governance around
climate related risks
and opportunities.
a) Describe the board’s oversight of climate-
related risks and opportunities.
b) Describe management’s role in assessing and
managing climate-related risks and opportunities.
• The Group’s Board has oversight of all Liontrust’s risks and
opportunities, including those related to climate change. Rebecca
Shelley is the named Non-Executive Director for Responsible
Capitalism, including all ESG matters.
• 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 Officer is accountable to the Board for overall
Group performance, including climate-related risks and opportunities.
Strategy
Disclose the actual
and potential
impacts of climate-
related risks and
opportunities on
the organisation’s
businesses, strategy,
and financial
planning where
such information is
material.
a) Describe the climate-related risks and
opportunities the organisation has identified over
the short, medium, and long term.
b) Describe the impact of climate-related
risks and opportunities on the organisation’s
businesses, strategy, and financial planning.
c) Describe the resilience of the organisation’s
strategy, taking into consideration different
climate-related scenarios, including a 2°C or
lower scenario.
• 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
and for financed emissions (investments made on behalf of clients)
and in the context of short, medium and long-term time horizons.
• Liontrust submitted its first report to the Net Zero Asset Managers’
(NZAM) initiative in April 2023. This commitment bolsters Liontrust’s
approach to climate-related strategy both at the Group and the
investments level.
• For investments, in 2023 Liontrust continued to assess climate
scenario testing options and decided to use MSCI’s CVaR metric in
its analysis and reporting.
Risk Management
Disclose how
the organisation
identifies, assesses,
and manages
climate-related risks.
a) Describe the organisation’s processes for
identifying and assessing climate-related risks.
b) Describe the organisation’s processes for
managing climate-related risks.
c) Describe how processes for identifying,
assessing, and managing climate-related risks
are integrated into the organisation’s overall risk
management.
• 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 organisation
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.
c) Describe the targets used by the organisation
to manage climate-related risks and opportunities
and performance against targets.
• Liontrust engaged Good Business to calculate its Scope 1, Scope 2,
and Scope 3 (purchased goods & services, capital goods, fuel and
energy-related activities, upstream transportation and distribution,
waste, business travel, and employee commuting) GHG emissions
for the calendar year 01 January 2023 to 31 December 2023.
• Liontrust commits to reduce its absolute Scope 1 & 2 (market-
based) GHG emissions by 42% by 2030 from a 2022 base year.
This near term target is in line with a 1.5°C trajectory and was
approved by the SBTi in December 2023.
• Liontrust commits to 52% of its listed equity and corporate bond
portfolio by market value setting SBTi validated targets by 2027
from a 2022 base year. This Scope 3 portfolio target was
approved by the SBTi in December 2023.
• Liontrust has also set targets for the proportion of its AUM that has
committed to NZAM.
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GOVERNANCE
Board of Directors
70
Risk management and internal controls report
75
Corporate Governance report
78
Directors’ report
89
Directors’ responsibility statement
94
Nomination Committee report
96
Audit & Risk Committee report
102
Remuneration report
106
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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, and is a former partner of
KPMG in both Bermuda and the UK.
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 listed directorships
Lead Independent Director of the Bank of N.T. Butterfield &
Son Limited (NYSE listed)
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John Ions
Chief Executive Officer
Appointed
John joined the Board in May 2010.
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
Officer of Tactica Fund Management, Joint Managing Director
of SG Asset Management and the Chief Executive Officer 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 Officer. 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.
Other listed directorships
John has no external directorships.
Vinay Abrol
Chief Financial Officer
Appointed
Vinay joined the Board in September 2004.
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. During the period, Vinay
held the role of Chief Operating Officer and Chief Financial
Officer until 1st April 2024.
Other listed directorships
Vinay has no external directorships.
EXECUTIVE DIRECTORS
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Rebecca Shelley
Senior Independent Director
Appointed
Rebecca joined the Board in November 2021.
Committees
Member of the Nomination Committee, Audit & Risk Committee
and Remuneration Committee.
Skills & 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 listed directorships
Sabre Insurance Group Plc (Chair)
Hilton Food Group Plc
Conduit Holdings Limited
Mandy Donald
Non-executive Director: Chair of the Audit & Risk Committee
Appointed
Mandy joined the Board in October 2019.
Committees
Chair of the Audit & Risk Committee. Member of the Nomination
Committee and Remuneration Committee.
Skills & 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. Mandy spent 18 years with EY before becoming
a Non-executive Director across a wide range of companies.
Mandy’s experience from a range of Non-executive and Audit
Committee Chair roles allows her to support the Board and its
Committees on delivering the Liontrust strategy whilst providing
effective oversight and constructive challenge. 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 and Whistleblowing
champion. Mandy is also the designated workforce liaison
to the Board.
Other listed directorships
Begbies Traynor Group Plc
JP Morgan US Smaller Companies Investment Trust Plc
NON-EXECUTIVE DIRECTORS
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DETAILS OF THE BOARD’S
RESPONSIBILITIES CAN BE
FOUND ON PAGE 97
George Yeandle
Non-executive Director
Appointment
George joined the Board in January 2015.
Committees
George is a member of the Nomination Committee, Audit
and Risk Committee and Remuneration Committee. During the
period, George held the role of Chair of the Remuneration
Committee, stepping down as Chair on 1st April 2024.
Skills & 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 brings constructive challenge and
independent oversight to the Board and its Committees.
Other listed directorships
George has no other listed directorships.
Miriam Greenwood OBE DL
Non-executive Director: Chair of the Remuneration Committee
Appointments
Miriam joined the Board in November 2023.
Committees
Member of the Nomination Committee, Remuneration Committee
and Audit and Risk Committee. From the 1st of April 2024, Miriam
was appointed as the Chair of the Remuneration Committee.
Skills & Experience
Miriam has spent more than 30 years working for a number
of leading investment banks and other financial institutions and
has been a Non-executive director of a number of publicly listed
and private companies. She is an experienced Non-executive
Director and brings extensive financial services experience to
the Board. Miriam is the Chair of Aquila Energy Efficiency
Trust plc. She was the Chair of Smart Metering Systems plc
and was a member of their Remuneration Committee, having
previously held the position of Chair, and was the Chair of the
Remuneration Committee of River and Mercantile Group PLC
from May 2019 to June 2022. Miriam held senior corporate
finance and advisory roles at leading investment banks and
financial services Miriam qualified as a Barrister and holds a
law degree from Queen Mary College, University of London.
Miriam is a member of the advisory committee of the Mayor
of London’s Energy Efficiency Fund and served three terms on
the Board of OFGEM and then as a Senior Adviser. A Deputy
Lieutenant of the City of Edinburgh, Miriam was awarded an
OBE DL for services to corporate finance.
Other listed directorships
Aquila Energy Efficiency Trust Plc (Chair)
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FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT
RISK MANAGEMENT AND INTERNAL CONTROLS
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 a regular 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.
The 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 38 to 53.
GOVERNANCE FRAMEWORK – COMMITTEE
STRUCTURE AND DELEGATION OF POWERS
The Corporate Governance report on page 78 details the
Board’s and the Chief Executive Officer’s responsibilities for
organising and implementing the strategy of the Company.
The Board has delegated a number of its powers to three
subcommittees; the Audit & Risk Committee, the Nomination
Committee and the Remuneration Committee. From the 1st
of April 2024, the Board has established a Sustainability
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
Officer 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 September 2023.
The Group has set up two management committees to assist
the Chief Executive Officer and manage the affairs of the
respective limited liability partnership in accordance with
its members’ agreement. The Board regularly reviews the
ongoing work of the management committees to ensure the
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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
Liontrust Fund Partners LLP (“LFP”) has been appointed
as the authorised corporate director, AIFM or authorised
fund manager of certain collective investment schemes.
LFPPM is responsible for management and oversight of all
activities performed by LFP, including (but not limited to): all
responsibilities as a regulated firm, including ensuring the
Liontrust Funds are managed in accordance with the relevant
prospectus and the regulations; the appointment and oversight
of delegated investment managers; risk management;
consumer duty and the assessment of value; client assets;
product approval; oversight of sales and marketing activity;
fund valuation and pricing; Fund register and subscription
and redemptions; fund management operations including
the appointment and oversight of the Depository / Trustee
and any third party administrators (including transfer agency
and fund accounting); compliance with applicable laws and
regulations; financial and regulatory reporting and all other
relevant business management functions.
Liontrust Investment Partners LLP Partnership Management
Committee (“LIPPM”)
Areas of oversight
LIPPM is responsible for the management and oversight of all
activities performed by Liontrust Investment Partners LLP (“LIP”),
including (but not limited to): all responsibilities as a regulated
firm, including investment management (investment decision-
making, appointment of fund managers, investment processes
and performance); compliance with applicable laws and
regulations; securities dealing; risk management; front office
systems; data and research tools; investment compliance;
investment operations; product development; sales and
marketing activity (including promotion and distribution of
Funds); as well as all other business management activities
of the firm including human resources, finance and Information
Technology compliance.
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 Fund
Partners LLP ManCo
(FRN: 518165)
Distribution and Product
Committee
Technology Committee
Responsible Capitalism Committee
Financial Crime Prevention
Committee
Portfolio Risk Committee
Operations and Outsource
Oversight Committee
Consumer Conduct Committee
Fund Management Committee
Client Assets Committee
Liontrust Investment
Partners LLP ManCo
(FRN: 518552)
Management Committees of the FCA regulated entities
LFP sub-committees
Joint sub-committees
LIP sub-committees
Diversity, Equity and
Inclusion Committee
Health and Safety
Committee
Workforce Advisory
Forum
Liontrust Cares
Nomination Committee
Remuneration
Committee
Audit and risk
Committee
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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.
Consumer & Conduct 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.
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
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.
Financial Crime Prevention Committee
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.
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 was previously the Treating Customers Fairly Committee. From 31 July 2023, this Committee became 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.
In March 2024, the management committees reviewed the membership, remit and duties of each sub-committee and established
certain new sub-committees with effect from 1 April 2024.
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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”). The Code is
available at www.frc.org.uk.
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.
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, consider
the interests of the Company’s stakeholders, including the
workforce 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, considers the interests of stakeholders,
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 83 to 87.
DIVISION OF RESPONSIBILITIES
The division of responsibilities between the Chair, Alastair
Barbour, Senior Independent Director, Rebecca Shelley, and
the Chief Executive Officer, 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 Officer on developments and ensures that
the Chief Executive Officer 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 Officer’s main responsibilities are the
executive management of the Group, liaison with the Board
Board Leadership and Company Purpose
Annual Report Reference
Provides shareholders with information on the Company’s purpose, values and strategy, an overview of the
work undertaken by the Board to promote the long-term sustainable success of the Company and how the
Board has considered stakeholders interests
See page 78
Division of Responsibilities
Provides shareholders with information on the division of responsibilities between members of the Board and
the committees of the Board and details the effective operation of the Board
See page 78
Composition, Succession and Evaluation
Provides an overview of the Board composition, the work of the Nomination Committee which includes
succession planning and details of the Board evaluation process
See page 70 and the
Nomination Committee
Report on page 96
Audit, Risk and Internal Control
Provides a report from the Audit and Risk Committee on the work undertaken during the year to oversee the
Company’s external audit and internal audit, the integrity of the financial statements, risk management oversight
and review of the risks that the Company is willing to take to achieve its long-term strategic objectives
See the Audit and Risk
Committee Report on
page 102
Risk management and
internal controls page 75
Principal risks on page 38
Remuneration
Provides a report from the Remuneration Committee on decisions made by the Remuneration Committee and
the oversight of the Group’s remuneration practices to ensure that they are linked with the successful and
sustainable delivery of the Company’s long-term strategy
See the Remuneration
Committee Report on
page 106
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and shareholders, the development and management of
the strategy of the Group, the management of the senior
leadership team, oversight of the sales and marketing teams,
and to be an innovator and facilitator of change. The Chief
Executive Officer 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 75.
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 to, the
development of the strategy of the Company and the Group;
• 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.
In March 2024, the Board approved the establishment of
a board level Sustainability Committee. The Sustainability
Committee comprises independent Non-executive Directors
and is chaired by Rebecca Shelley, Senior Independent
Director. The Chair is not a member of this committee.
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 2024, the Board comprised seven directors:
the Chair, four independent Non-executive Directors and
two Executive Directors. As previously announced, Miriam
Greenwood was appointed as a Non-executive Director in
November 2023 and was, with effect from 1 April 2024,
appointed as the Chair of the Remuneration Committee.
George Yeandle intends to retire at the AGM in September
2024, having served nine years on the Board. At all times
throughout the relevant reporting period, at least half of the
Board, excluding the Chair, comprised independent Non-
Executive Directors.
Diversity, equity and inclusion have continued to be a key focus
for the Board and Company. At 43%, rising to 50% when
George Yeandle retires from the Board at the 2024 AGM,
the Board complies with the Hampton-Alexander Review target
of 33 per cent. female representation on the Board, and,
following Miriam Greenwood’s appointment, the FCA’s gender
representation target of 40 per cent. female representation on
the Board. The Board further complies with the FCA’s targets
that at least one senior board position is held by a woman, with
Rebecca Shelley serving as the Senior Independent Director.
The Company continues to comply with the recommendations
of the Parker Review and the FCA target that at least one Board
member should be from an ethnic minority background with
Vinay Abrol serving as the Chief Financial 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, Miriam Greenwood
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. George Yeandle intends to retire at
the AGM in September 2024, having served nine years on
the Board as at January 2024. The Board has considered this
and agreed that, in order to facilitate an orderly handover to
Miriam Greenwood as Chair of the Remuneration Committee,
it is in the best interests of the Company that George Yeandle
remain on the Board and retire at the AGM. Notwithstanding
the length of George Yeandle’s service, the Board is satisfied
that he remains independent of mind and character and
has determined that he should continue to be treated as
independent. Accordingly, the Board considers these Non-
executive Directors to be independent.
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. Meetings are usually held in person in
London.
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At each scheduled Board meeting, a report from the Chief
Executive Officer, John Ions, covering Strategy, Distribution,
Fund Performance, Fund Management and Corporate matters
and the Chief Financial Officer, Vinay Abrol, covering Finance
and Operations, 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.
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 13 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
Audit & Risk
Committee
Remuneration
Committee
Nomination
Committee
Meetings held in the year
7
6
6
6
Directors’ attendance throughout the reporting period
(Committee membership shown in brackets)
Non–Executive Directors
Alastair Barbour
(Nomination)
7/7
–
–
6/6
Mandy Donald
(ARC, Nomination, Remuneration)
7/7
6/6
6/6
6/6
Miriam Greenwood
Appointed to the Board in November 2023
(ARC, Nomination, Remuneration)
3/3
2/2
3/3
2/2
Rebecca Shelley
(ARC, Nomination, Remuneration)
7/7
6/6
6/6
6/6
George Yeandle
(ARC, Nomination, Remuneration)
7/7
6/6
6/6
6/6
Executive Directors
Vinay Abrol
(No Committees)
7/7
–
–
–
John Ions
(No Committees)
7/7
–
–
–
Ad-hoc Board
Ad-hoc Board meetings held in the reporting period
6
Non–Executive Directors
Alastair Barbour
6/6
Rebecca Shelley
6/6
Mandy Donald
5/6*
George Yeandle
6/6
Miriam Greenwood
0/0
Executive Directors
Vinay Abrol
6/6
John Ions
5/6*
*Mandy Donald and John Ions were each unable to attend one ad hoc Board meeting due to a prior engagement.
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In January 2024, the scheduled Board meeting was held
over two days, which is reflected in the table above as two
scheduled 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.
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 and Compliance
reports received by the Audit and Risk Committee. Understanding
our workforce’s views is an important element of monitoring and
assessing the Group’s culture and ensure that Liontrust’s values and
desired leadership behaviours are embedded across the Group.
The Board and Nomination Committee considered the results of
the annual employee engagement survey. Mandy Donald is the
designated workforce liaison to the Board and provides regular
updates to the Board on the activities of the workforce advisory
forum. Through these activities, the Board is able to build up a
clear view on the culture in the Group.
In 2023, John Ions announced the publication of the Liontrust
Leadership Charter at a Town Hall meeting. The Liontrust
Leadership Charter was developed by senior leaders across
the business through a series of focused externally facilitated
workshops. The Liontrust Leadership Charter sets out a combined
leadership purpose and agreed leadership behaviours under
four agreed goals: to be accessible and inclusive; to be
entrepreneurial and business focussed; to strive for excellence
and to act with fairness and integrity.
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. At the start of every Board and Committee meeting,
Directors are requested to declare any actual or potential
conflicts of interests and in the event a declaration is made,
conflicted Directors can be excluded from receiving information,
taking part in discussions, and making decisions that relate to
the potential or actual conflict.
The Group has in place a conflicts of interest policy which has
been approved by the Board.
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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. Following the
externally facilitated review in 2023, the 2024 effectiveness
review was conducted internally by the Chair supported by the
Company Secretary. An online questionnaire was drafted by
the Company Secretarial team, reviewed and agreed by the
Chair and issued to all Directors. The questionnaire includes
free text boxes to facilitate individual feedback on certain
questions. Further detail of the evaluation process is included in
the Nomination Committee Report.
The Executive Directors have been subject to a formal
performance appraisal. These appraisals were carried out in
2024 and in all cases their performance was appraised as
continuously effective. The performance of the Non-executive
Directors during the year to 31 March 2024 has been reviewed
by the Chair. The review has confirmed that the performance of
the Non-executive Directors is effective and appropriate.
APPOINTMENTS TO THE BOARD
Board appointments are overseen by the Nomination Committee.
The Nomination Committee leads the process for Board
appointments and considers the balance of skills, experience
and knowledge on the Board. It ensures that there is a formal
and rigorous process for appointments to the Board. Further
information on the activities of the Nomination Committee can
be found in the Nomination Committee Report on page 96.
INDUCTION, PROFESSIONAL
DEVELOPMENT AND TRAINING
The Company Secretary arranges a comprehensive preparation
and induction programme for all new Directors. This programme
includes meetings with the Executive Directors and members of
senior management including the Chief Compliance Officer
and Chief Risk Officer, meetings with the internal and external
auditors and meetings with the Company Secretary on the
Group’s governance framework.
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. During the review period,
the Board received in person training on cyber security, net zero
and science based targets, the Consumer Duty, SM&CR and the
Market Abuse Regime.
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.
DIRECTOR ELECTION AND RE-ELECTION
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 70 in support of each Directors re-election.
AGM
At the Company’s Annual General Meeting held in London
on 21 September 2023, all resolutions were passed with
the requisite majority. The Board welcomed the opportunity to
engage with shareholders at the AGM in person. The format of
the meeting allowed for questions from shareholders in advance
of the business of the meeting. Shareholders who were unable
to attend in person were able to submit questions to the Board
by email in advance of the meeting.
The 2024 AGM will be held in London on Thursday 19
September 2024.
SHAREHOLDER ENGAGEMENT
The Chief Executive Officer and Chief Financial Officer have
regular meetings with existing and potential new shareholders.
The views of shareholders are reported back to the Board.
The Chair and/or Senior Independent Director may meet with
shareholders at their request.
Each year, in advance of the Company’s AGM, the Company
engages with key shareholders to seek their voting intentions
and to offer further engagement with Executive and Non-
Executive Directors. In addition, 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 the Company’s published financial report and accounts
and website.
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.
Provision 10 of the Code sets out the circumstances that are
likely to impair or could appear to impair a Non-executive
Director’s independence, including where a director has served
on the Board for more than nine years from the date of their first
appointment. As highlighted above, George Yeandle’s tenure
on the Board exceeds nine years and he will retire at the AGM
in September 2024. Although there is a short period of non-
compliance with Provision 10, the explanation for this has been
detailed above and this departure from the Code will cease in
September 2024.
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SECTION 172 REPORT
Introduction
Section 172(1) of the Companies Act 2006 requires the
Directors to act in a way they consider, in good faith, would
be most likely to promote the success of the Company for
the benefit of its members as a whole, and in doing so have
regard (amongst other matters) to:
• the likely consequences of any decision in the long term;
• the interests of Company’s workforce;
• the need to foster the and the interest of its stakeholders;
• the need to foster the Company’s business relationships with
suppliers, customers and others;
• the impact of the Company’s operations on the community
and the environment;
• the desirability of the Company maintaining a reputation for
high standards of business conduct; and
• the need to act fairly as between members of the Company.
This Section 172 Statement sets out how the Directors have
discharged this duty.
The Board considers its primary stakeholders to be
shareholders, clients, members and employees, suppliers
and service providers, regulators and wider society.
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 fairly 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 sustainable success of
the business as a whole.
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 16 to 26 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 Senior Independent Director also
meets major shareholders, either alongside the Executive Directors or without their attendance
to enable more direct feedback. 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.
The Board routinely receives and reviews reports summarising shareholder interaction and
feedback thereon.
During the review period, the Company held two General Meetings in July 2023, to approve
the proposed GAM transaction and the reduction of capital, and the Company’s AGM in
September 2023 providing the opportunity for shareholders to interact directly with the Board.
Shareholders are able to email questions to the Board in advance of General Meetings and
raise questions at the General Meeting in person. Where possible, all members of the Board
attend the General Meetings and AGMs and welcome the opportunity to meet and engage
with shareholders.
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 frequently liaises, provides additional coverage.
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Clients
Our clients entrust us with the investment of
their assets. We focus on understanding our
clients’ needs and investment objectives to
deliver on our purpose – to enable investors
to enjoy a better financial future.
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 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 large scale events and include
Liontrust specific presentations, industry-wide seminars and client specific conferences.
An important element to our client engagement is via digital media, available via our website and
other platforms. 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.
The Board receives a Sales and Distribution Report and Marketing Report in each quarterly set of
Board papers. The Chief Executive Officer, John Ions, reports on client demand, sales and investment
performance at each quarterly Board meeting. The Consumer and Conduct Committee considers
complaints data, the support of vulnerable customers and the implementation of the Consumer Duty.
Mandy Donald, the Consumer Duty Champion, reports on this to the Board to ensure that there is
appropriate focus on good consumer outcomes.
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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 engage with
members and employees and is committed
to their ongoing training and development.
We seek two-way engagement throughout the firm; structured between the Board and line
managers through Board 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 a considered work-life balance, family friendly
policies, training & development plans and providing support for physical and mental wellbeing.
The Board understands the importance of ensuring members and employees feel part of the success
and development of the Group. 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. This involved three cohorts of individuals who display
leadership potential drawn from across the Liontrust business undertaking a series of externally
facilitated leadership masterclasses and workshops. During the review period, the Liontrust
Leadership Charter which articulates the desired effective and inclusive leadership behaviors has
been shared Group wide and positively received by the workforce.
We routinely encourage the provision of feedback through staff surveys. A firmwide annual
workforce engagement survey was undertaken and the results reviewed by the Nomination
Committee. The departmental results are shared with the relevant Heads of Department and HR
works with them to develop action plans to address any lower scoring results of the survey in their
department.
The Remuneration Committee includes metrics linked to diversity & inclusion within the annual
bonus consideration for the Executive Directors. 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 and inclusion.
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. Liontrust operates a Workforce Advisory Forum
to advise management of issues relating to the workforce. These forums, which have sought
representation across departments and locations met a number of times during the financial year.
Mandy Donald attends the Workforce Advisory Forum and reports on these matters to the Board.
It has been a particularly active year for the Diversity, Equity & Inclusion Committee, details of
these activities are included in the Nomination Committee Report on page 96.
The Liontrust Social Committee continues to arrange events that provide opportunities for colleagues
across the firm to engage and participate in areas of interest outside work, such as a book club,
sports participation and other interest events.
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Suppliers and Service Providers
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 fairly and
to maintain a reputation as a trusted and
reliable partner.
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 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. The Board reviews and approves Liontrust’s
Modern Slavery Statement annually.
The Company’s regulated UK subsidiaries undertake payment practice reporting and aim to pay all
undisputed invoices within 30 calendar days of receipt.
Regulators
Constructive engagement with our
regulators helps to ensure a fair financial
framework for our business and our clients.
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.
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 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 implementation of the FCA’s Consumer Duty regulation has continued to be an area of focus in the
past year. A Consumer and Conduct Committee was established and has been operating effectively
during the period. The management information it reviews is structured around the four Consumer
Duty outcomes. The Consumer and Conduct Committee considers matters related to culture, conduct
and competence, products and services, price and value, consumer understanding and consumer
support. Following the results of consumer panel testing, changes were made to Liontrust’s website
including the addition of an accessibility tool bar. A Vulnerable Customer’s Policy was implemented
during the period and work undertaken to continue to identify and support vulnerable customers.
Mandy Donald acts as the Consumer Duty Champion, attends meetings of the Consumer and
Conduct Committee and reports to the Board on Consumer Duty related matters. The Board received
training on Consumer Duty during the period.
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LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT
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 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 linked to our sustainability goals.
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.
Rebecca Shelley is the Board ESG lead and has most recently chaired Liontrust’s Responsible
Capitalism Committee. During the year, the Board has reviewed and approved near term science
based emissions reduction targets to demonstrate our commitment to reducing emissions in line
with the Paris Agreement goals. The Board further reviews and approves Liontrust’s Responsible
Capitalism Report annually.
We seek to contribute to positive societal 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 to provide a numeracy programme, Financial Football;
• 10ticks to support maths education in primary schools;
• Blackpool FC Girls’ Emerging Talent Centre; and
• ZSL London Zoo.
In 2023 the Board approved the establishment and funding of the Liontrust Foundation, a
registered charity further aiming to empower disadvantaged young children and to advance the
preservation of biodiversity.
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STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
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LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT
DIRECTORS’ REPORT
The Directors present their report and the audited consolidated financial statements of Liontrust Asset Management Plc for the
year ended 31 March 2024.
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 three operating subsidiaries as follows:
Subsidiary
% owned by
the Company
Subsidiary principal activities
Liontrust Fund Partners LLP
100%
A financial services organisation managing unit trusts and is the authorised
corporate director for Liontrust’s UK domiciled funds. It is also an Alternative
Investment Fund Manager in accordance with AIFMD. It is authorised and
regulated by the Financial Conduct Authority.
Liontrust Investment Partners LLP
100%
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.
Liontrust International (Luxembourg) S.A.1
100%
A distribution business authorised and regulated by the CSSF in Luxembourg.
1With effect from 24 May 2024 Liontrust International (Luxembourg) S.A. changed its name to Liontrust Europe S.A.
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 Portfolio Management Limited, acquired pursuant
to the acquisition of Majedie Asset Management Limited
in April 2022. Application has been made to the FCA to
surrender its regulatory permissions.
• Liontrust Investment Management Limited, acquired pursuant
to the acquisition of Neptune Investment Management
Limited in October 2019. This entity will be liquidated.
• Liontrust Advisory Services Limited and Liontrust Multi–Asset
Limited, acquired as part of the acquisition of the Architas
business and are currently being liquidated.
Results and dividends
Loss before tax was £(0.6) million (2023: £49.3 million).Adjusted
profit before tax was £67.4 million (2023: £87.1 million) after
adding back expenses including, severance compensation,
acquisitions related costs, professional services (restructuring,
acquisition related and other) and intangible asset amortisation
and impairment, and is reconciled to profit before tax in note 7
to the financial statements.
The Directors declare a second interim dividend of 50 pence
per share (2023: 50 pence per share). This results in total
dividends of 72 pence per share for the financial year ending
31 March 2024 (2023: 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 Officer’s report and
Strategic Report on page 12 and 14 to 16 respectively.
Directors
The Directors of the Company during the year and up to
the date of the signing of the financial statements were as
follows:
Vinay Abrol
Alastair Barbour
Mandy Donald
John Ions
Miriam Greenwood (Appointed on 16 November 2023)
Rebecca Shelley
George Yeandle
Their interests in the share capital of the Company at 31 March
2024 are set out in the Remuneration report on page 106.
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LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
All the information cross referenced above is incorporated by
reference into this Directors’ Report.
DTR 7.2 Structure of capital and voting rights
As at 31 March 2024, 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 19 September 2024 are set
out in the Notice of Annual General Meeting.
To be valid, the appointment of a proxy to vote at a general
meeting must be received not less than 48 hours before the
time appointed for holding the meeting. None of the ordinary
shares carries any special rights with regard to control of the
Company.
Authority to purchase own shares
Under Resolution 16 of the Annual General Meeting held
on 21 September 2023, 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
21 December 2024 (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.
There have been no share buybacks during the period. The
Company does not hold any shares in treasury.
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
Location
Interest capitalised
Not applicable
Shareholder waiver of dividends
Note 23
Shareholder waiver of future dividends
Note 23
Agreements with controlling shareholders
Not applicable
Provision of services by a controlling shareholder
Not applicable
Details of any significant contracts entered into by the Company or a
subsidiary undertaking and (i) in which a Director is or was materially
interested (ii) a controlling shareholder
Not applicable
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
Not applicable
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
Corporate Governance code and practices applied DTR 7.2.2 DTR7.2.3
Corporate Governance Report
Main features of the internal control and risk management systems DTR 7.2.5
Risk Management and Internal Controls report
Significant shareholders, rights, voting, appointment of directors, significant
agreements DTR 7.2.6
Corporate Governance report; Directors’ Report
Administrative, Management and Supervisory Bodies and their Committees
DTR 7.2.7
Risk Management and Internal Controls Report
Administrative, Management and Supervisory Bodies and their Committees
DTR 7.2.7
Risk Management and Internal Controls Report
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LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT
Shares held in an employee benefit trust
The Liontrust Asset Management Employee Trust (the “EBT”) owns 1,027,873 shares in the Company as at 31 March 2024.
Dividends on these shares are waived by the trustee of the EBT.
Substantial shareholders
As at 31 March 2024, 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 2024
Name
Number of shares held
Percentage of issued share capital
Hargreaves Lansdown, stockbrokers
5,155,053
7.94
TFG Asset Management UK LLP*
3,295,280
5.07
abrdn
3,169,700
4.88
Vanguard Group
2,643,414
4.07
Canaccord Genuity Wealth Management
2,498,629
3.85
Blackrock
2,466,899
3.80
Slater Investments
2,431,551
3.74
Sanford Deland Asset Management
2,340,000
3.60
Martin Currie Investment Management
2,250,000
3.46
SEB as principal
1,977,445
3.05
*As per the notification received on 20 September 2023, TFG Asset Management UK LLP holds contracts for difference.
As at 31 May 2024 (being the latest practicable date prior to the publication of this document), 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 May 2024
Name
Number of shares held
Percentage of issued share capital
Hargreaves Lansdown, stockbrokers
5,018,542
7.73
TFG Asset Management UK LLP*
3,295,280
5.07
abrdn
3,232,278
4.98
Canaccord Genuity Wealth Management
3,008,779
4.63
Vanguard Group
2,664,512
4.10
Blackrock
2,466,598
3.80
Slater Investments
2,420,794
3.73
Martin Currie Investment Management
2,250,000
3.46
Sanford Deland Asset Management
2,120,000
3.26
*As per the notification received on 20 September 2023, TFG Asset Management UK LLP holds contracts for difference.
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STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
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 78 to
87, 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 38 to 53 and a
report on the risk management and internal controls appear
on pages 75 to 77.
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.
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
62 to 66. This report includes environmental performance
data, including Scope 1, Scope 2 and Scope 3 greenhouse
gas (GHG) emissions data and the Company’s TCFD Report.
The Company does not maintain a corporate jet and does
not routinely use private jets for business travel.
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.
Information on the consideration of stakeholder interests is set
out in the Section 172 statement on page 83 to 87.
EMPLOYEES
Details of the Company’s employment practices, including
diversity and employee engagement can be found in the
Strategic Report on pages 54 to 55.
FINANCIAL INSTRUMENTS
The Group’s financial instruments at 31 March 2024
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.
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
yet billed or due for payment. They are initially recognised at
fair value and subsequently held at amortised cost.
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.
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FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT
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 is not subject to any significant liquidity risk.
Full details of the Group’s financial risk management can be
found in note 2 on page 158 to 162.
ANNUAL GENERAL MEETING
The Annual General Meeting of the Company will be held
in the Prince Philip and Queen Elizabeth II room at the Royal
Society for the Arts (RSA), 8 John Adam Street, London,
WC2N 6EZ on 19 September 2024 at 2.00 p.m.
A notice convening this meeting will be sent to shareholders in
August 2024. All resolutions are voted on separately and the
final voting results will be published as soon as practicable
after the meeting.
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 and voting rights are set
out in this report.
• Details of substantial shareholders in the Company are listed
on page 91.
• The rules concerning the appointment and replacement
of Directors are contained in the Company’s articles of
association and are described on page 98.
• 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.
• There are no agreements between the Company and its
Directors concerning compensation for loss of office as at
31 March 2024.
BASIS OF FINANCIAL STATEMENTS
Having given consideration to 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. So far as the
Directors are aware, there is no relevant audit information of
which the auditor is not aware. The Directors have taken all
reasonable steps to make themselves aware of any relevant
audit information and to establish that the auditor is aware of
such information. Further details of the activities of the Audit
and Risk Committee can be found on pages 102 to 105.
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 2024 Annual General Meeting.
POLITICAL DONATIONS
The Group made no political donations or contributions
during the year. (2023: £nil).
By order of the Board
Sally Buckmaster
General Counsel & Company Secretary
25 June 2024
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STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
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.
The directors are responsible 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 (“DTR”) 4.1.16R, the financial statements will form part of
the annual financial report prepared under DTR 4.1.17R and
4.1.18R. The auditor’s report on these financial statements
provides no assurance over whether the annual financial report
has been prepared in accordance with those requirements.
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.
By order of the Board
Vinay Abrol
Chief Financial Officer
25 June 2024
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STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
NOMINATION COMMITTEE REPORT
Dear shareholder,
INTRODUCTION BY THE CHAIR OF
THE NOMINATION COMMITTEE
On behalf of the Nomination Committee (the “Committee”), I am
pleased to present our report for the financial year ended 31
March 2024. This report is intended to provide a summary of
the Committee’s principal duties and key activities during the year.
BOARD SUCCESSION
A key focus of the Committee when considering matters of
Board succession has been ensuring that new appointments are
the right cultural fit for the Board and Company. To this end, we
have followed a careful and diligent selection process when
recruiting members of the Board. This includes the consideration
of the balance of skills, knowledge, experience and diversity on
the Board, the appointment of a carefully selected independent
executive search firm, the development of a detailed role
specification and multiple interviews with candidates during the
selection process. We prioritise finding the right cultural fit and
the right person over the speed of appointment.
During the year, the Committee has overseen the recruitment
of Miriam Greenwood OBE DL, who was appointed to the
Board in November 2023. Miriam has a wealth of experience
and knowledge in financial services and listed companies, with
recent relevant experience chairing the remuneration committee
of a UK listed asset manager. Following Miriam’s successful
induction on to the Board and its Committees, Miriam has been
appointed as Chair of the Remuneration Committee with effect
from 1 April 2024.
George Yeandle, who chaired the Remuneration Committee
during the financial year, intends to retire from the Board at
the 2024 AGM. On behalf of the Committee and the Board,
we would like to thank George for his diligent service to the
Company and its stakeholders, and his outstanding leadership
of the Committee.
As noted in my last report to you, we have commenced the
recruitment process for the selection of my successor as Chair
of the Board. As you would anticipate, the recruitment process
is being led by Rebecca Shelley, our Senior Independent
Director. As noted above the abiding principle we follow is
ensuring that we find the right person who is the right cultural
fit for the Board and Company. The recruitment process for my
successor is progressing well. Further detail of this is set out in
the report below.
DIVERSITY, EQUITY AND INCLUSION
Liontrust is committed to building a workplace that fosters
diversity, equity and inclusion (“DE&I”) for our staff. Achieving
DE&I is an ongoing objective and one that requires continual
work and reflection to achieve. The Committee considers both
the diversity of the Board and that of our workforce.
On matters of Board diversity, I am pleased to report that
Liontrust complies both with the Hampton-Alexander Review
recommendations on Board gender and ethnic diversity and,
following Miriam’s appointment, the FCA’s Listing Rule targets on
Board gender and ethnic diversity.
Our commitment to DE&I is mirrored in our actions. I am pleased
to report that Liontrust’s Diversity, Equity and Inclusion Committee
(the “DE&I Committee”) now reports to this Committee. Liontrust’s
DE&I Committee is chaired by our CFO, Vinay Abrol, and its
membership is drawn from across our workforce, providing a
rich vein of diverse and talented members to help us to continue
to evolve and develop in this important area. Following the
development of a diversity, equity and inclusion strategy by
the DE&I Committee, the Committee approved Liontrust’s 2024
Diversity, Equity and Inclusion Strategy. The DE&I Committee also
works closely with our Responsible Capitalism team, headed by
Cindy Rose, to ensure a consistent approach to DE&I. A report
on the activities of our DE&I is included in the report below.
OUR PEOPLE
Liontrust’s key assets are our people. We pride ourselves on the
quality of our people’s knowledge and ability and therefore their
positive impact on our clients and stakeholders. Accordingly,
a principal area of focus for the Committee is on our people.
At each meeting of the Committee, the Committee receives a
People Report from our Head of HR, Louise Dilworth, which
includes relevant data on diversity and staff turnover. During
the year, the Committee has overseen senior management
succession planning, reviewed the implementation of the
Liontrust Leadership Charter and considered the results of 2023
Employment Engagement Survey.
THE YEAR AHEAD
The Committee will continue to focus on the recruitment of
my successor, support and champion the work of our DE&I
Committee and on matters related to our people.
Alastair Barbour
Chair of the Nomination Committee
25 June 2024
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KEY RESPONSIBILITIES
The Committee’s key responsibilities are to:
• Keep the composition of the Board and its Committees under
review to ensure a correct balance of skills, knowledge,
experience and diversity is in place.
• Lead the search and selection process for new Board
appointments, including identifying the skills and experience
required.
• Oversee succession planning for Directors and senior
executives and the development of a diverse pipeline
for succession, taking into account the challenges and
opportunities facing the company, and what skills, diversity
and expertise are therefore needed on the Board in the future.
• Review and consider matters related to employee
engagement, talent management and the training and
development of the staff in the Group.
• Undertake annually an assessment of the Board’s
performance, review the results of the evaluation and
oversee the implementation of any necessary actions.
The terms of reference of the Committee, which set out 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. The terms of reference of the Committee were most
recently reviewed by the Committee and updated in July 2023.
COMMITTEE COMPOSITION AND ATTENDANCE
The Committee is comprised solely of the Non-executive
Directors listed below:
• Alastair Barbour (Chair)
• Mandy Donald
• Miriam Greenwood (appointed 16 November 2023)
• Rebecca Shelley
• George Yeandle.
In accordance with the Code, the majority of the members
of the Committee are independent Non-executive Directors.
The Executive Directors and Head of HR attend Committee
meetings by invitation. The Committee is empowered to appoint
independent executive search consultants and seek legal advice
where it sees fit to assist with its work.
No individual Committee member participates in the decision-
making when the matter under consideration relates to him or her.
The Committee met six times during the year. The Committee
members’ attendance is detailed on page 80.
KEY ACTIVITIES DURING THE YEAR
During the financial year to 31 March 2024, the activities of
the Committee included:
• Commenced and managed the search process for the
recruitment of an additional Non-executive Director to succeed
George Yeandle as the Chair of the Remuneration Committee.
• Led by Rebecca Shelley, the Senior Independent Director,
commenced the recruitment process for the selection of the
successor to the Chair.
• The review of the composition of the Board and its
committees and the skills, knowledge and experience of the
Board, which included a detailed skills matrix analysis.
• The review of the Non-executive Directors’ external
appointments and time commitments.
• Succession planning across senior management, Heads
of Department and investment teams across the Group,
which included talent development planning and DE&I
considerations.
• The Liontrust Leadership Charter and the Liontrust Leadership
Training Programme, which included the approach to
embedding the Liontrust Leadership Charter across the Group.
• Oversight of Liontrust’s staff training and development,
which included training on mental health awareness, career
development and diversity and inclusion for managers and
staff.
• Oversight of matters relating to Liontrust’s staff, including staff
engagement, internal communications and staff wellbeing.
• DE&I matters, including the review and approval of
Liontrust’s 2024 DE&I Strategy, the review of DE&I data of
the workforce, consideration of the diversity of the Board
and senior management and the review and approval of a
number of key DE&I policies.
• The annual evaluation of performance of the Board, its
committees, the Chair and the Directors.
Further detail of certain activities of the Committee is set out below.
BOARD AND COMMITTEE COMPOSITION
The Committee reviewed the composition of the Board and its
committees during the year and considered the optimal Board
size for a company of the size and complexity of Liontrust. This
included the consideration of the tenure of Board members,
succession planning, diversity and skills and expertise. As
part of this review, the Committee considered a detailed skills
analysis matrix. The Committee further considered the relevant
governance requirements and best practice. The Committee
concluded that the Board’s current composition was appropriate
in light of the planned recruitment activity. The Committee agreed
that the skills and experience and Board composition would be
reviewed annually in accordance with the requirements of the
Code and governance best practice.
APPOINTMENT OF MIRIAM GREENWOOD
As noted in the Committee’s 2023 Report, George Yeandle
intends to retire at the 2024 AGM. The Committee led the
process for the recruitment of an additional independent Non-
executive Director to succeed George as the Chair of the
Remuneration Committee.
The Committee reviewed and approved a detailed role
specification, which included the requirement for the candidate
to have recently served on a remuneration committee, listed
Board experience and have relevant financial services
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experience. Diversity has also been a key consideration in the
recruitment process, albeit that the prerequisite for any proposed
Board appointment is that the proposed director must have the
skills, experience and character to contribute to the effectiveness
of the Board and the long-term success of the Company.
The Committee appointed Teneo to assist with the recruitment
process. As required by the Code, Teneo is an independent
executive search firm and other than providing recruitment
services, Teneo does not have any connection with the Group
which would affect its independence.
Teneo prepared a long-list of candidates based on the
role specification which were reviewed by members of the
Committee and Board. Following this review, a short list of
candidates most suited to the role was prepared and a series
of interviews arranged with the members of the Committee and
the Executive Directors. The feedback from this process and the
review of references was then considered by the Committee. The
process led to the unanimous conclusion by the Committee to
recommend the appointment of Miriam Greenwood to the Board
in November 2023 and to succeed George Yeandle as Chair
of the Remuneration Committee with effect from 1 April 2024.
CHAIR SUCCESSION
Cognisant of the Code’s recommendations relating to the tenure
of the Chair, the Committee, led by Rebecca Shelley, Senior
Independent Director, in November 2023 commenced the
recruitment process for the selection of the successor to the Chair.
The Committee reviewed and approved a detailed role
specification, which included the requirement for the candidate
to have recently served as the chair, Senior Independent
Director or chair of a committee on a publicly listed company,
experience of corporate activity, a good appreciation of the
evolving regulatory environment and strong financial acumen
and risk management experience.
In December 2023, after a “request for proposal” process where
four executive search firms were asked to submit proposals for
our Chair succession search, the Committee appointed Lygon
Group to assist it with the recruitment process. As required by
the Code, Lygon Group is an independent executive search
firm and other than providing recruitment services, Lygon Group
does not have any connection with the Group which would
affect its independence.
Lygon Group prepared a list of potential candidates based
on the role specification which was reduced to a long-list of
candidates, which in turn was reviewed by members of the
Committee and Board. The Chair of the Committee and the
Board recused himself from the review. Following this review,
a short list of candidates most suited to the role was prepared
and a series of interviews arranged with the members of the
Committee and the Executive Directors. Interviews commenced
in April 2024 and are ongoing. A further update on progress
will be made in due course.
TIME COMMITMENT
The Committee keeps under review each Director’s external
appointments to ensure they have sufficient time to dedicate to
their duties. Neither of the Executive Directors have significant
external appointment and do not serve on the boards of other
listed companies. When reviewing external appointments,
consideration is given to the duties of the proposed position –
including appointment to committees or chairing a committee.
Any significant new appointments are required to be approved
in advance by the Committee. The Committee is satisfied that all
Directors have sufficient time to dedicate to their duties and have
clearly demonstrated this throughout the year.
BOARD AND COMMITTEE EVALUATION
In line with the Code, the Board undertakes a formal evaluation
of its and its committees performance annually. For the past four
years, the Board has undertaken an externally facilitated Board
effectiveness and performance evaluation. In light of this and
the recent appointment of Miriam Greenwood, the Committee
decided to undertake an internally facilitated review of Board
effectiveness and performance. The Committee will consider
undertaking an externally facilitated Board effectives and
performance review in 2025.
The process followed for the Board’s evaluation is:
• Tailored questionnaires are developed for the Board and its
Committees by the Company Secretarial team and agreed
with the Chair.
• Questionnaires, which include free text boxes, are circulated
to the Board for completion digitally.
• The results are then compiled and reviewed by the Chair.
• The Chair discusses the outcome with the Board, focussing
on the themes raised in the evaluation.
• The Chair may hold meetings with individual Directors where
required to discuss the results of the evaluation.
• The outcome of the evaluation is then considered by the
Committee and the actions are then agreed.
2024 BOARD EVALUATION
The Board scored collaboration highly and reported that the
Board is more cohesive. The culture at Liontrust and ‘tone from
the top’ is described as constructive, supportive, inclusive,
performance driven, ambitious and consumer focussed.
Directors, both the Non-executive Directors and Executive
Directors alike, identified similar challenges for Liontrust relating
to stemming outflows, expanding distribution and growing the
business organically in difficult market and macroeconomic
conditions. The Chair and Senior Independent Director received
excellent feedback.
The key recommendations from the performance review are:
• Continued focus on succession planning for key members of
senior management, ensuring that there is sufficient time allocated
to talent development and the milestones for their achievement.
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• Continued focus on the timely resolution of people matters
and changes to roles and the staff target operating model.
• With respect to stakeholder engagement, maintain a close
focus on the Consumer Duty and increased management
information on the feedback from customers.
Following the outcome and evaluation of the Board and
Committee performance review, the Committee concluded that
each Director had engaged appropriately with the evaluation
process and that the Board and its Committees had operated
effectively during the period under review.
DIVERSITY, EQUITY AND INCLUSION
The Committee recognises that diversity in the Board helps to
improve effective decision-making processes, allowing for a
broader range of perspectives and experiences to be considered.
Diversity takes many forms and as such the Committee is
cognisant that a combination of skills and experience, gender,
age, ethnicity and educational background on the Board is
important in providing a range of perspectives and challenge
needed to support good decision making. As noted by the FRC,
“diversity is a long-term, multi-stranded journey where progress
in one area is not a guarantee of progress in another”.
Following the appointment of Miriam Greenwood, Liontrust meets
the diversity targets set out in the FCA’s Listing Rules. Rebecca
Shelley serves as Senior Independent Director, Vinay Abrol serves
as the Chief Financial Officer and three of seven (42%) Directors
are women. Liontrust continues to meet the recommendations of
the Hampton Alexander Review on Board gender diversity and
the Parker Review recommendations on ensuring that at least one
Board member is from an ethnic minority background.
During the year, the Committee has continued to support and
champion the activities of the DE&I Committee. The DE&I
Committee now reports to the Committee allowing for enhanced
oversight and support. Membership of the DE&I Committee is
drawn from across the workforce and the DE&I Committee is
chaired by Vinay Abrol. The Committee also recently approved
Liontrust’s 2024 DE&I Strategy. A report on the activities of the DE&I
Committee is set out below highlighting Liontrust’s commitment to
fostering an inclusive and equitable workplace and reflects the
progress made in embedding DE&I across the Group.
REPORT FROM THE DE&I COMMITTEE
In 2021, Liontrust Asset Management took a significant step
forward in its commitment to DE&I by establishing the DE&I
Committee. The DE&I Committee engages Liontrust staff
through arranging training, activities & events and internal
communications on DE&I initiatives and themes throughout the
year. Its mandate encompasses a range of vital areas including
the prevention and elimination of discrimination, raising
awareness of DE&I benefits, ensuring DE&I-promoting policies
and procedures, and attracting diverse talent to Liontrust and the
broader asset management industry.
This year, under the guidance of the DE&I Committee, we
have made substantial progress in embedding DE&I across the
Group. Our initiatives, detailed below, reflect our deepening
commitment to fostering an inclusive and equitable workplace,
and driving meaningful change both within our organisation
and in the communities we serve.
MENTAL HEALTH
At Liontrust, we firmly believe in the critical importance of mental
well-being as an integral component of overall health and
productivity. This belief underpins our comprehensive approach to
mental health, which encompasses a range of initiatives designed
to support our employees’ mental and emotional well-being.
In addition to ‘Liontrust does lunch’ and the emphasis on regular
breaks, including our flexible dress code policy, we also
conducted managerial training focused on mental health. This
training was crucial in equipping our leaders with the skills and
knowledge to support their teams effectively, recognising the signs
of mental health issues, and fostering a supportive environment.
Our company-wide webinar on mental health awareness further
highlighted our commitment to educating and engaging our
entire workforce on this vital topic. By providing accessible and
informative content, we aimed to destigmatise mental health
issues and encourage open dialogue within the workplace.
During Mental Health Awareness Week, we disseminated
targeted mental health content and support, reinforcing our
message that mental health is a priority year-round, not just
during designated awareness periods.
Our commitment to mental health is rooted in the recognition that
a healthy mind is essential for creativity, decision-making, and
resilience. It’s about more than reducing absenteeism; it’s about
enhancing the quality of our working life. In a high-performance
environment like ours, ensuring mental wellness is not just a duty
but a strategic imperative that directly impacts our overall success.
DE&I AMBASSADORS
The introduction of the DE&I Ambassadors Programme in
2024 is a pivotal advancement in Liontrust’s DE&I strategy.
This programme, embodying our core values, represents our
firm belief that effective advocacy and support for DE&I are
fundamental to creating a truly inclusive and dynamic workplace.
These Ambassadors, trained across all DE&I dimensions, are not
just representatives; they are the embodiment of our commitment
to fostering a culture where every voice is heard and valued.
At Liontrust, we understand that the success of DE&I initiatives
hinges on active participation and visible advocacy within
the organisation. The Ambassadors act as catalysts for this,
ensuring that DE&I is not just a policy but a lived experience.
They play a crucial role in promoting understanding, facilitating
conversations, and providing guidance on DE&I matters. This
hands-on approach is instrumental in embedding DE&I principles
into the everyday fabric of our firm.
PRIDE
Liontrust’s celebration of Pride Month was a vibrant testament to
our commitment to creating an inclusive and productive work
environment. Our events, notably the Coffee Morning/Bake
Off, provided an opportunity for staff to come together in a
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spirit of camaraderie and support for the LGBTQ+ community.
These initiatives were not just about celebrating Pride; they
played a crucial role in commemorating historical milestones
and fostering an organisational culture that values acceptance
and understanding.
Such activities align with Liontrust’s strategic objective to create
a diverse and inclusive workplace. By celebrating LGBTQ+
inclusivity, we not only honour the diversity within our community
but also demonstrate our commitment to being a
progressive and socially responsible organisation.
This is essential for attracting and retaining a broad
talent pool, and it enhances our reputation as a
firm that truly values and embraces diversity in all
its forms.
BLACK HISTORY MONTH
In October, Liontrust Asset Management proudly
observed Black History Month, aligning with this year’s
theme, “Saluting Our Sisters.” As part of our observance,
we were honoured to host Baroness Floella Benjamin, DBE,
as our keynote speaker. Her inspiring talk not only chronicled
her remarkable journey to success but also illuminated the
profound impact that she and other Black British women have
had on British society.
In addition to this enlightening keynote address, we also organised
a Black History Month film club. This event provided our staff with
an opportunity to engage with and reflect upon significant aspects
of Black history and culture through cinema. The film club, alongside
Baroness Benjamin’s presentation, formed a comprehensive
programme that deepened our understanding and appreciation of
the contributions of Black British women to our society.
Baroness Benjamin’s presence, combined with the thoughtful
selection of films, was more than a celebration of Black history;
these events were integral to our ongoing commitment to
recognising and understanding the diverse experiences and
contributions of all communities. Her story of resilience and
achievement, together with the narratives explored in the film
club, offered profound insights and inspiration to our employees.
These events were key opportunities for all to gain a deeper
appreciation of the cultural and societal contributions of Black
British women, enhancing our understanding of diversity and its
significance in the fabric of British society.
We firmly believe in the power of representation and the
importance of acknowledging and learning from diverse
historical narratives. By spotlighting the achievements of Black
British women and exploring their stories through various
mediums, we not only honour their legacy but also reinforce our
commitment to promoting an inclusive and informed workplace.
Such events are pivotal in our journey towards a more inclusive
culture, where diversity is not only recognised but celebrated as
a key driver of our collective progress and success.
INTERNATIONAL WOMEN’S DAY CELEBRATIONS
March 2024 marked a significant celebration of International
Women’s Day (IWD) at Liontrust Asset Management, aligning
with our enduring commitment to Diversity, Equity, and Inclusion.
This year’s theme, “Inspire Inclusion,” underscored the global
call to action for accelerating gender equality and celebrated
the myriad achievements of women. At Liontrust, recognising
and supporting women’s contributions across all sectors of
our business is integral to our ethos, enhancing our innovative
capacity and mirroring the diversity of the markets we serve.
ENGAGEMENT AND EMPOWERMENT ACTIVITIES
The month-long celebration began with an IWD Coffee and
Sweet Treats Morning, an informal gathering designed to
foster networking and solidarity among colleagues. This event
served not just as a social get-together but also as a platform
for initiating meaningful conversations on gender equality and
inclusion, reflecting our commitment to creating a supportive
work environment for all.
A panel discussion titled “Inspire Inclusion” further deepened
this dialogue, featuring influential women leaders who shared
insights on creating inclusive workplaces. This was followed by
a networking event, enabling participants to build connections
that support professional growth and personal development.
These interactions are vital in promoting an organisational
culture that values and implements the principles of equity and
inclusivity.
EDUCATIONAL INITIATIVES
In an effort to address unconscious biases and promote a more
inclusive culture, we hosted the “Inclusion for All” webinar.
The session equipped employees with actionable strategies to
enhance inclusivity at every level of our operations, ensuring that
Liontrust’s policies and practices reflect our commitment to equality.
IMPACT AND IMPORTANCE
By hosting these events, Liontrust not only celebrated IWD but
also actively contributed to the broader movement towards a
more equitable society. The discussions and activities of IWD
have a ripple effect, influencing our policies, enhancing our
workplace culture, and fostering a deeper understanding among
all employees of the challenges and opportunities related to
gender equality.
Celebrating IWD is crucial for Liontrust as it aligns with our
strategic objectives to attract and retain a diverse workforce
and to foster an inclusive environment where every employee
can thrive. The success of these initiatives demonstrates our
proactive approach in leading by example within the asset
management industry, showcasing our commitment to building
a workplace where difference is not only accepted but valued
and celebrated.
CONCLUSION
The past year has been one of marked progress and
development in our DE&I endeavours. The initiatives and the
dedicated work of the DE&I Committee has been instrumental
in reinforcing our commitment to an inclusive and diverse
workplace, aligning with our business objectives and values.
We remain dedicated to advancing these principles, firmly
believing in their transformative impact on our people, our
clients, and the broader community.
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AUDIT & RISK COMMITTEE REPORT
Introduction by the Chair of the Audit & Risk Committee
Dear shareholder,
INTRODUCTION
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 2024. This report is
intended to provide a summary of the Committee’s principal
duties and key activities during the year.
COMMITTEE’S ACTIVTIES
The Committee has had a full agenda, undertaking the
Committee’s core responsibilities, as well as overseeing a
number of ad-hoc items.
The Committee continues to focus on assisting the Board in
its presentation of the Group’s financial results. Other key
responsibilities include: continuing to review the effectiveness
of the Group’s system of internal controls and risk management
framework, monitoring and periodically reviewing the Group’s
procedures and ensuring compliance with all regulatory and
financial reporting requirements. The Committee also assesses
the quality of audit undertaken by the external auditors,
monitors the effectiveness of internal audit and reviews the
independence and objectivity of the external auditors.
The Committee maintains an effective and open relationship
with the Group’s external auditors, enhancing the oversight,
reporting and challenge the Committee undertakes.
TERMS OF REFERENCE AND COMMITTEE MEMBERSHIP
The terms of reference of the Committee explain its role
and the authority delegated to it by the Board of Directors.
The terms of reference are reviewed annually, with the last
review undertaken in January 2024. The Committee’s terms of
reference are published on the Company’s website and are
available upon request from the Group Company Secretary.
All members of the Committee are independent Non-Executive
Directors and the Committee welcomed Miriam Greenwood as
a new member of the Committee following her appointment to
the Board in November 2023. As Chair, I extend Committee
meeting invitations to non-Committee members throughout the
year. Active participation from all meeting attendees allows
for informative discussions and ensures individuals can raise
any concerns they may have with the Committee. Further
details in relation to Committee membership can be found
below in ‘composition and attendance’. The Committee also
meets privately, if required.
The Committee annually reviews its remit and effectiveness.
Following the externally facilitated review in 2021, the 2023
review was conducted internally, on behalf of the Board, by
the Group Company Secretary. The review concluded that
the Committee continued to operate effectively during the
reporting period with no material issues or concerns raised.
The Committee continues to meet the requirements of the Code
and FRC Financial Reporting standards. The Board believes the
Committee members have the necessary range of financial, risk,
control and commercial expertise required to provide effective
challenge to management as well as appropriate recent and
relevant financial experience. Details of the Committee members’
profiles are set out in full in the Board members’ biographies. The
Committee is a dynamic forum which benefits from a transparent
and effective engagement with management, enabling effective
discussions and decision making.
SHAREHOLDER ENGAGEMENT
Whilst no shareholders have requested specific matters to be
addressed by the Committee, maintaining an open relationship
with shareholders remains a commitment of the Committee.
INTERACTION WITH THE BOARD
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.
AUDITOR ENGAGEMENT
The Committee is satisfied that the external auditors challenge
management’s assumptions, notably in areas of judgement
such as the review of the impairment of intangible assets and
goodwill and the definition and clarity of APMs. These areas
are reported to the Committee and reviewed appropriately.
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. Mindful of the
Committee’s risk oversight responsibilities, the Committee also
works closely with the Internal Auditor to determine its annual
audit programme, approves the programme and reviews the
audit reports undertaken.
WHISTLEBLOWING
I am pleased to report that the Committee approved the
appointment of an externally facilitated whistleblowing hotline
during the review period and I have been appointed as the
whistleblowing champion.
RISK MANAGEMENT FRAMEWORK
AND INTERNAL CONTROLS
The Committee will continue to develop and enhance its
oversight of the Company’s risk management and internal
control framework as it looks ahead to the implementation of
Provision 29 of the updated 2024 Code. We are confident
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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 framework. 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 ICARA to fulfil its regulatory obligations
under the Capital Requirements Directive, SRI Risk Profile
Report and assess whether the Pillar 2 assessments and IFPR
disclosures remain appropriate;
• monitor and periodically review the Group’s procedures for
ensuring compliance with regulatory and financial reporting
requirements, including relationships with the relevant
regulatory authorities;
• review the Group’s arrangements for the deterrence,
detection, prevention and investigation of financial crime,
including whistleblowing 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.
Composition and attendance
The Committee is comprised solely of Non-executive Directors
• Mandy Donald
• Rebecca Shelley
• George Yeandle
• Miriam Greenwood OBE DL (appointed 16 November 2023).
The attendance record of members of the Committee during
the year is shown on page 80.
The Committee as a whole is 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.
The Chief Financial Officer, Chief Compliance Officer, Head
of Finance and Chief Risk Officer were regular attendees at the
Committee meetings and report 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 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, although no external advice was
required during the year.
During the financial year to 31 March 2024 and up to the
date of this report, the Committee met seven times and its
activities, amongst other things, covered the following matters:
Financial Reporting
• Reviewing the annual financial statements for the year
ended 31 March 2023 and 2024 and half year financial
statements for the six months to 30 September 2023 with
particular emphasis on their fair presentation, challenging
the reasonableness of management’s judgements made,
notably review of the impairment of intangible assets and
goodwill. There were no significant issues identified during
the period in relation to the financial statements.
• Review the appropriateness of the accounting policies used
in drawing up the Group’s financial statements
• Review and challenge of the Alternative Performance
Measures used by management in the 31 March 2024
financial statements. During the year the Committee
challenged management on the definitions of the Alternative
Performance Measures. Management reviewed and revised
the definitions to provide more clarity for the users of the
Financial Statements.
• Consideration of the Group’s taxation and insurance
requirements.
that we can build on the existing oversight activities undertaken
to ensure compliance in 2026.
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 19 September 2024.
Mandy Donald
Chair of the Audit & Risk Committee
25 June 2024
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• Review and discussion of regular reports on financial
reporting, key risks, compliance, CASS and financial crime
from the Head of Finance, Chief Risk Officer and Chief
Compliance Officer respectively.
• 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.
• Considers the accounting for 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
• Considered and recommended to the Board that the certain
subsidiaries take the parental guarantee in lieu of an audit
for certain subsidiaries.
Risk
• Review of the Group’s governance, risk framework, risk
management, risk management processes and related
policies.
• Approval of the Risk Charter and Enterprise Risk Management
framework.
• Review and approval of the Group’s ICARA.
• Review and approval of the Group’s AAF report
Governance
• Review of the Group’s compliance monitoring programme,
including the compliance manual.
• Review of the Group’s annual anti-money laundering report.
• Review of the Committee’s terms of reference.
Whistleblowing
• Approval of whistle blowing arrangements and appointment
of Mandy Donald as the whistleblowing Champion.
External Audit
• Consideration of the external auditors’ report on the
financial year ending 31 March 2023 and 2024 audit
and discussion of their findings with them.
• Review and consideration of the external auditors’ reports
on Client Money & Assets.
• Reviewed and discussed the findings of 12 internal audit
reports, ensuring appropriate follow up by management of
points raised.
• Approval of the external audit plan for 2024.
• 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.
Internal Audit
• Review of the internal audit plan in the context of the
Company’s overall risk management programme detailed
above.
ESG
• Review of ESG reporting and metrics. The Committee
discussed the impact of climate on the audit with the auditors.
Significant accounting matters
Acquisitions and 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.
Goodwill and Intangible assets 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
and goodwill 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. Subsequently, management
retested the value of these intangible assets at 30 September
2023 resulting in impairments on Majedie intangible and
goodwill and Architas intangible assets. Additionally, these
assets were retested on 31 March 2024 resulting in a further
impairment on the Majedie intangible asset and goodwill. The
Committee considered management’s assessments and the
views of the external auditors and are satisfied that the correct
accounting treatment has been followed.
Review of Audit Effectiveness
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 2028/9. The
Committee has considered the FRCs Audit Quality Inspection
and Supervision Report for KPMG LLP for 2023. The contents
of the report were discussed with the audit partner.
The Committee has considered the effectiveness of the external
audit process throughout the year and included the activities
and steps detailed below.
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Each year the auditors present to the Committee the proposed
scope of their full year audit plan, including their assessmen
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 2024 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 2024 Annual General
Meeting for the reappointment of KPMG as external auditors.
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 Committee and is reviewed annually.
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 two-step 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 auditor’s 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 several occasions,
engaged as advisers. The services provided related to the
regulatory CASS (client money) audits, interim review, ESG
disclosures assurance, work related to the merger and closure
of authorised investment funds and reporting accountant work
related to a potential acquisition including the potential GAM
acquisition. 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.
Internal Auditors
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 an
appropriately resourced and competent external firm are
appointed as Internal auditors. The Committee ensures the
externally appointed firm are 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: Operational Risk Management Framework,
Assessment of Value, Environment, Social and Governance,
Corporate Governance Framework, Conduct and Culture,
Portfolio Risk Management, Compliance and Regulation,
Finance, Trade Execution and Allocation, Market Abuse and
Mandate Compliance. 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.
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REMUNERATION REPORT
Dear shareholder,
INTRODUCTION BY THE CHAIR OF THE
REMUNERATION COMMITTEE
On behalf of the Remuneration Committee (the “Committee”),
I am pleased to present the Remuneration Report for the year
ended 31 March 2024, which will be my last report as Chair
of the Committee. As you will be aware, with effect from 1
April 2024, Miriam Greenwood became the new Chair of
the Committee. I remain a member of the Committee and will
retire from the Board at the 2024 AGM.
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 outlines how we implemented
the current Directors’ Remuneration Policy (“DRP”) and how we
intend to apply the Policy in the financial year ending 31 March
2025. This report will be subject to an advisory vote at our
2024 AGM, to be held on 19 September 2024.
DIRECTORS’ REMUNERATION POLICY
This year marks the second full year in the operation of our
most recent 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.
When the current DRP was put in place, we stated that it would
remain in force until our annual general meeting in 2024. We
have, therefore set out the new DRP intended to apply from
1 April 2025 and is subject to a binding vote at our 2024
AGM, to be held on 19 September 2024. The proposed new
DRP is introduced and set out by Miriam Greenwood in the
New Directors’ Remuneration Policy section below.
IMPLEMENTATION OF THE DRP IN FY24
I have consistently maintained that although the DRP is critical in
establishing the framework for Executive Director 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.
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 FY24
Annual Bonus
The Committee undertook a review of performance against all
bonus metrics, both quantitative and qualitative.
As Shareholders will be aware this was a challenging year
for many active asset managers in the UK market but the
Committee considered that no adjustments should be made to
the financial metrics on account of difficult trading conditions.
Financial metrics were based around budgets and cross
referenced for reasonableness to analysts consensus numbers.
The outturn for the financial metrics, as fully disclosed later, was
nil vesting compared with the maximum opportunity of 70%.
The Committee noted the significant improvement in weighted
investment performance (a 61% outcome) and that the threshold
vesting of this financial metric at 67.5% was particularly stretching.
For the ESG metrics the Committee assessed performance
overall as above target, once again as fully disclosed later
in the Annual Report on Remuneration. This produces a
vesting of 22% compared with the maximum opportunity of
30%. However, given the overall disappointing financial
performance in the year the Committee decided to use its
discretion to limit the overall vesting of the annual bonus to
20%. This reduction also means the final outcome mirrors the
reduction in the Adjusted profit before tax* for the year.
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 2024 was appropriate the Committee referenced that:
*These are Alternative Performance Measures. The disclosure, definition and nature of adjustments to GAAP measures to the
disclosed APMs is a judgement made by management and is a matter referred to the Audit & Risk Committee for approval prior
to issuing the financial statements. See Page 32 for details.
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• there was no adjustment necessary when considering the
overlay of risk management, compliance, conduct and
personal performance;
• the level of the bonus for Executive Directors, is completely
consistent with senior management and the wider workforce.
In a difficult year the outcome of bonus pay has been fairly
shared across the business and in no way favours the
Executive Directors; and;
• there was a robust debate about whether to vest any of the
ESG metrics given the financial performance. The Committee
and the Board believe that to improve long term sustainable
value for all stakeholders the ‘how’ is as important as the
‘what’. Recognising the significant improvement made
across all ESG measures and the importance of Responsible
Capitalism within the business the Committee considered it
right to recognise and reward performance in this area.
In addition, the Committee noted:
• the final financial outcome was at the top end of analysts’
predictions; and above consensus;
• the significant improvement in investment performance; and
• the annual dividend for the year to 31 March 2024 has
been maintained
LTIP
The FY21 LTIP award vested in the period with 37.3% of
awards vesting. See section 3.1 of the Annual Report on
Remuneration for further information.
SINGLE FIGURE TOTAL FOR REMUNERATION FOR FY24
In summary, the variable remuneration total from the single
figure total for remuneration for FY24 for John Ions and Vinay
Abrol, as set out in the Annual Report on Remuneration, when
compared to last year is down 47% and 48% respectively.
Fixed remuneration in FY25
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
and taking into account the financial performance of the
Group over the year, the Committee resolved not to increase
base pay for the Executive Directors for the next year. The
salary increase for employees and members (excluding fund
managers and the Executive Directors) is 4.0% on average
and is focused on our less senior colleagues.
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. Therefore the pension/cash in lieu
of pension for the Executive Directors will remain at 12.5% in
line with the majority of the workforce.
Annual bonus for FY25
The Committee intends to operate the assessment of annual
bonus for 2025 on a very similar basis to 2024 with 70%
of the scorecard focused on Financial Metrics split between
Adjusted profit before tax* of 50%, Distribution effectiveness
(new flows) of 10%; and investment performance of 10%.
There will continue to be Non-Financial Metrics (30%) to ensure
that the Executive Directors lead and oversee the components
of ESG what we know as “Responsible Capitalism” in the
business, but will look to link the Non-Financial Metrics to
our four strategic objectives which will be drivers of future
growth. The first objective is to continue to enhance the client
experience and outcomes. The second objective is to diversify
the product range and investment offering selectively with
teams that meet our investment approach. The third objective
is to broaden further distribution and the client base in the UK
and internationally. The fourth objective is to strengthen our
technology, data and digital capability to advance investment
management, client service and efficiencies.
LTIP for FY25
The LTIP award for the Executive Directors for the year ending
31 March 2025, in line with the current 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 2025
of 153,130 and 112,295 for John Ions and Vinay Abrol
respectively; and
• No adjustment has been made for the weakness of the share
price and the awards represent for John Ions a multiple of
176% of salary. 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 will include
financial measures i.e. Adjusted diluted earnings per share*
(60%) and relative TSR growth (40%).
*These are Alternative Performance Measures. The disclosure, definition and nature of adjustments to GAAP measures to the
disclosed APMs is a judgement made by management and is a matter referred to the Audit & Risk Committee for approval prior
to issuing the financial statements. See Page 32 for details.
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DEVELOPMENTS IN LEGISLATION AND GOVERNANCE
The current 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 2024 AGM. 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 (“WAF”)
to engage with the wider employee group, generally and
specifically, on how Executive Director remuneration aligns
with the wider company pay policy. I can also confirm that
Miriam Greenwood, as the new Chair of the Committee, has
met with the WAF to present and discuss remuneration matters.
Further details on our progress on employee engagement is
contained within the Nomination Committee report.
Mandy Donald, the Non-executive Director responsible for
employee engagement, and attends the WAF, provides
valuable feedback to the Committee on employee 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 2024 at the
forthcoming AGM.
THE ROLE OF THE COMMITTEE
AND ITS COMPOSITION
The Committee is charged with determining 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 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 (for the financial year
ended 31 March 2024)
25 June 2024
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NEW DIRECTORS’ REMUNERATION POLICY
Dear shareholder,
On behalf of the Remuneration Committee (the “Committee”), I
am pleased to present the new Directors’ Remuneration Policy
(“DRP”). As you will be aware, with effect from 1 April 2024,
I became the new Chair of the Committee.
George Yeandle and I have worked closely together to deliver
on the Remuneration outcomes for the business and I would
like to thank him for his contribution and support. As the Chair
it is my responsibility to bring forward the new DRP.
This section below sets out the new DRP, proposed for shareholders’
approval at the 2024 AGM on 19 September 2024 and subject
to receiving shareholder approval, the DRP is intended to apply
for three years to the end of the AGM in 2027.
SETTING THE DRP
The Committee undertook a detailed review of the DRP during
2024 to ensure the policy enables the Group to be successful
in the delivery of its strategy which focuses on expanding
distribution in the UK and internationally, broadening the
investment capability and asset classes, enhancing the client
experience and outcomes, and developing our technology,
data and digital capability to drive growth.
The Committee believes that the DRP should create a competitive
package to support the retention and incentivisation of a high
calibre, well regarded management team to deliver this next
phase of Liontrust’s growth and strategy. The Committee has
recognised the significant personal shareholding of the CEO and
CFO (currently 1,200% and 1,700% of salary respectively) and
the relatively low levels of unvested deferred awards they currently
have outstanding (following successive years of reduced variable
pay outcomes). This has resulted in what the Committee and the
Board considers is an insufficient level of lock-in for the current
Executive Directors. A key consideration for the Committee,
therefore, is to create appropriate levels of opportunity and
retention for the Executive Directors through the proposed DRP
and to deliver this through a mix of shares and funds to create
alignment with our shareholders and investors in our funds. This
will cascade through the senior leadership of business.
The Committee also reflected carefully on the challenge from
shareholders in relation to our current DRP. The Committee
noted that this was primarily driven by the view that the
maximum potential opportunity under the LTIP was excessive
and uncapped, and the structure, granting a fixed number of
shares each year, was unconventional.
The
Committee
sought
independent
advice
from,
PricewaterhouseCoopers LLP. We also consulted extensively
with a significant number of our shareholders as well as proxy
advisors to consider their views on the proposed DRP. We found
this engagement to be valuable and constructive and we were
pleased with the level of feedback and support received.
Based on our review and taking into account the feedback
received from our shareholders as part of our engagement on
the DRP, the Committee concluded that the new DRP should:
• incentivise the Executive team to deliver on the strategic
priorities;
• help retain and attract talent;
• maintain strong alignment with the achievement of our
strategic priorities and the shareholder experience; and
• introduce simplicity and strong alignment with a typical FTSE
remuneration approach by moving to an LTIP award based
on a more traditional percentage of salary grant rather than
a fixed number of shares with an uncapped value at grant.
SUMMARY OF PROPOSED CHANGES TO THE DRP
The proposed DRP is set out below. The only material change to be
made under the proposed DRP relates to the LTIP structure. As part
of the transition to a more conventional and market-aligned LTIP
structure, the Committee is proposing to replace the LTIP structure
under which each annual LTIP award was of a fixed quantum of
shares with a LTIP structure under which grants will be capped as
a percentage of salary. The maximum LTIP opportunity under the
proposed DRP will be 350% and 250% of salary for the CEO and
CFO, respectively. This follows UK standard practice. To address
shareholder feedback, the minimum weighting of financial vs non-
financial targets in the annual bonus scorecard will be adjusted
to 80% to 20% to ensure the annual bonus payouts have strong
alignment with shareholder experience.
Minor changes have also been made to provide the Committee
with sufficient flexibility to implement the policy, as intended ,over
its term. This includes providing the Committee the flexibility to
determine the payout for threshold performance to be up to 25%
of the maximum. This change will allow the Committee to set
an appropriate level of threshold payout for each financial year
taking into account the reduced variable pay opportunity under
the proposed DRP and the new LTIP award structure (which is now
aligned with UK standard practice where payout for threshold
performance is typically set at 25%), market and economic
conditions at the time of setting targets and any shareholder
feedback. The Committee will also ensure targets set have an
appropriate level of stretch reflecting the payout profile at different
performance levels. The targets will also be aligned with the
delivery of our strategic objectives and with a strong link with
shareholder experience and overall Group performance.
As part of the consultation some of our shareholders noted
that it may be preferable to phase-in the maximum LTIP
opportunity once there has been an improvement in the
Group’s performance. The Committee reflected on this
feedback and it is their current intention that the first LTIP grants
under the new DRP in June 2025 will be no more than 90%
of the relevant maximum individual limit (i.e. 315% of salary
for John Ions) unless there has been an improvement in the
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Objective and link to strategy
Operation
Base salary
To provide a satisfactory base salary within a total compensation
package.
The level of base salary to reflect the complexity of the business, market
levels and skills required to deliver our strategy. It is also designed to attract
and retain talent.
Salaries are reviewed annually and become effective in April taking
account of market levels, corporate performance and individual
performance.
Pension
To provide competitive levels of retirement benefit.
Executive Directors are eligible to receive pension contributions into
the Liontrust Group Pension Plan.
Executive Directors have the choice of taking an equivalent cash
payment in lieu of pension contributions.
Benefits
To provide benefits which are appropriately competitive.
Executive Directors are entitled to a range of benefits which
currently include private medical insurance, life insurance, disability,
assurance, travel insurance and access to an employee/member
assistance programme.
Where relocation payments or allowances are paid, they will be
capped at 50% of base salary.
Additional benefits, including participation in all employee share
plans on the same basis as all other employees, may also be
provided in such other circumstances as the Committee may
determine in its discretion.
Annual bonus
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 and strategic priorities.
Deferral ensures a link to longer term performance and risk
management and aligns the interests of Executive Directors with those
of shareholders and fund investors.
Executive Directors are eligible to participate in the annual bonus at
the discretion of the Remuneration 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 fund units.
Deferral will be in line with the regulatory requirement, with a
minimum 50% deferral, vesting annually over three years (subject
to a continuing employment and/or membership requirement) or
such other period as may be determined by the Committee at its
discretion.
Deferral will automatically be made into Liontrust shares unless the
shareholding requirement has been met, in which case deferral will
be made into fund units in line with regulatory expectations under
the FCA’s remuneration rules.
Where required by regulation, the element of the bonus deferred
into shares and/or fund units may be subject to a post-vesting
retention period.
At the discretion of the Committee, dividend equivalents may be
awarded on vested deferred awards in respect of dividends paid
during the vesting and holding period on the underlying shares/fund
units.
REMUNERATION POLICY FOR EXECUTIVE DIRECTORS – COMPONENTS OF EXECUTIVE DIRECTOR REMUNERATION
The following Remuneration Policy table (over the next four pages) summarises each of the remuneration elements payable to the
Executive Directors, with additional information provided in the sections following the table:
performance of the Group. For this purpose, the Committee
will take into consideration the financial performance of the
Group in the financial year ending 31 March 2025 and the
market capitalisation of the Company at this time to assess
whether there has been an improvement in the performance of
the Group. Only where the Committee is satisfied that there
has been an improvement in the performance will it consider
making an LTIP grant at the maximum opportunity set out in
the new DRP. Details of this assessment will be set out in the
Annual Report on Remuneration.
The Committee also can exercise operational discretions
available under the various incentive plan rules in addition to
the specific discretions expressly set out in the DRP to adjust
the percentage of awards that vest to ensure that variable
remuneration outcomes align with the shareholder experience.
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Maximum opportunity
Performance measures and assessment
In normal circumstances, 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. The Committee may determine larger increases in
exceptional circumstances, such as a change in responsibility,
where the overall remuneration opportunity has been set lower than
the market and when it is justified based on skills, experience and
performance in the role.
Not applicable.
The maximum percentage of salary that the Executive Directors can
receive as a pension contribution or cash equivalent will be aligned
with the average funding percentage for the wider workforce
(excluding fund managers), currently 12.5%.
Not applicable.
The maximum opportunity for 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.
The benefit amount will be disclosed in the single figure of
remuneration table for the relevant year as required.
Not applicable.
CEO: Maximum award is 450% of base salary.
CFO: Maximum award is 350% of base salary.
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 80% of the
annual bonus.
Payout at stretch performance will be set at 100% of maximum award
while payout at entry level performance will be up to 25% of maximum
award as determined by the Committee for each financial year.
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-way 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 or discretion applied by the Committee will be fully
disclosed in the relevant year’s Remuneration Report as required by the
reporting requirements.
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STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
Objective and link to strategy
Operation
Long-Term Incentive Plan (“LTIP”)
The LTIP is intended to provide long term reward, incentivise strong
performance and retain the Executive Directors. Vesting will be
subject to a continuing employment/ membership requirement
and performance conditions which are linked to key financial and
shareholder return measures
LTIP awards are normally granted annually over Liontrust shares with
vesting dependent on the achievement of stretching performance
conditions.
Performance is measured over a 3-year period.
Shares received on or after vesting are subject to a 2-year holding
period commencing on the date of vesting or such other period as
may be determined by the Committee at its discretion noting any
applicable regulatory requirements.
The operation of the LTIP is reviewed annually to ensure that grant
levels, performance measures and other features remain appropriate
to the Company’s current circumstances.
Dividend equivalents may be awarded on vested shares in respect
of dividends paid during the vesting and holding period.
Share Incentive Plan (“SIP”)
The SIP allows all employees, including the Executive Directors, to
purchase Company shares with a matching element, to build up an
interest in Company shares and to increase alignment of interests with
shareholders.
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.
Save As You Earn (“SAYE”)
The SAYE allows all employees, including the Executive Directors, to
make contributions to a savings plan that can then be used at the end
of the scheme to purchase shares at a discounted price, to build up an
interest in Company shares and to increase alignment of interests with
shareholders
An all employee HMRC approved savings scheme that allows the
Directors to purchase shares, in a tax efficient manner and subject to
limits, at a discounted price. The option price can be at a discount
to the prevailing share price. Currently the discount can be up to a
maximum of 20%, as permitted under the applicable HMRC rules.
Subject to completing the full term of the scheme, the option can
be exercised, or savings can be redeemed in cash. There are no
performance conditions linked to the options granted.
Shareholding requirement
The shareholder requirement aligns the interests of Executive Directors
with those of shareholders.
The shareholder requirement further aligns the interests of Executive
Directors with those of shareholders and encourages the Executive
Directors to focus on sustainable long-term performance.
The employee shareholding requirement is 500% of base salary for
all Executive Directors.
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 is expected to 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 stepping down as an Executive
Director, the lower of the i) shareholding requirement immediately
prior to cessation or ii) shares acquired through variable pay awards
granted under this DRP and the previous shareholder approved DRP.
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FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT
Maximum opportunity
Performance measures and assessment
CEO: Maximum award is 350% of base salary.
CFO: Maximum award is 250% of base salary.
The first LTIP grant will not be more than 90% of the maximum
opportunity for the CEO and CFO unless there has been an
improvement in the financial performance of the Group. For this
purpose, the Committee will take into consideration the financial
performance of the business in the relevant financial year ending
31 March 2025) and the market capitalisation of the Group at
this time to assess whether there has been an improvement in the
performance of the Group. Only where the Committee is satisfied
that there has been an improvement in the performance will it
consider making an LTIP grant at the maximum opportunity.
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.
Currently, the performance measures are expected to be:
1. absolute TSR (40% weighting) with a relative TSR underpin. The
relative TSR underpin will be assessed against the FTSE 250
and allow the Committee to flex the outcome of the absolute TSR
assessment by up to 10% of the award, creating strong alignment
with shareholders.
2. EPS (30% weighting)
3. Investment performance (3 year and 5 year) (30% weighting).
This can involve looking at the weighted fund performance that
is in the first or second quartile of their respective Investment
Association sector over the 3 and 5 year period as at the end of
the relevant 3 year performance period for each LTIP award.
Entry level performance will payout up to 25% of maximum as
determined by the Committee for each financial year whilst payout
at stretch performance will be set at 100% of the maximum award.
In line with the UK Corporate Governance Code, the Committee
has the discretion to adjust formulaic outcomes of the LTIP to reflect
overall corporate performance.
Any adjustments or discretion applied by the Committee will be fully
disclosed in the relevant year’s Remuneration Report as required by
the reporting requirements.
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.
Savings of £500 per month across all SAYE schemes participated in.
Not applicable.
Not applicable.
Not applicable.
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STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
NOTES TO THE REMUNERATION POLICY TABLE
Malus and clawback
Malus and clawback provisions will apply whereby annual
bonus and / or LTIP awards can be reduced, withheld or
reclaimed in an exceptional event of:
• a misstatement or misleading representation of performance;
• a significant failure in risk management and control;
• actions resulting in censure from a regulated authority or
reputational harm;
• serious misconduct for which the individual is personally
responsible or directly accountable;
• participation in or being responsible for conduct which
resulted in significant losses to the firm; and/or
• failure to meet appropriate standards of fitness and propriety.
For the annual bonus, malus will apply over the deferral period
and clawback will apply for 2 years after the payment of any
upfront and deferred portion of the award. For the LTIP, malus
will apply over the 3-year vesting period and clawback will
apply over the 2-year post-vesting holding period.
PAYMENTS FROM EXISTING AWARDS
The Committee reserves the right to make any remuneration
payments including satisfying awards of variable remuneration,
notwithstanding that they are not in line with the DRP set out
above, where the terms of the payment were agreed:
• before the DRP set out above or any previous DRP came into
effect; or
• at a time where a previous DRP, approved by shareholders,
was in place provided the payment is in line with the terms
of that DRP; or
• at a time when the relevant individual was not a Director of
the Group and the payment was not in consideration for the
individual becoming a Director of the Group.
Details of any such payments will be set out in the Remuneration
Report as they arise.
PERFORMANCE MEASURES
The performance measures selected for the annual bonus and
LTIP awards will be set on an annual basis by the Committee,
taking into account our strategic priorities and any feedback
received from our shareholders.
Performance measures and targets for the annual bonus and LTIP
will include a balance of financial and non-financial measures
which are aligned with Liontrust’s short-term and long-term key
strategic priorities. Financial measures will include measures
linked to profits, fund performance and TSR. Non-financial
measures will include measures aligned with the delivery of
our strategic priorities and ESG commitments. The targets
for the measures will be set taking into account a number of
factors, including targets set in our annual business plans, our
strategic priorities, shareholder expectations, analyst forecasts
and the economic environment.
CONTEXT OF WORKFORCE PAY
The Committee considers the pay and conditions of all
employees and members when determining remuneration
arrangements for Executive Directors. The DRP for Executive
Directors contains some minor differences in the structure of
pay compared to that of all other employees and members,
particularly around corporate governance requirements that
apply for Executive Directors. However, all employees and
members, including Executive Directors, are incentivised in a
similar way and are rewarded according to the success of the
Group and personal performance.
Participation in the all-employee share plans (the HMRC tax
advantaged Save-As-You-Earn and Share Incentive Plan) is
offered to all UK employees on the same terms.
Benefits are also offered on a consistent basis. For example, the
level of employer pension contributions or payments in lieu of
pension contributions for Executive Directors as a percentage of
salary will be in line with the average contribution rate for all UK
employees (excluding fund managers). Other benefits, such as
private medical insurance, life insurance and health-screening
are offered to all employees and members on the same terms.
STAKEHOLDER VIEWS
The Committee is committed to ongoing dialogue with
shareholders and investor bodies, and consulted with both a
number of times in determining the DRP.
The Committee has considered the impact of the DRP on
wider stakeholders, including our clients, our employees and
members and the wider economy. After consulting with our
major shareholders, investor bodies and other stakeholders,
feedback and views varied across these groups and was not
always uniform, but the Committee is confident that the new
DRP addresses areas of concern with our current DRP, ensures
that our arrangements are fit for purpose as we move forward
with our strategy and encourage ambition and entrepreneurial
management. In particular, the changes proposed to the LTIP
structure will bring our LTIP structure in line with standard UK
practice. The shareholders we engaged with were supportive
of this change to our LTIP structure to bring it in line with
standard UK practice.
The Committee is satisfied that the proposed DRP takes a
responsible approach to pay and guards against irresponsible
behaviour or excessive risk-taking.
The Committee also consulted on the proposed changes with
the Company’s workforce advisory forum given the importance
of employee engagement.
EXECUTIVE DIRECTOR ILLUSTRATIVE PAY SCENARIOS
Our aim is to ensure that superior awards of variable
remuneration are only paid for exceptional performance, with
a substantial proportion of Executive Directors’ remuneration
payable in the form of annual bonus and LTIP awards. The
charts below illustrate the remuneration opportunity provided
to each Executive Director at different levels of performance for
the first year of the new DRP.
At a glance – our remuneration policy for Executive Directors
CEO
CFO
Minimum
Minimum
100%
100%
£660,550
£505,300
Fixed
Annual bonus
LTIP
Fixed
Annual bonus
LTIP
£3,578,550
£2,176,300
£5,329,350
£3,178,900
£6,350,650
£3,735,900
18%
23%
46%
45%
36%
32%
12%
16%
49%
49%
38%
35%
10%
14%
41%
42%
48%
45%
Target
Target
Maximum
Maximum
Maximum with
50% share
price growth
Maximum with
50% share
price growth
0
1
2
3
4
5
6
7
8
0
1
2
3
4
5
£’m
£’m
CEO
£584k
CFO
£446k
Base salary
CEO
£584k
CFO
£446k
Perf. year
Y0
Y1
Y2
Y3
Y4
Y5
Total
3 year
performance period
2 year
holding period
10% salary
Pension
10% salary
CEO
450% salary
CFO/COO
350% salary
Annual bonus
1/3 vests
1/3 vests
1/3 vests
Grant
Vest
Vest
50%
upfront
CEO
350% salary
CFO/COO
250% salary
LTIP
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LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT
Element
Assumptions
Fixed remuneration
Base salary and fixed allocation as at 1 April 2024.
Benefits paid at the same level as in the financial year ended
31 March 2024.
Pension of 12.5% of base salary.
Annual bonus
Maximum annual bonus opportunity of 450% of base salary for the
CEO and 350% for the CFO.
Target performance payout will be at the mid-point of payout
for threshold performance at 25% of the maximum and stretch
performance payout at 100% of the maximum.
LTIP
Maximum LTIP opportunity of 350% of base salary for the CEO and
250% for the CFO.
Target performance payout will be at the mid-point of payout
for threshold performance at 25% of the maximum and stretch
performance payout at 100% of the maximum (with no share price
growth). For maximum with 50% share price growth 100% of
maximum payout is assumed with 50% growth in share price.
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LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
APPROACH TO RECRUITMENT REMUNERATION
The Committee’s approach to recruitment remuneration is to pay
no more than is necessary to attract appropriate candidates
to the role. Our principle is that the pay of any new Executive
Director would be assessed following the same principles as
for the existing Executive Directors and under the applicable
Directors’ Remuneration Policy previously summarised, unless
specific circumstances arise that the Committee deems as
appropriate, accompanied by a clear business case to secure
a desired candidate.
The Committee is mindful that it wishes to avoid paying more
than it considers necessary to secure the preferred candidate
and is cognisant of guidelines and shareholder sentiment
regarding one-off or enhanced short or long term incentive
payments made on recruitment and the appropriateness of any
performance conditions associated with an award.
SERVICE CONTRACTS AND PAYMENT
FOR LOSS OF OFFICE
The Directors’ employment contracts or letters of appointment
or limited liability partnership membership agreements/side
letters are set out below in section 7.2 of the Annual Report
on Remuneration.
The Group’s general policy is that each Executive Director will
have a rolling contract of employment (and, if applicable side
letter) with mutual notice periods of six months. If an Executive
Director has a contract as an employee and as a member,
then any notice periods will run concurrently. The Committee
will consider the appropriate notice period when appointing
any new Executive Director. If necessary to secure a new hire,
a notice period of up to 12 months may be offered. When
recruiting new Executive Directors, the Committee’s policy is
that contracts will not contain any provision for compensation
upon early termination.
None of the Directors’ employment contracts or letters of
appointment or limited liability partnership membership
agreements/side letters contain provisions for compensation
for loss of office. The Group’s policy on compensation for loss
of office is set out on the page opposite.
Element
Policy
Base salary/fees and benefits
New Directors will be provided with a satisfactory base salary and/or fee level within a total package.
Performance-related components and certain benefits for Executive Directors are calculated by reference
to base salary. The level of salary and fee broadly reflects the value of the individual, their role, skills and
experience.
New Executive Directors shall be eligible to receive benefits in line with the Group’s benefits policy as set out
in the Remuneration Policy for Executive Directors.
Pension
New Executive Directors will be provided with post-retirement pension benefits or a cash alternative in line
with the Group’s pension policy as set out in the Remuneration Policy for Executive Directors.
Annual bonus
New Executive Directors will be eligible to participate in the annual bonus arrangements as set out in the
Remuneration Policy for Executive Directors at the discretion of the Committee taking into account the time
spent by the individual in the relevant Executive Director role (a maximum award of 450% of salary for the
CEO and 350% of salary for other Executive Directors).
LTIP
New Executive Directors may be eligible to participate in the LTIP arrangements as set out in the
Remuneration Policy for Executive Directors at the discretion of the Committee taking into account the time
spent by the individual in the relevant Executive Director role (a maximum award of 350% of salary for the
CEO and 250% of salary for other Executive Directors).
Sign-on payments / recruitment
rewards
It is not the Committee’s policy to provide sign-on payments other than in exceptional circumstances.
Where sign-on payments/recruitment rewards are paid in exceptional circumstances, they will be limited to
100% of base salary/fixed allocation.
Buyout awards
The Committee will also seek to structure any replacement awards such that overall, they are no more
generous in terms of quantum or the vesting period than the awards due to be forfeited. In determining
quantum and structure of these commitments, the Committee will seek to replicate the fair value and, as far
as practicable, the timing and performance requirements of remuneration foregone and, where appropriate,
the malus and clawback terms. The Committee may determine in its absolute discretion on whether such
awards will be made in cash, shares or a combination of both subject to regulatory requirements.
Relocation policies
It is the Committee’s policy to avoid relocation payments or allowances other than in exceptional
circumstances.
Where relocation payments or allowances are paid it will be limited to 50% per annum of base salary/
fixed allocation, for a maximum of two years.
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FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT
Element
Approach
Discretion
Base salary,
benefits
and pension
In the event of loss of office, there will be no compensation
in respect of base salary, benefits or pension. Base salary,
benefits or pension will continue to be paid during the
notice period.
The Committee has absolute discretion to determine that, if
appropriate, a payment in lieu of notice may be made, if it
is in the best interests of the Group.
Annual bonus
Where an Executive Director’s employment or membership
is terminated after the end of a performance year but
before the payment is made, the Executive Director
may be eligible for a bonus/variable allocation for that
performance year, subject to achievement of applicable
performance conditions over the period. No bonus or
variable allocation will be made in the event of termination
for gross misconduct.
Where an Executive Director’s employment or membership
is terminated during a performance year, a pro-rata award/
allocation for the period worked in that performance year
may be payable subject to achievement of applicable
performance conditions over the period and provided the
individual is a “good leaver”. If the Executive Director is a
good leaver, any bonus under deferral will also vest in full at
the end of the deferral period.
The good leaver definition is the same as for the LTIP as set
out below.
The Committee has absolute discretion to determine:
• whether a payment is due in the instance of termination
after the end of a performance year but before payment,
subject to performance achieved; and
• that the reason for termination is classified in the same
manner as those described in the “good leaver” definition
set out below.
LTIP
The treatment of unvested LTIP awards is governed by the
rules of the LTIP.
On termination of employment or membership before the
performance measurement date, all unvested/unreleased
awards generally will lapse, unless termination of
employment is by reason of:
• death;
• ill-health, injury or disability;
• redundancy;
• retirement (with the agreement of the Company);
• the employing company and/or limited liability
partnership in which the Executive Director is an employee
and/or member ceases to be a member of the group;
• transfer of the business or part of the business to which
the participant’s employment or membership relates to a
person who is not a member of the group; or
• any reason, permitted by the Board in its absolute
discretion in any particular case.
If an Executive Director terminates employment and/
or membership by any of the reasons described above,
that individual is classified as a “good leaver” and does
not lose unvested share awards. At the discretion of the
Committee and subject to regulatory requirements, unvested
share awards will vest on the vesting date or the date
of cessation. In determining the proportion of awards
which vest, the Committee will take into account if the
performance conditions have been achieved and time
served in employment during the relevant performance
period where appropriate.
The Committee has absolute discretion to determine that the
reason for termination is classified in the same manner as
those described adjacent.
Subject to regulatory restrictions, the Committee has the
discretion to determine that the end of the performance
period is the date of cessation, whether and to what extent
the performance measures have been satisfied or waived,
whether to pro-rate the number of vested shares to reflect the
performance period completed and whether to accelerate
the vesting date to the date on which the Committee makes
its final determination of the number of shares which vest.
It should be noted that it is the Committee’s policy to only
apply its discretion in limited circumstances.
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LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
Change of
control
All unvested deferred awards and LTIP will vest on a
change of control (regardless of underlying corporate
performance or satisfaction of the shareholding
requirement) subject to compliance with any regulatory
requirements.
All unvested awards under the deferred bonus will vest in
full.
The level of vesting of LTIP awards will be determined
by the proportionate achievement of the performance
conditions as at the date of change of control (and time
elapsed since grant to change of control at the discretion
of the Committee) and subject to compliance with any
regulatory requirements.
Discretion may be exercised in cases where the Committee
believes that the outcome is not a fair and accurate reflection
of performance achieved. The exercise of this discretion may
result in a downward or upward adjustment in the amount
determined based on proportionate achievement of the
performance conditions. Any adjustments will be disclosed in
the relevant annual report.
Other
contractual
obligations
There are no other contractual provisions.
None.
Legal claims
The Committee retains the discretion to make payments (including but not limited to professional and outplacement fees) in
connection with an Executive Director’s cessation of office or employment to facilitate smooth handovers; mitigate against
legal claims; and/or procure reasonable assistance with investigations or claims.
The Directors’ employment contracts or letters of appointment
or limited liability partnership membership agreements/side
letters are available for inspection at 2 Savoy Court, London
WC2R 0EZ.
EXECUTIVE DIRECTORS’ EXTERNAL APPOINTMENTS
Board approval is required before any external appointment
may be accepted by an Executive Director. If approved, the
individual is permitted to retain any fees paid in respect of such
office or services. At present, none of the Executive Directors
hold an external appointment.
SENIOR LEADERSHIP TEAM REMUNERATION
The approach to Executive Director pay will be appropriately
cascaded for other senior executives at Liontrust, ensuring
that there is alignment within the senior leadership team.
Remuneration policies for the wider senior leadership team will
remain broadly unchanged with bonuses capped at between
200% and 300% of salary (with 30% deferred over three
years into Liontrust funds) and LTIP awards capped at between
100% and 200% salary).
COMPLIANCE WITH THE FCA’S MIFIDPRU
REMUNERATION CODE
The Committee regularly reviews its remuneration policies
and practices to ensure compliance with the requirements of
the FCA’s MIFIDPRU Remuneration Code as applicable to the
Company. The Company’s remuneration policies and practices
are designed to be consistent with the prudent management of
risk, and the sustained long-term performance of the Company.
The CFO, who is responsible for Risk at Board level, is involved
in reviewing the remuneration policies and practices to ensure
that they are aligned with sound risk management, and keeps
the Committee informed of the Group’s risk profile so that this
can be taken into account in remuneration decisions.
NON-EXECUTIVE DIRECTORS’ FEES
The following Remuneration Policy summarises the remuneration
payable to Non-Executive Directors.
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FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT
DILUTION AND THE EMPLOYEE BENEFIT TRUST
Dilution from employee share awards and member
incentivisation under the new DRP will 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 or other awards granted under the LTIP (for the
Executive Directors and other employees and members), SAYE
and 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 are satisfied by market purchased
shares, so have no dilutive effect.
Miriam Greenwood OBE DL
Chair of the Remuneration Committee (from 1 April 2024)
25 June 2024
Objective and link to strategy
Operation
Maximum opportunity
Performance measures
Base salary, benefits and pension
Non-Executive Director fees
(including the Non-Executive
Chairman) 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 chairmanship
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.
This may also include fees for
membership/ chairmanship 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
Remuneration Committee.
Non-Executive Directors do
not participate in any variable
remuneration elements.
The Board (excluding the Non-
Executive Directors) retains the
discretion to pay the fees in
shares rather than cash where
appropriate.
Any taxable or other expenses
incurred in performing their role
may be reimbursed along with
any related tax cost on such
reimbursement.
The Board (excluding Non-
Executive Directors) will
normally review the amount
of each component of fees
periodically to assess whether,
individually and in aggregate,
they remain competitive and
appropriate in light of changes
in roles, responsibilities and/
or time commitment of the
Non-executive Directors, and
to ensure that individuals of the
appropriate calibre are retained
or appointed.
Fee increases are determined
noting the above and by
reference to individual
responsibilities, inflation and an
appropriate comparator group.
Not applicable.
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STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
ANNUAL REPORT ON REMUNERATION
This remuneration report details the remuneration outcomes for the financial year ended 31 March 2024 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 2024 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 2025 is in
accordance with the DRP approved at the February 2022 general meeting.
The report sets out:
1. Remuneration outcomes for the year to 31 March 2024
– including the context for the Directors’ remuneration and
the performance metrics that the Committee considered
when setting the Executive Director annual bonus outcome.
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 Deferred Bonus Plan
(DBVAP).
4. Proposed remuneration for the financial year ending 31
March 2025.
5. Returns to shareholders and Executive remuneration – returns
to shareholders over the past 10 years are compared with
the total remuneration of the Chief Executive Officer 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.
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LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT
1. REMUNERATION OUTCOME FOR THE YEAR TO 31 MARCH 2024
1.1 Single total figure for remuneration
Executive Directors (audited information)
John Ions
Year to 31 March
Vinay Abrol
Year to 31 March
2024
£’000
2023
£’000
2024
£’000
2023
£’000
A. Fixed pay
Base salary
584
550
445
420
Benefits in kind -private medical insurance
5
4
5
5
Cash in lieu of pension
69
55
53
42
Total Fixed pay
658
609
503
467
B. Annual Bonus
Cash bonus
263
310
156
184
DBVAP
263
310
156
184
Total Annual Bonus
526
620
312
368
C. Total pay for the financial year
Sub-total (A+B)
1,184
1,229
815
835
D. Vesting of LTIP awards
Base value element of vested LTIP awards
324
508
214
334
Share price appreciation and dividend equivalent elements on
vested LTIP awards
(145)
192
(96)
127
Total LTIP awards vesting
179
700
118
461
E. Other
SIP matching shares
4
4
4
4
Total Other
4
4
4
4
Total remuneration (C+D+E)
1,367
1,933
937
1,300
Of which:
Total variable remuneration (B + D)
705
1,320
430
829
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STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
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
2024
£’000
2023
£’000
2024
£’000
2023
£’000
2024
£’000
2023
£’000
Basic Non-executive Director fee
–
–
65
65
65
65
Fee for Non-executive Chair
210
210
–
–
–
–
Fee for Senior Independent Director
–
–
–
–
–
–
Fee for Sub-committee Chair / membership:
Audit & Risk Committee
–
–
20
20
9
–
Nomination Committee
–
–
5
5
5
5
Remuneration Committee
–
–
9
2
20
20
Fee for membership of other Group
Committees
–
–
22
17
9
9
Benefits1
4
–
–
–
–
–
Total
214
210
121
109
108
99
Rebecca Shelley
Year to 31 March
Miriam Greenwood2
Year to 31 March
2024
£’000
2023
£’000
2024
£’000
Basic Non-executive Director fee
65
65
25
Fee for Non-executive Chair
–
–
–
Fee for Senior Independent Director
12
12
–
Fee for Sub-committee Chair / membership:
Audit & Risk Committee
9
9
3
Nomination Committee
5
5
2
Remuneration Committee
9
9
3
Fee for membership of other Group
Committees
5
–
–
Benefits1
–
–
–
Total
105
100
33
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.
2Appointed 16 November 2023.
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FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT
Performance Metric
Weighting
Threshold
Target
Max
Actual
Weighted
Result %
Financial Measures (70%)
Change in Adjusted Profit Before Tax
50.0%
90.0%
100.0%
110.0%
80%
0.0%
Distribution effectiveness - Net flows compared
to budget of £500 million
10.0%
90%
100%
110%
(1217%)
0.0%
Investment performance, percentage of AuMA
over 1, 3 and 5 years in 1st or 2nd Quartile).
Weighted 30% for 1Y, 40% for 3Y and 30%
for 5Y performance.
10.0%
67.5%
75%
82.5%
61%
0.0%
ESG inc Risk, Personal Performance Measures (30%)
Attraction and retention of talent, which
includes the following factors: Articulation of
Employee Value Proposition – the tangible
and intangible benefits of working at Liontrust.
Investment in training and development
opportunities for all staff and bringing to life
the Liontrust Leadership Charter
10.0%
N/a
N/a
N/a
See comments
7.0%
DE&I – which includes the following factors:
Establish of a group wide DE&I strategy,
establish baseline DE&I metrics for the Group,
continuing to offer DE&I specific training, and
ensuring there is a DE&I component in hiring
practices
10.0%
N/a
N/a
N/a
See comments
8.0%
ESG Integration, which includes the following
factors: Reporting on ESG integration for the
Group’s investment teams, evidencing what we
do across the Group in terms of RC (reporting
and making sure the activity is in place in the
areas investors expect us to be active)
10.0%
N/a
N/a
N/a
See comments
7.0%
Totals
100.0%
22.0%
1.2 Annual bonus
The annual bonus for the financial year ended 31 March 2024 were based on the following key performance metrics. The
performance outcomes for each key performance indicator are also shown below:
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Notes
Due to a challenging year for active asset managers and net outflows in financial year the financial outcome is 80% compared to a target of
£82.6 million so scores 0%.
Net outflows for the financial year versus a budget for net inflows, so outcome is well below target of net inflows of £500 million so scores 0%.
It continued to be a very difficult year for Quality Growth and UK Small and Mid-Cap equities. However, performance over the near term is
improving, but blended investment performance is at 61%, so scores 0%.
During FY24 John and Vinay achieved the measures of success as set out under Attraction and Retention of talent. They worked to define the
employee value proposition in a single document – Life At Liontrust.
Delivered training for all staff including around self help career planning and inclusion. Reorganised the senior leadership team supporting
clearer succession planning. Evidence of success through the engagement survey results which were positive in December 2023 with scores
exceeding or remaining in line those from FY23. Continued financial investment in development of all staff in difficult trading conditions.
John Ions and Vinay Abrol developed and enhanced DE&I during FY24, including the formulation of a DE&I strategy and established DEI
metrics for the purpose of identifying the areas of future success exposure or weakness. Vinay Abrol, our CFO, chairs the DE&I Committee
with a 100% attendance record during the financial year. John Ions and Vinay Abrol sponsored and actively supported training for all
staff on inclusivity, DE&I and on inclusive leadership. The staff engagement survey in December 2023 was very well supported with a
participation rate of 82% which is the same as last year and 3% higher than the year before, with the DE&I questions in the survey scoring
a very positive 80%.
John Ions and Vinay Abrol drove ESG integration and reporting in FY24. They sponsored the Group’s stewardship code response and
Responsible Capitalism report which supported Liontrust retaining its signatory status with the FRC. Ensured that the Group should evidence that
it does what it says. Working with the Responsible Capitalism team to ensure the investment teams providing examples of engagements with
companies, rationales for proxy voting, and showing where these factors impact the investment decision. Established a baseline for future
measurement about where Liontrust stands in terms of its own business in areas such as biodiversity, financial inclusion, financial education.
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STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
Executive Director
Key performance in the financial year ended 31 March 2024
John Ions
John Ions has led the senior leadership team in a highly effective manner in a very difficult environment for active asset
managers. In particular, strong leadership of the distribution and marketing teams.
The UK distribution team has been reorganised with the Single-Strategy sales team and the Multi-Asset team merged into
one UK distribution team under Kristian Cook. International Distribution has also been restructured under Jeremy Roberts,
new recruit who has joined from GAM as our new Head of Global Distribution (ex-UK). Sales engagement with clients has
continued to be excellent with over 800 clients attending the World Market Review Roadshow (for Multi-Asset solutions)
and over 800 clients attending the Sustainable Future Roadshow and Virtual Conference. Liontrust’s marketing team did an
excellent job in promoting the brand, coming first for unprompted advertising recall among retail investors (source: L Research
in Finance, Oct 2023).
Alongside Vinay Abrol, has been hugely active in promoting DE&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 Investec and HSBC initiated analyst coverage during the year.
Always ensured that risk and compliance were important factors when managing the Group, including meeting with the Chief
Risk 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 Development, 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.
Vinay, alongside John Ions, led the reorganisation of the Senior Leadership Team, promoting Edward Catton to Chief
Operating Officer, Martin Kearney to Chief Risk Officer and Sally Buckmaster to General Counsel.
Vinay led the project to review and assess our research tooling across our business, which in turn led to a project to select
a vendor provided solution. Having selected FactSet RMS as our preferred supplier, Vinay oversaw the project to implement
FactSet RMS across our investment teams. Vinay is also leading our project to implement a new front office system tooling
having selected BlackRock Aladdin, with FlexTrade as our execution management system, and an extended middle officer
model with BNY Mellon and the implementation of a new enterprise data platform - BNYM Mellon’s Data Vault solution.
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.
This bonus pool for the Executive Directors translates into
individual annual bonuses to the Executive Directors of between
70% and 90% of base remuneration (2023: 88% and 113%).
The Committee also set the level of deferral into Group
managed funds at 50% for John Ions (2023: 50%) and 50%
for Vinay Abrol (2023: 50%) over the period 25 June 2024
to 25 June 2027; 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 35% and 45% of
base remuneration respectively (2023: 56% and 44%).
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.
The Committee also considered that no further adjustments up or down should be made on account of the risk and personal
performance moderator.
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FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT
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 12.5 % of base salary.
None of the Executive Directors have a prospective entitlement
to a defined benefit pension by reference to qualifying service.
As stated in last year’s 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 wider
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 for some or all of the amount the Company would
otherwise contribute to the pension plan.
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 2.1% for the financial year ended 31 March 2024 (2023: 4.3%), with 1.3%
allocated to John Ions and 0.8% 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 2024 and the prior year;
and the same information, on an averaged basis, for all staff (excluding the Chief Executive Officer and Directors) is shown in
the table below:
Directors percentage
change year ended
31 March 2024
Directors percentage
change year ended
31 March 2023
All staff year ended
31 March 20241
All staff year ended
31 March 2023
Salary
2%
67%2
6%
11%
Benefits3
12%
55%
39%
14%
Bonus
-15%
-77%
-7%
-38%
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.
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STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
2.2 Chief Executive Officer pay ratio
The table below shows the ratio of Chief Executive’s pay to Lower quartile, median and upper quartile for employee member:
Ratio for year ended
31 March 2024
Ratio for year ended
31 March 2023
Ratio for year ended
31 March 2022
Ratio for year ended
31 March 2021
Lower quartile ratio
15x
21x
69x
84x
Median ratio
10x
13x
39x
45x
Upper quartile ratio
5x
7x
16x
22x
Based on full time equivalent staff
The Group uses ‘Option A’ to calculate the Chief Executive Officer 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 members and employees at the lower, median and
upper quartiles. For the purpose of this disclosure, the Company has chosen 31 March 2023 as the reference date on which the
pay for all employees and members was calculated, consistent with our approach in prior years.
Lower quartile
£’000
Median
£’000
Upper quartile
£’000
CEO single figure
–
1,367
–
Workforce single figure
89
139
259
Workforce salary component
62
92
139
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 2024 and 31 March 2023.
*These are alternative performance measures (‘APM’). See Note 7 on page 166.
0
20,000
100,000
80,000
60,000
40,000
Adjusted profit before tax
– excl. performance fee
profit (£’000)*
2023
2024
Adjusted profit
before tax (£’000)*
Total workforce
renumeration (£’000)
Dividend spend (£’000)
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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 and
long-term incentives; as well as the salary 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 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 percentages split by gender for the current,
and previous financial year, in order that it can also analyse
the outcomes from a gender pay perspective.
Liontrust operates a Workforce Advisory Forum, whose Chair
meets with the Committee Chair to discuss remuneration related
matters. This engagement is Liontrust’s method for ensuring a
formal dialogue exists between employees, members and the
Committee. It provides the opportunity for employees and
members to engage with the Committee via the Workforce
Advisory Forum on any relevant employee and/or member
remuneration matter.
Collectively this work helps demonstrate the Committee’s
considerations in appropriately balancing the remuneration
outcomes for the wider work force with its decisions regarding
Executive Director Remuneration.
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 84% and 87% of their
variable remuneration respectively:
Director
Type of variable remuneration
Value (£’000)
% deferred
John Ions
Cash bonus
263
n/a
DBVAP
263
15%
LTIP award FY20241
1,152
69%
Total
1,678
84%
Vinay Abrol
Cash bonus
156
n/a
DBVAP
156
14%
LTIP award FY20241
845
73%
Total
1,157
87%
1Awarded 22 June 2023
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LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
3.1 Vested LTIP Awards
Background
The LTIP for the financial year ended 31 March 2021, over 61,719 and 40,671 Ordinary shares. 23,027 shares for John Ions
and 15,174 shares for Vinay Abrol vested (37.3%), with the vested Ordinary shares released on 7 July 2023 then being subject to
a two-year holding period.
Performance measures and vesting
Condition
Test
Result
% vesting
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
Start of the performance period: 7 July
2020, Starting share price: 1,356.3p,
End of the performance period: 7 July
2023.
Three-month average share price to end of
performance period is 755.65p, meaning
an annualised TSR over the period of
-14% versus a Target of 15% so 0% vests
0%
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
Start of the performance period: 7 July
2020, with starting FTSE all share total
return index value is 6,531.22 which is
the 30-day average to the day before
grant date and staring share price is
1,356.3p, End of the performance
period: 7 July 2023.
30-day FTSE all share total return index
value is 8,631.39 and three-month
average share price is 755.65p both to
end of performance period, meaning an
annualised TSR over the period of -23.7%
versus a Target of 15% so 0% vests
0%
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
Starting EPS (Diluted Adjusted EPS
excluding performance fees): 56.21p for
the financial year ending 31 March 2020
Adjusted diluted EPS excluding
performance fees for the financial year
ended 31 March 2023 was 100.91p,
which is an annualised return of 21.5%
versus a Target of 15% so 100% vests.
30%
Strategic Objectives Performance
Net inflows compared to target (15%):
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.
Starting year for net inflows: Year ending
31 March 2020. Ending year for net
inflows: Year ending 31 March 2023.
Target net inflows of £8,035 million,
actual net inflows of £1,167 million, so
15% versus a Target of 125% so 0% vests.
0%
Investment performance (7.5%): 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 2023
FY21, 51% of relevant AuMA in 1st or 2nd
quartile; FY22, 20% of relevant AuMA in
1st or 2nd quartile; FY23 72% of relevant
AUM in 1st or 2nd quartile. Average over
the period is 48% versus a Target of 75%
so 0% vests.
0%
1. Developing existing employees/
members and recruiting new talent
(25% of 7.5%).
2. Providing the products and services that
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%).
1. Limit senior employee/member losses
and strengthen the management team.
2. Broaden the product range.
3. Expand out multi-asset and international
franchise.
4. Strong risk controls and create a
positive compliance environment.
1. Over the period there have been
very few employee/ member 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 Abrol and John Ions 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.
7.3%
37.3%
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Retention requirements
37.3% of the LTIP awards vested, so for John Ions 23,027 Ordinary shares and for Vinay Abrol 15,174 Ordinary shares, were
exercised and then subject to a two-year holding period.
Year ended 31 March 2024
LTIP awards
that vested
Value on grant
Gain result from share price appreciation and
dividend equivalent payments on vested LTIP
awards over the vesting period
Value on
vesting
John Ions
23,027
£324,690
(£145,197)
£179,493
Vinay Abrol
15,174
£213,964
(£95,695)
£118,269
Year ended 31 March 2023
LTIP awards that
vested
Value on grant
Gain result from share price appreciation and
dividend equivalent payments on vested LTIP awards
over the vesting period
Value on
vesting
John Ions
66,605
£507,530
£192,888
£700,418
Vinay Abrol
43,891
£334,457
£127,121
£461,578
Option exercise details (audited information)
For John Ions and Vinay Abrol, LTIP awards were exercised on 7 July 2023. The market value of:
• John Ions share options on the date of exercise were £149,445 (23,027 share options at 649p per share); and
• Vinay Abrol share options on the date of exercise were £98,479 (15,174 share options at 649p per share).
The exercise price for the LTIP awards was nil pence. The exercised shares are subject to a two-year holding period from the
date of vest.
3.2 LTIP Awards for the financial year ending 31 March 2024 (audited information)
The Company’s shareholders approved the LTIP under which awards were granted on 12 August 2019 and the LTIP was adopted
by the Board on 21 March 2016, and subsequently amended on 25 September 2018 and 19 June 2019. 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 2024
Percentage LTIP
award of base
remuneration
LTIP awards
granted
Value on grant
Date of grant
Vesting date (subject to
performance conditions
being met)
John Ions
197%
153,130
£1,152,303
22 June 2023
22 June 2026
Vinay Abrol
190%
112,295
£845,020
22 June 2023
22 June 2026
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LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
On vesting 100% of the LTIP awards are subject to a two-year holding period, with the post vesting releases subject to continued
employment.
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): 100.95p for the financial year ending 31 March 2023. End of
the performance period is 31 March 2026.
Performance will be assessed against the following targets:
EPS
Vesting (% of maximum)
Entry level performance: 8.5%
10%
Target performance: 11%
50%
Stretch performance: 16.75%
100%
There will be straight line vesting between targets. 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 p.a. versus FTSE250
Vesting (% of maximum)
Entry level performance: median performance
10%
Stretch performance: upper quintile performance
100%
There will be straight line vesting between targets.
4. PROPOSED REMUNERATION FOR THE FINANCIAL YEAR ENDING 31 MARCH 2025
Remuneration for the year ended 31 March 2025 has been set in accordance with the 2022 DRP approved by shareholders at
the February GM in 2022.
4.1 Annual fixed remuneration
Fixed remuneration under the current 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 and taking into account the financial performance of the Group over
the year, the Committee resolved not to increase base pay for the Executive Directors for the next year. Therefore, the Committee
has set the salary of the Executive Directors at £583,600 for John Ions and £445,600 for the Vinay Abrol. The salary increases
for employees and members (excluding fund managers and the Executive Directors) is 5.8% on average and is focused on our
less senior colleagues. 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 latest DRP the Board 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 base Non-executive Chairman fee increased to £210,000 and the base Non-executive
Director fee were increased to £65,000 plus fees for other roles as noted below. The Non-executive Chairman’s aggregate fee is
capped at £210,000 (increase from £200,000) and hence the Chairman waives any other fees for other roles and committees
that would otherwise be payable. Other Non-executive Directors aggregate fees are capped at £150,000.
Role
Fee
Senior independent director
£12,000
Audit & Risk Committee chair / member
£20,000 / £9,000
Nomination Committee chair / member
£15,000 / £5,000
Remuneration Committee chair / member
£20,000 / £9,000
Other committees
£9,000
Sustainability committee chair/ member
£12,000/£5,000
Engagement roles
£5,000 to £7,500
Non-executive Directors will be encouraged to use a percentage of their annual fee to purchase and hold shares in Liontrust.
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FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT
4.2 Annual bonus
Annual bonus for the financial year ending 31 March 2025 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 70%. 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 2025 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 2024 to 31 March
2027 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): 74.82p for the financial year ending 31 March 2024. End of
the performance period is the financial year ending 31 March 2027.
Performance will be assessed against the following targets:
EPS growth p.a.
Vesting (% of maximum)
Entry level performance: 8.5%
10%
Target performance: 11%
50%
Stretch performance: 16.75%
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
10%
Stretch performance: upper quintile performance
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.
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STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
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 2014. 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.
1,200%
1,000%
800%
600%
400%
200%
0%
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
Liontrust Asset Management PLC
FTSE All-Share Index
FTSE 250
Table of historic levels of Chief Executive Officer remuneration
The table below shows the percentage change in the Chief Executive’s remuneration package over the past ten years:
Year ended
31 Mar
Name
Single figure of total
remuneration (£’000)
Long term incentive vesting rates (as
% maximum opportunity)
2024
John Ions
1,367
37%
2023
John Ions
1,933
58%
2022
John Ions
6,014
99%
2021
John Ions
6,648
100%
2020
John Ions
4,555
100%
2019
John Ions
4,419
100%
2018
John Ions
2,191
Nil
2017
John Ions
1,751
Nil
2016
John Ions
1,572
Nil
2015
John Ions
1,544
Nil
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FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT
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 2024 the Executive Directors and their closely associated persons held:
Executive Directors
Ordinary shares held
Vested but
unexercised options
Value at 31 Mar 2024
(£’000)
Multiple of salary
John Ions
879,001
–
5,907
10x
Vinay Abrol
988,253
–
6,641
15x
The value of the vested but unexercised options is after income tax and national insurance using basic salaries as at 1 April 2024.
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 2024 were
as follows:
Ordinary shares
Unvested
Ordinary
shares
Total
Ordinary
shares
Options subject
to perf. conditions
Total options over
Ordinary shares
Executive Directors
John Ions
877,321
1,680
879,001
359,649
359,649
Vinay Abrol
986,573
1,680
988,253
259,772
259,772
Non-executive
Directors
Alastair Barbour
34,175
–
34,175
–
–
Mandy Donald
1,579
–
1,579
–
–
Rebecca Shelley
1,544
–
1,544
–
–
George Yeandle
20,000
–
20,000
–
–
There were the following changes to the Directors’ interests between 1 April 2024 and 25 June 2024:
John Ions and Vinay Abrol purchased 777 shares on 8 April 2024 pursuant to their participation in the Liontrust SIP. There were
no other charges.
SIP Shares (audited information)
Awards held start of year
Awards held at the
end of the year
Director
Tax year
Number of
shares as at
1 Apr 2023
Face
value
Grant/Vesting
date
Number of
shares
granted/
(vested)
Number of
shares as at
31 Mar 2024
Earliest
vesting date
John Ions
2020/21
336
£3,600
27-Apr-20
(336)
–
27-Apr-23
2021/22
345
£3,600
345
4-May-24
2022/23
468
£3,600
468
27-Apr-25
2023/24
–
£3,600
3-Aug-23
867
867
3-Aug-26
Vinay Abrol
2020/21
336
£3,600
27-Apr-20
(336)
–
27-Apr-23
2021/22
345
£3,600
345
4-May-24
2022/23
468
£3,600
468
27-Apr-25
2023/24
–
£3,600
3-Aug-23
867
867
3-Aug-26
The vesting of SIP shares awarded are subject to continuous performance and claw back conditions. Vested shares may remain
in the SIP after vesting
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STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
6.3 Post-employment shareholding requirements
The Executive Directors are 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) (Stepped down as Chair of
Committee on 1 April 2024)
• Mandy Donald
• Alastair Barbour
• Rebecca Shelley
• Miriam Greenwood OBE DL (joined on 16 November 2023
and appointed Chair of the Committee on 1 April 2024)
The attendance record of members of the Committee during
the year is shown in the table on page 80.
Activities during the year
In the financial year to 31 March 2024, the Committee met
seven times and discussed, amongst other things, the subjects
described below:
• approval of the 2023 Remuneration Report;
• review and approval of the bonuses for the Executive
Directors for the financial year ended 31 March 2023;
• review and approval of the bonuses for the employees and
members (excluding the Executive Directors) for the financial
year ended 31 March 2023;
• 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 August 2023;
• approval granting of DBVAP awards for the financial year
ended 31 March 2023;
• review and approval of the Bonus Methodology, deferral
methodology and Metrics for the financial year ending 31
March 2024;
• approval of LTIP allocation for the financial year ending 31
March 2024 for the Executive Directors and key executives;
• reviewing regular reports from HR and Compliance;
• approval of the vesting of the 2021 LTIPs granted in June
2020;
• review of proxy voting agency and shareholder comments
on the Remuneration report for 2023;
• review of DRP, consideration potential options for new DRP
noting the feedback received on the current DRP and review
of shareholder engagement materials;
• engagement with shareholders and proxy advisors on the
new DRP;
• review of bonus/remuneration capping and bonus
performance metrics for the year ended 31 March 2024;
• review of the bonus methodology, related Executive Director
remuneration and market practices on Executive Director
remuneration; and
• approval of Director, employee and member appraisal
process for the financial year ended 31 March 2024.
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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 January 2014
6 months
LLP membership deed of adherence
08 July 2010
6 months
Vinay Abrol
Director Letter of appointment
23 January 2014
12 months
LLP membership deed of adherence
08 July 2010
12 months
Non-executive Directors
Alastair Barbour1
Director Letter of appointment
19 November 2019
3 months
Mandy Donald
Director Letter of appointment
18 July 2019
3 months
Miriam Greenwood
Director Letter of appointment
15 November 2023
3 months
Rebecca Shelley
Director Letter of appointment
12 October 2021
3 months
George Yeandle
Director Letter of appointment
16 December 2014
3 months
1Alastair joined the Board in April 2011 and was appointed Non-executive Chair in September 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 2024 (2023: 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 EBT) to reduce and manage
dilution.
The EBT 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 EBT 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 CSOP are satisfied by market purchased shares,
so have no dilutive effect.
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STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
7.6 Shareholder voting outcomes for 2023 Directors’ Remuneration Report
The table below shows the advisory vote on the 2023 Directors’ Remuneration Report at the Annual General Meeting held on 22
September 2023:
Votes for
%
Votes against
%
Votes withheld
2023 Annual report on
remuneration
26,969,791
80.20%
6,657,628
19.80%
1,016,350
7.7 Shareholder voting outcomes for 2022 Directors’ Remuneration Policy
The table below shows the advisory vote on the 2022 Directors’ Remuneration Policy (DRP) at the Annual General Meeting held
on 16 February 2022:
Votes for
%
Votes against
%
Votes withheld
Directors’ remuneration
policy
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 Officer, the Chief Financial Officer and the
Group Company Secretary.
In the performance of its duties, the Committee can seek assistance from external advisers. At the March 2024 meeting of the
Committee the approved the appointment of PricewaterhouseCoopers LLP to support the Committee on the new DRP.
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 MIFIDPRU,, UCITs and AIFM remuneration codes and the Committee
ensured these were appropriately reflected in the Remuneration Policy and adhered to on an ongoing basis.
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7.10 Historical Information
LTIP Awards (audited information)
Directors
Financial year
ended 31-Mar
Face value
Share
price
used to
determine
the award
Number of
options
held
at 1 Apr
2023
Options
forfeit
Options
granted
or exercised
Number of
options
held at
31 March
2024
Exercise
Price
Date of
grant
End of
performance
period
John Ions
2019
(in respect of
2019/20/21)
£870,250
589.6p
29,279
(29,279)
–
Nil
26-Jun-18
26-Jun-21
2021
(in respect of
2021/22/23)
£870,250
1410.0p
61,719
(38,692)
(23,027)
–
Nil
8-Jul-20
8-Jul-23
2022
(in respect of
2022/23/24)
£870,250
1630.0p
53,389
–
53,389
Nil
23-Jun-21
23-Jun-24
2023
(in respect of
2023/24/25)
£1,439,000
940.0p
153,130
153,130
153,130
Nil
23-Jun-22
23-Jun-25
2024
(in respect of
2024/25/26)
£1,152,303
752.5p
–
153,130
153,130
Nil
22-Jun-23
22-Jun-26
Vinay
Abrol
2019
(in respect of
2019/20/21)
£573,475
589.6p
19,294
(19,294)
–
Nil
26-Jun-18
26-Jun-21
2021
(in respect of
2021/21/23)
£573,475
1410.0p
40,671
(25,497)
(15,174)
–
Nil
8-Jul-20
8-Jul-23
2022
(in respect of
2022/23/24)
£573,475
1630.0p
35,182
–
35,182
Nil
23-Jun-21
23-Jun-24
2023
(in respect of
2023/24/25)
£1,056,000
940.0p
112,295
–
112,295
Nil
23-Jun-22
23-Jun-25
2024
(in respect of
2024/25/26)
£845,020
752.5p
–
112,295
112,295
Nil
22-Jun-23
22-Jun-26
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.
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STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
LTIP Performance Conditions
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.
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 2024. Actual target for net inflows are commercially
sensitive and will disclosed after vesting in 2024
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 2024.
Performance condition 3 (7.5%): Other strategic targets:
Required outcome: Actual target for other strategic objectives
are commercially sensitive and will disclosed after vesting
in the 2025 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.
Financial year ended 31 March 2023 (in respect of
2023/24/25) granted 23 June 2022:
Performance conditions as per section 4.3 (page 133)
Details of the awards granted on 22 June 2023 for the
financial year ended 31 March 2024 are on page 131.
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DBVAP Share Options, Shares and Options over Group managed funds (audited information)
Directors
Financial year
ended 31-Mar
Basis of award
% of annual bonus
Face value
Issue date
Exercise dates
John Ions
2021
(in respect of 2020)
80%
£1,392,000
8 July 2020
8 July 2021/22/23
2022
(in respect of 2021)
69%
£1,915,000
23 June 2021
23 June 2022/23/24
2023
(in respect of 2022)
69%
£1,915,000
22 June 2022
22 June 2023/24/25
2024
(in respect of 2023)
50%
£310,000
22 June 2023
22 June 2024/25/26
Vinay Abrol
2021
(in respect of 2020)
80%
£786,000
8 July 2020
8 July 2021/22/23
2022
(in respect of 2021)
69%
£1,085,000
23 June 2021
23 June 2022/23/24
2023
(in respect of 2022)
50%
£786,000
22 June 2022
22 June 2023/24/25
2024
(in respect of 2022)
50%
£184,000
22 June 2023
22 June 2024/25/26
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 Remuneration Committee. A minimum of 50% of the
annual bonus is deferred into the DBP scheme with higher levels of deferral at the discretion of the Remuneration Committee. No
further performance conditions apply to DBP 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.
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8. DIRECTORS’ REMUNERATION POLICY APPLICABLE TO 31 MARCH 2025
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 GM 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
Base salary
To provide a satisfactory base salary within a total
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
designed to attract and retain talent in the market in
which the individual is employed and/or a member.
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.
Annual bonus
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 Remuneration 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.
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Maximum opportunity
Performance measures and assessment
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.
Chief Executive Officer: Maximum award is 450% of base salary.
CFO: Maximum award is 350% of base salary.
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.
144
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
Objective and Link to strategy
Operation
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.
LTIP awards are granted annually as an option over
a fixed number of shares with vesting dependent on
the achievement of stretching performance conditions.
Performance is measured over a 3-year period.
Shares received on or after vesting are subject to a 2-year
holding period commencing on the date of vesting.
The operation of the LTIP is reviewed annually to ensure
that grant levels, performance measures and other features
remain appropriate to the Company’s current circumstances.
Dividend equivalents may be awarded on vested shares in
respect of dividends paid during the vesting and holding
period.
Shareholding
requirement
The shareholding requirement aligns the interests of
Executive Directors with those of shareholders.
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.
The employee shareholding requirement is 500% of base
salary for all Executive Directors.
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.
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.
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.
Benefits
To provide benefits which are appropriately competitive.
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.
Pension
To provide competitive levels of retirement benefit aligned
with the wider workforce.
Executive Directors’ pension contributions are made at
12.5% of base salary into the Liontrust Group Pension Plan.
Executive Directors have the choice of taking an equivalent
cash payment in lieu of pension contributions.
145
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT
Maximum opportunity
Performance measures and assessment
The maximum number of shares subject to the three annual LTIP
awards which may be granted under this Policy is:
For the Chief Executive Officer, 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, 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.
Not applicable.
Not applicable.
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.
The maximum percentage that the Executive Directors can receive
as a pension contribution or cash equivalent payment is 12.5% of
base salary.
Not applicable.
146
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
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:
Objective and Link
to strategy
Operation
Maximum opportunity
Performance measures
and assessment
Fees
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.
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.
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.
Not applicable.
George Yeandle
Chair of the Remuneration Committee (to 31 March 2024)
Miriam Greenwood OBE DL
Chair of the Remuneration Committee (from 1 April 2024)
25 June 2024
FINANCIAL
STATEMENTS
Consolidated Statement of Comprehensive Income
148
Consolidated Balance Sheet
149
Consolidated Cash Flow Statement
150
Consolidated Statement of Changes in Equity
151
Notes to the Financial Statements
152
Liontrust Asset Management Plc Financial Statements
186
Liontrust Asset Management Plc Notes to the
Financial Statements
189
Independent auditor’s report to the members of Liontrust
Asset Management PLC
194
Shareholder Information
201
Glossary
202
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the year ended 31 March 2024
Note
Year ended
31-Mar-24
£’000
Year ended
31-Mar-23
£’000
Revenue
4
197,889
243,339
Cost of sales
4
(11,828)
(13,569)
Gross profit
186,061
229,770
Gain on write back of Majedie acquisition provision
–
1,848
Realised profit on sale of financial assets
184
–
Unrealised gain on financial assets
838
618
Administration expenses
5
(188,932)
(183,210)
Operating (loss) / profit
6
(1,849)
49,026
Interest receivable
8
1,337
358
Interest payable
16
(67)
(83)
(Loss) / profit before tax
(579)
49,301
Taxation
10
(2,911)
(9,973)
(Loss) / profit for the year
(3,490)
39,328
Other comprehensive income:
Total comprehensive income
(3,490)
39,328
Pence
Pence
Earnings per share
Basic earnings per share
12
(5.46)
61.45
Diluted earnings per share
12
(5.46)
61.21
The notes on pages 152 to 185 form an integral part of these consolidated financial statements.
148
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
CONSOLIDATED BALANCE SHEET
As at 31 March 2024
Note
As at
31-Mar-24
£’000
As at
31-Mar-23
£’000
Assets
Non current assets
Intangible assets
15
48,472
90,629
Goodwill
14
32,110
38,586
Property, plant and equipment
16
3,719
3,378
Total non current assets
84,301
132,593
Current assets
Trade and other receivables
17
229,586
241,682
Financial assets
18
8,157
9,921
Cash and cash equivalents
1i
104,318
121,037
Total current assets
342,061
372,640
Liabilities
Non current liabilities
Deferred tax liability
11
(11,227)
(21,493)
Lease liability
16
(2,538)
(2,168)
Total non current liabilities
(13,765)
(23,661)
Current liabilities
Trade and other payables
19
(241,363)
(255,460)
Corporation tax payable
–
(5,131)
Total current liabilities
(241,363)
(260,591)
Net current assets
100,698
112,049
Net assets
171,234
220,981
Shareholders’ equity
Ordinary shares
20
648
648
Share premium
–
112,510
Capital redemption reserve
19
19
Retained earnings
183,461
121,341
Own shares held
22
(12,894)
(13,537)
Total equity
171,234
220,981
The notes on pages 152 to 185 form an integral part of these consolidated financial statements.
The financial statements on pages 148 to 185 were approved and authorised for issue by the Board of Directors on 25 June 2024
and signed on its behalf by V.K. Abrol, Chief Financial Officer.
Company Number 2954692
149
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT
CONSOLIDATED CASH FLOW STATEMENT
for the year ended 31 March 2024
Note
As at
31-Mar-24
£’000
As at
31-Mar-23
£’000
Cash flows from operating activities
Cash received from operations
178,771
236,362
Cash paid in respect of operations
(134,636)
(174,437)
Net cash generated from changes in unit trust receivables and payables
1,197
(1,387)
Net cash generated from operations
45,332
60,538
Interest received
1,432
358
Tax paid
(18,558)
(17,479)
Net cash generated from operating activities
28,206
43,417
Cash flows from investing activities
Purchase of property and equipment
(142)
(253)
Acquisition of Majedie net of cash acquired
–
13,596
Loan to GAM
(8,900)
–
Loan repaid by GAM
8,900
–
Gain on liquidation of Architas
–
827
Purchase of DBVAP Financial Asset
(1,493)
(2,701)
Sale DBVAP Financial Asset
4,348
–
Purchase of Seeding investments
(328)
(2,193)
Sale of Seeding investments
371
1,990
Net cash generated from investing activities
2,756
11,266
Cash flows from financing activities
Payment of lease liabilities
(1,525)
(1,328)
Purchase of own shares
–
(7,100)
Dividends paid
(46,156)
(46,070)
Net cash used in financing activities
(47,681)
(54,498)
Net (decrease) / increase in cash and cash equivalents*
(16,719)
185
Opening cash and cash equivalents*
121,037
120,852
Closing cash and cash equivalents*
104,318
121,037
*Cash and cash equivalents consist only of cash balances.
The notes on pages 152 to 185 form an integral part of these consolidated financial statements.
150
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 31 March 2024
Note
Ordinary
shares
£ ‘000
Share
premium
£ ‘000
Capital
redemption
£ ‘000
Retained
earnings
£ ‘000
Own
shares held
£ ‘000
Total
Equity
£ ‘000
Balance at 1 April 2023 brought forward
648
112,510
19
121,341
(13,537)
220,981
Loss for the year
–
–
–
(3,490)
–
(3,490)
Total comprehensive income for the year
–
–
–
(3,490)
–
(3,490)
Dividends paid
9
–
–
–
(46,156)
–
(46,156)
Cancellation of share premium account
20
–
(112,510)
–
112,510
–
–
Purchase of own shares
–
–
–
–
(381)
(381)
Sale of own shares
Sale of own shares
–
–
–
(1,024)
(1,024)
1,024
1,024
–
Members share incentive award exercises
–
–
–
(385)
–
(385)
Equity share options issued
23
–
–
–
665
–
665
Balance at 31 March 2024
648
–
19
183,461
(12,894)
171,234
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 31 March 2023
Note
Ordinary
shares
£ ‘000
Share
premium
£ ‘000
Capital
redemption
£ ‘000
Retained
earnings
£ ‘000
Own
shares held
£ ‘000
Total
Equity
£ ‘000
Balance at 1 April 2022 brought forward
612
64,370
19
128,859
(9,692)
184,168
Profit for the year
–
–
–
39,328
–
39,328
Total comprehensive income for the year
–
–
–
39,328
–
39,328
Dividends paid
9
–
–
–
(46,070)
–
(46,070)
Shares issued
20
36
48,140
–
–
–
48,176
Purchase of own shares
–
–
–
–
(7,100)
(7,100)
Sale of own shares
–
–
–
(2,692)
3,255
563
Equity share options issued
23
–
–
–
1,916
–
1,916
Balance at 31 March 2023
648
112,510
19
121,341
(13,537)
220,981
The notes on pages 152 to 185 form an integral part of these consolidated financial statements.
151
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT
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 2024. 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 93) 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 Group and
parent 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.
Within our reasonable plausible downside, we do not consider
the impact of investor sentiment on ESG factors from the climate
targets detailed within the responsible capitalism on page 62
to 63 to be a material risk in the medium and long term and
therefore have not considered these risks in the reasonable
plausible downside scenarios.
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 the 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.
Subsidiaries’ exemption from audit by parental guarantee
The Company has provided a parental guarantee under section
479C of the Companies Act (2006) over the outstanding
liabilities of some of its subsidiaries as at 31 March 2024 until
they are settled in full. The subsidiaries covered by the parental
guarantee are exempt from the requirements of the Companies
Act (2006) relating to the audit of their individual accounts
in accordance with section 479A. The guarantee covers the
following of the Company’s wholly-owned subsidiaries:
• Liontrust Investment Services Limited
• Liontrust Investment Funds Limited
• Liontrust Investment Management Ltd
This parental guarantee was not provided in the prior year.
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. There are no significant
judgements. The Directors make a number of estimates, these
152
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STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
include leases (note k) and share based payments (note p),
neither of which are considered to be significant. In addition,
the Directors make significant 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
(“Majedie”) on 1st April 2022
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 noncontrolling 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 notes 13, 14 and 15.
(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 and 15).
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 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 straightline 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 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). Although in the year there were
net outflows, it was not considered significant enough to trigger
an indicator of impairment for ATI and Neptune.
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. All receivable are current
and there is limited (or no history) of credit losses and therefore
the Group believe any ECL would not be material. 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,
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FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT
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STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
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 trust, 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
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 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 price. 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 ROU 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.
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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.
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.
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 142.
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.
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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.
p) Employee share options and Member incentive awards
The Group operates a number of equity-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, 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. 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 (‘eLTIP’) and Liontrust
Members Long Term Incentive Plan (‘mLTIP’) 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
eLTIP and mLTIP with non-market based performance conditions
attached; Liontrust Company Share Option Plan (CSOP) and
Save As You Earn (SAYE) scheme:
• 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), or set at
the time of issue of the award for CSOP awards and SAYE
options;
• the eLTIP/mLTIP awards are expected to be exercised at the
point they become exercisable;
• the CSOP awards are estimated to be exercised at the
midpoint between vest (3 years) and lapse (10 years);
• the SAYE options are expected to exercised at the point they
become exercisable;
• 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 awards as dividend
equivalents are paid on vesting of these awards; and
• dividend yield estimated based on the current expectation
and history of dividends paid for CSOP and SAYE awards.
Based on historic experience, no reduction in the expense has
been taken for expected award lapses from staff leaving the
Group.
q) Dividends
Dividends are recognised as a reduction in equity in the period
in which they are paid or in the case of final dividends when
they are approved by shareholders. The reduction in equity in
the Period therefore comprises the prior Period final dividend
and the current Period interim.
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 are presented as a Loan to
EBT.
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FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT
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 28 to 31 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 or loss).
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 shares 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 £307,000 (2023: £280,700). 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
£509,000 (2023: £711,000).
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 cause a £978,000
increase or a decrease to nil in interest receivable (2023:
£1,154,000 increase or decrease to nil).
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LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
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.
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 £17,000 (2023: £13,000).
Sterling vs. US Dollar – a movement of 10% would lead to a
movement of less than £23,000 (2023: less than £4,000).
In respect of Income receivable in Euro a 10% movement in
the exchange rate would result in a movement of £57,000
(2023: £559,782) 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 £19,000
(2023: £262,169) 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-24
£’000
31-Mar-23
£’000
Cash and cash equivalents
104,318
121,037
Trade receivables
229,578
241,682
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.
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LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT
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 2024
Due
within 3
months
£’000
Due between
3 months
and one year
£’000
Due in
over one year
£’000
Payables
237,482
–
2,308
As at 31 March 2023
Due
within 3
months
£’000
Due between
3 months
and one year
£’000
Due in
over one year
£’000
Payables
255,460
–
2,168
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 may 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 regulated legal entities. The FCA imposes prescribed minimum capital requirements and
requires firms to access whether additional capital above the minimum requirement is needed for each entity along with any Group
risks to ensure sufficient capital is in-place to accommodate the potential impact of any risk that may cause harm to our clients, the
market and/or to Liontrust.
The minimum capital requirement is calculated based on the regulatory entitlements/classification of each entity. Liontrust Investment
Partners, LLP is subject to the Investment Firm Prudential Regime (IFPR) and the FCA’s MIFIDPRU handbook whereby the minimum capital
requirement is the highest of the following: 1) the Permanent Minimum Requirement (PMR); 2) the K-factor Requirement (prescribed
coefficients / risk scores on key business metrics such as AUM and daily trading flow); and 3) the Fixed Overhead Ratio (FOR)
Requirement. Liontrust Fund Partners, LLP is subject to IPRU-INV which the minimum capital requirement is the highest of the following:
1) the Funds Under Management (FUM) Requirement and 2) the Fixed Overhead Ratio (FOR) requirement, plus applicable cover for
professional liability risks.
Additional capital requirements are assessed specific to each firm along with any Group risks that may cause harm. Additional capital
requirements also quantifies the cost of a wind-down to ensure sufficient capital above the minimum is available should any material
risks occur during the course of normal operations or in the event of a wind-down. Liontrust performs this additional capital requirement
assessment every September – and more frequently if any material change to the regulated entities and/or the Group – in the Internal
Capital Adequacy and Risk Assessment (ICARA) process. 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. The assessment draws upon the results of our risk
management controls and includes scenario analysis and stress testing that considers each regulated entity and the Group’s exposure
to extreme events in addition to any mitigating actions. The capital requirement for Liontrust as of 31 March, 2023 is £26.8m (based
on the 2023 ICARA) and is estimated to reduce to £22.8 million as at 31 March, 2024 in our 2024 ICARA given AuMA for the
Group is lower than the previous fiscal year.
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LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
The preparation of the 2023 ICARA and subsequent periodic capital adequacy reviews throughout the year was managed by
the Chief Risk Officer alongside the Chief Executive Officer 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 2024, the Group has regulatory capital (own funds) resources of £101.9 million (2023: £113.3million),
significantly in excess of the capital requirement for Liontrust. The regulatory capital is all comprised of common equity tier 1 capital
such as retained earnings and ordinary shares line items on the balance sheet. During the period, the subsidiary entities and the
Group complied with all regulatory capital requirements each entity is subject to. The table below illustrates the composition of
regulatory capital (own funds) resources. Liontrust Investment Partners, LLP is required to disclosure its regulatory capital information
which will be available on the Group’s website www.liontrust.co.uk/regulatory.
Composition of Regulatory Capital
Item
Amount (GBP
thousands)
Source based on reference numbers/letters of the
balance sheet in the audited statements
1
OWN FUNDS
101,879
2
TIER 1 CAPITAL
101,879
3
COMMON EQUITY TIER 1 CAPITAL
184,129
4
Fully paid up capital instruments
648
Ordinary shares
5
Share premium
–
Share premium
6
Retained earnings
183,461
Retained earnings
7
Accumulated other comprehensive income
–
8
Other reserves
19
Capital redemption reserve
9
Adjustments to CET1 due to prudential filters
–
10
Other funds
–
11
(-)TOTAL DEDUCTIONS FROM COMMON EQUITY TIER 1
82,249
Intangible assets, Goodwill, Own shares
held, and Deferred tax liabilities
19
CET1: Other capital elements, deductions and adjustments
–
20
ADDITIONAL TIER 1 CAPITAL
–
21
Fully paid up, directly issued capital instruments
–
22
Share premium
–
23
(-) TOTAL DEDUCTIONS FROM ADDITIONAL TIER 1
–
24
Additional Tier 1: Other capital elements, deductions and adjustments
–
25
TIER 2 CAPITAL
–
26
Fully paid up, directly issued capital instruments
–
27
Share premium
–
28
(-) TOTAL DEDUCTIONS FROM TIER 2
–
29
Tier 2: Other capital elements, deductions and adjustments
–
The table on the next page reconciles the composition of regulatory capital in the table above to the audited balance sheet of this report.
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FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT
Own funds: reconciliation of regulatory own funds to balance sheet in the audited financial statements
Figures below are in GBP thousands unless noted otherwise
Item
Balance sheet as in
published / audited financial
statements 31-Mar-24
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
48,472
Line 11
Goodwill
32,110
Line 11
Property, plant and equipment
3,719
Trade and other receivables
229,586
Financial assets
8,157
Cash and cash equivalents
104,318
Total Assets
426,362
Liabilities – Breakdown by liability classes according to the balance sheet in the audited financial statements
Deferred tax liability
(11,227)
Line 11
Lease liability
(2,538)
Trade and other payables
(241,363)
Total Liabilities
(255,128)
Shareholders’ Equity – Breakdown by shareholders’ equity classes according to the balance sheet in the audited financial statements
Ordinary shares
648
Line 4
Share premium
–
Line 5
Retained earnings
183,461
Line 6
Capital redemption reserve
19
Line 8
Own shares held
(12,894)
Line 11
Total Shareholders' Equity
171,234
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
Year ended
31-Mar-24
£’000
Year ended
31-Mar-23
£’000
United Kingdom
189,105
226,267
Europe (ex UK)
8,598
16,854
Canada
16
21
Australia
170
197
197,889
243,339
During the year ended 31 March 2024 the Group had no customer contributing more than 10% of total revenue (2023: £25,043K)
162
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
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.
Year ended
31-Mar-24
£’000
Year ended
31-Mar-23
£’000
Management fee and other revenue
187,480
224,855
Performance fee revenue
10,409
18,484
Revenue
197,889
243,339
Cost of sales
(11,828)
(13,569)
Gross profit
186,061
229,770
Gross Profit excluding Performance fee revenues
175,652
211,286
Average AuMA (£m)
28,330
33,815
Revenue margin (%)
0.620%
0.625%
Revenue from customers includes:
• Investment management fees on unit trusts, open-ended investment companies sub-funds, portfolios and segregated accounts.
• 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.
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 £10.4 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 2024 has not been recognised in the results
for the year.
163
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT
5 ADMINISTRATION EXPENSES
Year ended
31-Mar-2024
Year ended
31-Mar-2024
Year ended
31-Mar-2024
Year ended
31-Mar-2023
Year ended
31-Mar-2023
Year ended
31-Mar-2023
£’000
£’000
£’000
£’000
£’000
£’000
Fixed
Variable
Total
Fixed
Variable
Total
Staff related expenses
Wages and salaries
32,324
30,178
Fund management
4,019
6,045
10,064
5,109
2,963
8,072
Other staff
17,876
4,384
22,260
16,559
5,547
22,106
Social security costs
2,613
4,105
Fund management
331
–
331
1,300
–
1,300
Other staff
2,282
–
2,282
2,805
–
2,805
Pension costs
2,502
2,388
Fund management
457
–
457
442
–
442
Other staff
2,045
–
2,045
1,946
–
1,946
Share incentivisation expense
1,271
2,354
All staff
–
1,271
1,271
–
2,354
2,354
DBVAP expense
2,953
2,777
All staff
–
2,953
2,953
–
2,777
2,777
Severance compensation
3,198
3,995
Member related expenses
Members' drawings charged
as an expense
36,445
59,507
Fund management
3,328
29,180
32,508
14,449
35,359
49,808
Other members
2,393
1,544
3,937
5,501
4,198
9,699
Share incentivisation expense
1,040
1,225
All members
–
1,040
1,040
–
1,225
1,225
Non-staff related expenses
Professional services1
15,652
8,026
Depreciation
1,975
3,883
Intangible asset amortisation
12,094
14,793
Intangible asset and
Goodwill impairment
37,065
12,816
Other administration expenses
39,800
37,163
Total administration expenses
188,932
183,210
1Includes acquisition related and restructuring costs for past acquisitions, see table below for a detailed breakdown.
Note, Acquisition related costs relate primarily to corporate finance, sponsor, due diligence, target operating model design, Class
1 circular (as applicable) and Swiss public offer (as applicable) and legal expenses.
Year ended
31-Mar-24
£’000
Year ended
31-Mar-23
£’000
GAM acquisition related costs1
9,508
1,540
Neptune/Architas/Majedie acquisition related costs
559
5,868
Significant costs relating to target operating model restructure2
5,585
618
Total Professional services
15,652
8,026
1Liontrust attempted to acquire GAM and then remained resolute in sticking to a price that was believed to be fair for the value of
the business, recognising the costs it would have entailed and decided to not to acquire the company.
2See page 20 for further details on Liontrust Asset Management PLC plan on the target operating model.
164
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
Year ended
31-Mar-24
£’000
Year ended
31-Mar-23
£’000
Share incentivisation expense
- Share option expense employees
398
1,485
- Share option NIC expense
169
175
- Share incentive plan expense
475
455
- Share plan administration expenses
229
239
1,271
2,354
- Share option expense members
1,040
1,225
2,311
3,579
The average number of staff of the Group (as calculated on a weighted average basis over the year), excluding Non-executive
Directors, was 235 (2023: 247). All staff are involved in the investment management business of the Group.
Average number of staff during the year
Year ended
31-Mar-24
£’000
Year ended
31-Mar-23
£’000
Investment management
56
57
Management and operations
110
120
Sales and Marketing
69
70
Non-executive Directors
5
6
240
253
6 OPERATING PROFIT
Year ended
31-Mar-24
£’000
Year ended
31-Mar-23
£’000
The following items have been included in arriving at operating profit:
Foreign exchange (losses)/gains
(109)
(192)
Depreciation
1,975
3,883
Amortisation of intangible asset
12,094
14,792
Impairment of intangible asset and goodwill
37,065
12,816
Costs relating to Directors and staff (Note 5)
77,111
106,530
Auditors remuneration:
Fees payable to the Company’s auditors and its associates for the audit of the parent Company and
consolidated financial statements
564
599
Fees payable for subsidiary audits
156
150
Fees payable to the Company's auditors and its associates for other services:
- services pursuant to legislation
241
219
- other services
54
154
The Group also pays audit fees for the funds as part of fund expenses costs, the total costs during the year amounted to £754,400
and £10,000 relating to non audit services (2023: £592,000, no non audit services).
165
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT
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 32.
Year ended
31-Mar-24
£’000
Year ended
31-Mar-23
£’000
Profit before tax
(579)
49,301
Write back of Majedie acquisition provision
–
(1,848)
Severance compensation and staff reorganisation costs1
3,198
3,995
Professional services2
15,652
8,026
Amortisation of intangible asset
12,094
14,793
Impairment of intangible asset and goodwill
37,065
12,816
Adjustments
68,009
37,782
Adjusted profit before tax
67,430
87,083
Interest receivable
(1,337)
(358)
Adjusted operating profit
66,093
86,725
1Staff redundancy, severance compensation and related legal expenses in relation to a cost reduction programme and acquisitions.
2See footnote 1 in Note 5
Adjusted earnings per share is reconciled in the tables below:
Year ended
31-Mar-24
pence
Year ended
31-Mar-23
pence
Basic earnings per share
(5.46)
61.45
Adjustments:
Taxation
4.56
15.58
Write back of Majade acquisition provision
–
(2.89)
Severance compensation1
5.01
6.24
Professional services2
24.50
12.54
Amortisation of intangible asset
18.93
23.11
Impairment of intangible asset and goodwill
58.03
20.03
Adjustments:
111.03
74.61
Taxation at 25%
(26.39)
(25.85)
Adjusted basic earnings per share
79.18
110.21
Performance fees3
(4.34)
(8.83)
Adjusted basic earnings per share (excluding performance fees)
74.84
101.38
1See footnote 1 above.
2See footnote 1 in Note 5.
3Performance fee revenues contribution calculated in line with operating margin of 36% (2023: 38%) and a taxation rate of 25%
(2023: 19%).
166
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
Year ended
31-Mar-24
pence
Year ended
31-Mar-23
pence
Diluted earnings per share
(5.46)
61.21
Adjustments:
Taxation
4.56
15.52
Write back of Majade acquisition provision
–
(2.88)
Severance compensation1
5.01
6.22
Professional services2
24.49
12.49
Amortisation of intangible asset
18.93
23.02
Impairment of intangible asset and goodwill
58.01
19.95
Adjustments:
111.0
74.32
Taxation at 25%
(26.38)
(25.75)
Adjusted diluted earnings per share
79.16
109.78
Performance fees3
(4.34)
(8.80)
Adjusted diluted earnings per share (excluding performance fees)
74.82
100.98
£’000
£’000
Adjusted operating profit
66,093
86,724
Gross profit
186,061
229,770
Adjusted operating margin
35.5%
37.7%
1See footnote 1 on the previous page.
2See footnote 1 in Note 5.
3Performance fee revenues contribution calculated in line with operating margin of 36% (2023: 38%) and a taxation rate of 25%
(2023: 19%).
167
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT
168
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
STRATEGIC REPORT GOVERNANCE 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% (2023: 1.2%).
9 DIVIDENDS
Year ended
31-Mar-24
£’000
Year ended
31-Mar-23
£’000
Ordinary Shares
Prior year second interim 50 pence per share (2023: 50 pence)
31,922
32,000
Dividend equivalent paid on exercise of options
176
–
First interim at 22 pence per share (2023: 22 pence)
14,058
14,070
Total
46,156
46,070
In addition, the Directors are proposing a second interim dividend in respect of the financial year ending 31 March 2024 of 50p
per share which will absorb an estimated £31.9m of shareholders’ funds. It will be paid on 4 August 2024 to shareholders who
are on the register of members at 5 July 2024, with shares going ex-dividend on 4 July 2024.
10 TAXATION
Year ended
31-Mar-24
£’000
Year ended
31-Mar-23
£’000
(a) Analysis of charge in year
Current tax:
UK corporation tax at 25% (2023: 19%)
14,389
13,991
Adjustment in respect of prior periods
(665)
1,005
Total current tax
13,724
14,996
Deferred tax:
Deferred tax originated from timing differences
(10,266)
(5,023)
Adjustment in respect of prior periods
(547)
–
Total charge in year
2,911
9,973
(b) Factors affecting tax charge
(Loss)/Profit on ordinary activities before tax
(579)
49,301
(Loss)/Profit on ordinary activities at UK corporation tax at 25% (2023: 19%)
(145)
9,367
Effects of:
Expenses not deductible for tax purposes
2,826
421
Depreciation in excess of capital allowances
19
–
Partnership tax adjustments
–
196
Tax relief on exercise of unapproved options
876
(80)
Overseas losses not deductible
–
(429)
Other adjustments – Impairment of intangible assets
–
(653)
Income not chargeable for tax purposes
–
(351)
Write off of acquired deferred tax
–
497
Adjustment in respect of prior periods
(665)
1,005
Total taxation
2,911
9,973
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.
169
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT
11 DEFERRED TAX
Deferred tax assets
2024
£’000
2023
£’000
Balance as at 1 April
1,165
1,612
Acquired Deferred tax on Majedie Acquisition
–
497
Deferred tax on option IFRS2 charge
(274)
(447)
Deferred tax acquired LPML
–
(497)
Balance as at 31 March
891
1,165
Deferred tax liability
2024
£’000
2023
£’000
Balance as at 1 April
(22,658)
(18,213)
Deferred tax recognised on acquired intangible asset (See note 13)
–
(10,412)
Deferred tax on intangible assets
10,540
5,967
Balance as at 31 March
(12,118)
(22,658)
Net deferred tax liability
(11,227)
(21,493)
The deferred tax position as at 31 March 2024 has been calculated based on the tax rate of 25%.
The net deferred tax asset/ (liability) included in the consolidated statement of financial position is as follows:
As at
31-Mar-24
£’000
As at
31-Mar-23
£’000
Share-based payment scheme
891
1,165
Acquired intangible asset
(12,118)
(22,658)
(11,227)
(21,493)
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 63,875,440 for the year
(2023: 63,998,999). 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 2024. The adjusted weighted average number of Ordinary Shares so calculated
for the year was 63,898,351 (2023 : 64,250,561). This is reconciled to the actual weighted number of Ordinary Shares
as follows:
As at
31-Mar-24
number
As at
31-Mar-23
number
Weighted average number of Ordinary Shares
63,875,440
63,998,999
Weighted average number of dilutive Ordinary shares under option:
- to the Liontrust Long Term Incentive Plan
22,911
247,003
- to the Liontrust Option Plan
–
4,559
Adjusted weighted average number of Ordinary Shares
63,898,351
64,250,561
Details of the options outstanding at 31 March 2024 to Directors are set out in the Directors’ Remuneration Report on page 106.
170
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
STRATEGIC REPORT GOVERNANCE 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
£’000
Fair value of consideration payable:
Equity instruments (3,683,220 shares issued on completion)
48,175
Cash
4,036
Contingent consideration
1,849
Total consideration
54,060
Recognised amounts of identifiable assets acquire and liabilities assumed:
Fixed assets
90
Cash and cash equivalents
17,633
Trade and other receivables
10,650
Trade and other payables
(17,976)
Intangible assets - Investment Management contracts
27,056
Intangible assets - Segregated clients
16,010
Deferred tax liabilities
(10,412)
Goodwill
11,009
Net assets acquired
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 in the year to 31 March 2023.
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 accounts respectively).
171
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT
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”) was 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 was retested at 1 October 2023. At 1 October 2023 the AuMA of the acquired
team did not meet the threshold and the Tranche Two Consideration was not payable.
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 and net AuMA growth rate. In addition, the model uses a terminal
growth rate of 2%. 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 historical actual experience and 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.
CGU
Goodwill
2024
£’000
Goodwill
2023
£’000
Discount
Rate
2024
Discount
Rate
2023
Terminal
Growth Rate
2024
Terminal
Growth Rate
2023
Net AuMA
Growth Rate
2024
Net AuMA
Growth Rate
2023
ATI
11,873
11,873
13.00%
13.80%
2%
2%
4.5%
7%
Neptune
7,668
7,753
13.00%
13.80%
2%
2%
7.3%
5.5%
Architas
7,951
7,951
13.00%
13.80%
2%
2%
0.3%
0.2%
Majedie
4,618
11,009
13.00%
13.80%
2%
2%
2.2%
3.5%
Total
32,110
38,586
For ATI and Neptune, there were no indicators of impairment. There were indicators of impairment for both Architas and Majedie
as a result of an increase in net outflows which led to actual revenues being lower than originally forecast. Based on key
assumptions in the table, the Architas recoverable amount was £35.2m and the headroom above the carrying amount of the CGU
was £5.5m. Majedie recoverable amount was £10.6m. For Majedie, the value of the Goodwill have been tested for FY24 which
has resulted in a higher carrying value than value in use hence an impairment of £6.389 million (2023: £nil).
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 and the AuMA effective growth rate assumptions. In relation to Architas sensitivity,
changing the discount rate from 13% to 13.4% and net AuMA growth rate from 0.3% to -1.1% would lead to a reduction of
£1,231k and £1,660k respectively on the headroom and no impairment to Goodwill for both changes. The cumulative impact of
the change in discount rate and decrease net AuMA growth rate would lead to decrease in headroom by £2,816k. For Majedie
Goodwill (Funds and Segregated Clients combined) the discount rate being changed from 13% to 13.4% and the net AuMA
growth rate from 2.2% to 0.8% leads to the further impairment of Goodwill by £329k and £305k respectively. The cumulative
impact of the change in discount rate and decrease net AuMA growth rate leads to a £614k increase in impairment. Within
our reasonable plausible downside, we do not consider the impact of investor sentiment on ESG factors from the climate targets
detailed within the responsible capitalism on page 62 to be a material risk in the medium and long term to our recoverable amount
and therefore have not considered these risks in the reasonable plausible downside scenarios.
172
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
31-Mar-23
£’000
Goodwill impairment
recognised in the period
£’000
31-Mar-24
£’000
ATI - Sustainable investment team
11,873
–
11,873
Neptune – Global Equity team*
7,753
–
7,668
Architas – Multi-Asset team
7,951
–
7,951
Majedie – Global Fundamental team
11,009
(6,391)
4,618
38,586
(6,391 )
32,110
*There is a movement of £85k which does not relate to an impairment of Goodwill but a fair value adjustment of the overall
Goodwill value.
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. With the exception of new business AUM and the terminal
growth rate, the standalone intangible asset models use the same inputs as those used in assessing the recoverability of the CGUs,
outlined in note 14. The assessment made at 31 March 2024 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 2024 due to higher than expected fund outflows leading to actual revenues being lower than
originally forecast. The value of the intangible assets have therefore been tested for FY24 which has resulted in a higher carrying
value than value in use hence an impairment of the Majedie investment management contract intangible of £16.537 million
(2023: £4.016 million) and Majedie Segregated Clients intangible of £6.828 million (2023: £nil million). In 2023, Majedie
investment management contract was impaired due to higher than expected fund outflows and negative market returns leading to
actual revenues being lower than originally forecast.
For Architas, indicators of impairment were identified due to higher than expected fund outflows leading to actual revenue being
lower than originally forecast. The value of the intangible assets have therefore been tested for at half year and end of FY24 which
at half year has resulted in a higher carrying value than value in use hence an impairment of the Architas investment management
contract intangible of £7.311 million (2023: £8.800 million). There was no further impairment and headroom increased during
year end due to changes in certain inputs including lower discount rate and higher market growth rates however, no impairment
reversal has been recognised due to continued net outflows from the underlying funds. Management continues to monitor the
performance of the asset. In 2023, Architas was impaired due to higher than expected fund outflows and negative market returns
leading to actual revenues being lower than originally forecast.
As at 31 March 2024
Description
Carrying value
year ended
31-Mar-24
Carrying value
year ended
31-Mar-23
Remaining
amortisation
period
As at
31-Mar-24
Remaining
amortisation
period
year ended
31-Mar-23
Investment management contracts acquired as part of ATI
acquisition
3,600
4,800
3 Years
4 Years
Investment management contracts acquired as part of
Neptune acquisition
17,185
19,682
5½ Years
6½ Years
Investment management contracts acquired as part of
Architas acquisition
21,674
32,793
6½ Years
7½ Years
Investment management contracts acquired as part of
Majedie acquisition - Funds
2,476
20,546
8 Years
9 Years
Investment management contracts acquired as part of
Majedie acquisition - Segregated
3,537
12,808
3 Years
4 Years
173
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT
Investment
management
contracts
2024
£’000
Segregated
clients
2024
£’000
Total
2024
£’000
Investment
management
contracts
2023
£’000
Segregated
clients
2023
£’000
Total
Investment
management
contracts
2023
£’000
Cost
Balance as at 1 April
142,169
16,010
158,179
115,113
–
115,113
Additions:
-
Additions arising on acquisition
of Majedie
–
–
–
27,056
16,010
43,066
Balance as at 31 March
142,169
16,010
158,179
142,169
16,010
158,179
Accumulated amortisation and
impairment
Balance as at 1 April
64,348
3,202
67,550
39,942
-
39,942
Amortisation for the year
9,037
2,443
11,480
11,590
3,202
14,792
Impairment for the year
23,849
6,828
30,677
12,816
-
12,816
Balance as at 31 March
97,234
12,473
109,707
64,348
3,202
67,550
Net Book Value
£’000
As at 31 March 2024
48,472
As at 31 March 2023
90,629
As at 31 March 2022
75,171
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% to 13.4% leads to £266k reduction in headroom but no impairment and changing the net AuMA growth
rate from 0.6% to -0.8% leads to £1,081k reduction in headroom but no impairment. The cumulative impact of the change in
discount rate and decrease net AuMA growth rate leads to £1,331k reduction in headroom but no impairment.
For Majedie the discount rate sensitivity applied is consistent with Architas (13% to 13.4%) leading to an increase in impairment
of £49k. Decreasing the net AuMA growth rate from 3.1% to 2.2% for the Majedie would lead to an increase in impairment of
£206k. The cumulative impact of the change in discount rate and decrease net AuMA growth rate would lead to an increase in
impairment of £252k.
Within our reasonable plausible downside, we do not consider the impact of investor sentiment on ESG factors from the climate
targets detailed within the responsible capitalism on page 62 to 63 to be a material risk in the medium and long term to our
recoverable amount and therefore have not considered these risks in the reasonable plausible downside scenarios.
16 PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment is made up of leasehold improvements, office equipment, computer equipment and ROU (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
lower of the estimated useful and the remaining lease term on straight-line basis
Office equipment
3-10 years on a straight-line basis
Computer equipment
3 years on a straight-line basis
ROU assets
lease term on a straight-line basis
174
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
STRATEGIC REPORT GOVERNANCE 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 2024
ROU
Assets
£’000
Leasehold
Improvements
£’000
Office
Equipment
£’000
Computer
Equipment
£’000
Total
£’000
Cost
As at 31 March 2023
9,243
2,022
972
2,120
14,357
Additions
2,194
1
–
140
2,334
Disposals
–
(1,729)
(743)
(1,353)
(3,825)
As at 31 March 2024
11,437
294
229
907
12,867
Accumulated depreciation
As at 31 March 2023
6,493
1,898
894
1,694
10,979
Charge for the year
1,634
54
35
252
1,975
Disposals
–
(1,710)
(743)
(1,353)
(3,806)
As at 31 March 2024
8,127
242
186
593
9,148
Net Book Value
As at 31 March 2024
3,310
52
43
314
3,719
As at 31 March 2023
2,750
124
78
426
3,378
Year to 31 March 2023
ROU
Assets
£’000
Leasehold
Improvements
£’000
Office
Equipment
£’000
Computer
Equipment
£’000
Total
£’000
Cost
As at 31 March 2022
7,962
1,107
557
1,128
10,754
Majedie acquisition
1,281
899
403
762
3,345
Additions
–
16
12
230
258
As at 31 March 2023
9,243
2,022
972
2,120
14,357
Accumulated depreciation
As at 31 March 2022
4,997
924
449
726
7,096
Majedie acquisition
495
869
368
755
2,487
Charge for the year
1,001
105
77
213
1,396
As at 31 March 2023
6,493
1,898
894
1,694
10,979
Net Book Value
As at 31 March 2023
2,750
124
78
426
3,378
As at 31 March 2022
4,717
261
72
207
5,257
Depreciation has been included in the Consolidated Statement of Comprehensive Income within administration expenses.
175
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT
Lease liability
As at
31-Mar-24
£’000
As at
31-Mar-23
£’000
Opening balance
3,588
3,667
Additions
1,955
1,306
5,543
4,973
Rent & interest charge for the year
(1,432)
(1,385)
Closing balance
4,111
3,588
Measurement of lease liability
Lease liability
As at
31-Mar-24
£’000
As at
31-Mar-23
£’000
Current
1,573
1,420
Non-current
2,538
2,168
4,111
3,588
The undiscounted cash payments that will be made until end of the lease term are as follows:
£’000
Within 1 year
1,652
Between 2 to 5 years
2,378
More than 5 years
266
Measurement of ROU asset
ROU asset
As at
31-Mar-24
£’000
As at
31-Mar-23
£’000
Office space
3,310
2,750
3,310
2,750
Depreciation on ROU asset
1,634
1,001
Finance costs
67
83
Cash outflow for leases for the year
1,525
1,328
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.
176
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
17 TRADE AND OTHER RECEIVABLES
As at
31-Mar-24
£’000
As at
31-Mar-23
£’000
Trade receivables
- Fees receivable
19,465
20,732
- Unit trust sales and cancellations
201,748
212,001
Prepayments
8,365
8,949
Corporation tax receivable
8
–
229,586
241,682
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 2024, trade receivables of £nil (2023: £nil) were past due but not impaired. ECLs 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, GF European Smaller Companies Fund,
GF European Strategic Equity Fund and 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 and The Liontrust UK Growth Fund. The gain on the fair value adjustments
during the year net of tax was £202,000 (2023: 618,000). Foreign currency assets are translated at rates of exchange ruling
at the balance sheet date.
As at 31-Mar-24
As at 31-Mar-23
Assets held at fair
value through
profit and loss
£’000
Assets held at fair
value through
profit and loss
£’000
Financial assets in Level 1
UK Authorised unit trusts & UK authorised ICVCs
5,085
7,114
Ireland Open Ended Investment company
3,072
2,807
Total Financial Assets
8,157
9,921
177
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT
19 TRADE AND OTHER PAYABLES
As at
31-Mar-24
£’000
As at
31-Mar-23
£’000
Current Liabilities
Trade payables – unit trust repurchases and creations
202,734
211,791
Other payables including taxation and social security
2,421
1,422
Lease liability
1,573
1,420
DBVAP liability
2,103
2,438
Other payables1
32,532
38,389
241,363
255,460
1Other payables includes fund expenses £3,847k (2023:£nil), management fee rebate £1,933k (2023: £1,845k) & bonus
accruals £23,156k (2023: £36,371k).
As at
31-Mar-24
£’000
As at
31-Mar-23
£’000
Non current Liabilities
Lease liability
2,538
2,168
20 ORDINARY SHARES
2024
Shares
2024
£’000
2023
Shares
2023
£’000
Allotted, called up and fully paid ordinary shares of 1 pence
As at 1 April
64,935,384
648
61,252,164
612
Issued during the year
–
–
3,683,220
36
As at 31 March
64,935,384
648
64,935,384
648
On 1 August 2023, Liontrust Asset Management PLC cancelled its share premium account in accordance with a Special Resolution
that was passed on 7 July 2023 at the General Meeting.
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 2024 are listed below and opposite.
Name of undertaking
Country of
incorporation
% held
Liontrust Investment Funds Limited*
UK1
100%
Liontrust Investment Services Limited*
UK1
100%
Liontrust Investment Management Limited*
UK1
100%
Liontrust Portfolio Management Limited*
UK1
100%
Liontrust International Luxembourg SA*
Luxembourg2
100%
GF European Strategic Equity Fund CF
Ireland3
100%
GF European Smaller Companies CF
Ireland3
100%
GF Strategic Bond Fund B5 Acc
Ireland3
100%
GF SF European Corporate Bond Fund A5
Ireland3
100%
GF SF Euro Corporate Bond CF FOUNDERACC
Ireland3
100%
178
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
Name of undertaking
Country of
incorporation
% held
GF High Yield Bond Fund A5 Dist Hdg
Ireland3
100%
GF Absolute Return Bond Fund A1 AC
Ireland3
100%
GF SF Global Growth Fund C8 GBP ACC
Ireland3
100%
GF SF Global Growth Fund A1 AC EUR Acc
Ireland3
100%
GF SF Global Growth Fund A8 AC EUR Acc
Ireland3
100%
GF SF Global Growth Fund C8 D GBP Acc
Ireland3
100%
GF SF Global Growth Fund D1 A CHF Acc
Ireland3
100%
GF SF Global Growth Fund C1 D GBP Acc
Ireland3
100%
GF SF Global Growth Fund D8 CHF Acc
Ireland3
100%
Liontrust GF Sustainable Future Multi Asset Global Fund D5 CHF ACC
Ireland3
100%
Liontrust GF International Equity Fund Class F Acc USD
Ireland3
100%
GF Sustainable Future US Growth Fd USD B5 AC
Ireland3
100%
GF Sustainable Future US Growth Fd USD B1 Acc
Ireland3
100%
GF Sustainable Future US Growth Fd EUR A5 Acc
Ireland3
100%
LT GF Pan-European Dynamic Fund AP5 Acc EUR
Ireland3
100%
LT GF Pan-European Dynamic Fund A8 Acc EUR
Ireland3
100%
LT GF Pan-European Dynamic Fund A5 Acc EUR
Ireland3
100%
LT GF Pan-European Dynamic Fund A1 Acc EUR
Ireland3
100%
Liontrust GF Pan-European Dynamic Fund CF GBP ACC
Ireland3
100%
LT GF UK Growth C8 Distribution
Ireland3
100%
Liontrust Monthly Income Bond Fund Z Gross Inc
UK
100%
Liontrust UK Growth Fund S Acc
UK
100%
Liontrust UK Growth Fund S Inc
UK
100%
Liontrust GF International Equity Fund Class F Acc
Ireland3
72%
GF US Equity Fund Class P USD
Ireland3
36%
GF SF European Corporate Bond Fund A1
Ireland3
33%
GF US Equity Fund Class B USD
Ireland3
32%
GF SF Global Growth Fund A8 EUR Dist
Ireland3
28%
GF US Equity Fund Class B
Ireland3
24%
GF Strategic Bond Fund A1 Acc
Ireland3
21%
b) The indirect related undertakings of the Company as at 31 March 2024 are listed below.
Name of undertaking
Country of
incorporation
% held
Liontrust Fund Partners LLP*
UK1
100%
Liontrust Investment Partners LLP*
UK1
100%
1Registered office: 2 Savoy Court, London, WC2R 0EZ
2Registered office: 18 Val Saint Croix, Luxembourg, L-1370
3Registered office: 1 Dockland Central, Guild Street, International Financial Services Centre, Dublin 1, Ireland
*These related undertakings are consolidated per note 1c.
179
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT
22 OWN SHARES AND OPTIONS
Shareholder Approval was given at the AGM in September 2023 for the grant of options under an HMRC registered Save As You
Earn (“SAYE”) plan. Further, approval was given at a GM 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 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 options granted under the SAYE, LTIP and CSOP, including to the Executive Directors, were as follows:
Issue Date
1 April
2023
Options
Granted
Options
Exercised
Lapsed
31 March
2024
Exercise
price
Scheme
27 June 2018
54,000
–
(54,000)
–
–
Nil
LTIP
12 August 2019
9,184
–
–
–
9,184
£7.62
CSOP
12 August 2019
5,785
–
–
(5,785)
–
Nil
LTIP
12 June 2020
19,552
–
–
(1,504)
18,048
£13.30
CSOP
8 July 2020
190,503
–
(91,063)
(99,440)
–
Nil
LTIP
23 June 2021
155,130
–
–
(11,847)
143,283
Nil
LTIP
8 July 2021
11,462
–
–
(1,563)
9,899
£19.18
CSOP
23 June 2022
390,287
–
–
(26,595)
363,692
Nil
LTIP
2 Sept 2022
50,400
–
–
(2,400)
48,000
£8.33
CSOP
22 June 2023
–
479,164
–
(61,830)
417,334
Nil
LTIP
2 August 2023
–
97,527
–
–
97,527
£6.36
CSOP
1 December 2023
–
115,979
–
–
115,979
£4.80
SAYE
Issue Date
1 April
2022
Options
Granted
Options
Exercised
Lapsed
31 March
2023
Exercise
price
Scheme
22 June 2017
75,923
–
(75,923)
–
–
Nil
LTIP
27 June 2018
108,000
–
(54,000)
–
54,000
Nil
LTIP
8 April 2019
33,173
–
–
(33,173)
–
Nil
Phantom
12 August 2019
283,621
–
(166,207)
(111,629)
5,785
Nil
LTIP
12 August 2019
24,928
–
(15,744)
–
9,184
£7.62
CSOP
8 July 2020
190,503
–
–
–
190,503
Nil
LTIP
12 June 2020
19,552
–
–
–
19,552
£13.30
CSOP
23 June 2021
155,130
–
–
–
155,130
Nil
LTIP
8 July 2021
17,193
–
–
(5,731)
11,462
£19.18
CSOP
23 June 2022
–
390,287
–
–
390,287
Nil
LTIP
2 Sept 2022
–
51,600
–
(1,200)
50,400
£8.33
CSOP
180
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
STRATEGIC REPORT GOVERNANCE 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 2023
Granted
Exercised
Lapsed
31 March
2024
Exercise
price
Scheme
22 June 2018
3,779
–
(3,779)
–
–
Nil
mLTIP
12 August 2019
28,321
–
–
(28,321)
–
Nil
mLTIP
7 July 2020
57,605
–
(34,563)
(23,042)
–
Nil
mLTIP
19 July 2021
33,700
–
–
–
33,700
Nil
mLTIP
23 June 2022
84,854
–
–
–
84,854
Nil
mLTIP
22 June 2023
–
117,139
–
–
117,139
Nil
mLTIP
Issue Date
1 April 2022
Granted
Exercised
Lapsed
31 March
2023
Exercise
price
Scheme
22 June 2017
228,926
–
(35,652)
–
193,274
Nil
mLTIP
22 June 2018
7,558
–
(3,779)
–
3,779
Nil
mLTIP
12 August 2019
94,411
–
(66,090)
–
28,321
Nil
mLTIP
7 July 2020
57,605
–
–
–
57,605
Nil
mLTIP
19 July 2021
33,700
–
–
–
33,700
Nil
mLTIP
23 June 2022
–
84,854
–
–
84,854
Nil
mLTIP
Details of the Directors’ LTIP options can be found in the Directors’ Remuneration report.
At 31 March 2024, the EBT owned 1,027,873 shares (2023: 1,146,288) at a cost of £12,893,265 (2023: £13,536,517).
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 2024 the market value of the shares was £6,907,307 (2023: £11,715,000).
181
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT
23 SHARE BASED PAYMENTS
Liontrust Asset Management PLC (“Company”, “LAM”) currently operates a number of equity-settled share-based compensation
plans under which the entity receives services from employees and members as consideration for equity-linked instruments (share
options 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 in the
Remuneration report (see page 140).
(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 awards to members with vesting, exercise and holding conditions aligned to those of the
eLTIP.
(d) The Group operates a Save As You Earn (“SAYE”) scheme which is open to all employees with more than 3 months continuous
service. This is an approved HMRC scheme and was established in October 2023. Under the SAYE, participants remaining
in the Group’s employment at the end of the three years savings period are entitled to use their savings to purchase shares in
the Company at a stated exercise price.
Number of
shares
Weighted
average
exercise price
Unvested options for the year:
Outstanding at 1 April 2023
1,195,862
Granted during year
809,809
Exercised during year
(183,405)
–
Lapsed during year
(363,627)
Outstanding at 31 March 2024
1,458,639
1.04
Exercisable at 31 March 2024
–
–
Number of
shares
Weighted
average
exercise price
Unvested options for the year:
Outstanding at 1 April 2022
1,126,620
Granted during year
526,741
Exercised during year
(417,395)
0.29
Lapsed during year
(40,104)
Outstanding at 31 March 2023
1,195,862
0.81
Exercisable at 31 March 2023
–
–
182
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
STRATEGIC REPORT GOVERNANCE 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
Inputs common to both valuation models
Plan
Valuation date
Share price at
valuation
date
Exercise price
at valuation
date
Option life
Expected
volatility
Dividend
yield
Risk free
interest rate
CSOP
3 August 2023
£6.36
£6.36
3.0 years
42.66%
11.31%
4.73%
eLTIP
22 June 2023
£7.53
£nil
3.0 years
42.23%
0.00%
4.91%
mLTIP
22 June 2023
£7.53
£nil
3.0 years
42.23%
0.00%
4.91%
SAYE
25 November 2023
£6.00
£4.80
3.0 years
38.50%
12.00%
4.52%
183
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT
Fair value conclusion
Plan
Number of
shares
Weighted
average fair
value £
Options granted during year to 31 March 2024:
CSOP
97,527
1.58
eLTIP
479,164
8.00
mLTIP
117,139
8.00
SAYE
115,979
1.08
809,809
18.66
Share incentivisation expense by plan type
Year ended
31-Mar-24
£’000
Year ended
31-Mar-23
£’000
Share based payment plan – equity settled
IFRS2 charge – employees
398
1,485
IFRS2 charge – members
254
431
Share based payment plan – SIP Matching
Employees
462
455
Equity share options issued
1,114
2,371
Option settlement expense
155
794
Share option NIC expense
169
175
Cost of matching SIP shares
462
455
Plan administration costs
229
239
2,129
4,034
24 RELATED PARTY TRANSACTIONS
During the year the Group received fees from unit trusts and
ICVCs under management of £166,176,739 (2023 :
£203,091,000). Transactions with these funds comprised creations
of £11,266,216,000 (2023 : £12,244,561,000) and
liquidations of £7,109,312,921 (2023 : £12,444,476,000).
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 2024 the Group owed the funds
£202,733,732 (2023 : £211,790,000) in respect of creations
and was owed £216,208,769 (2023 : £228,069,000) in
respect of cancellations and fees.
During the year the Group received fees from offshore funds
under management of £8,911,716 (2023: £8,776,000).
Transactions with these funds comprised purchases of £nil
(2023 : £nil) and sales of £nil (2023: £nil). As at Total fees the
Group was owed £1,231,693 (2023: £873,000) in respect
of offshore fund fees.
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 121 to 122. The
aggregate gains made by Directors on the exercise of share
options is disclosed in the table in section 3.1 of the Directors
Remuneration Report on page 130. The charge recognised
in the statement of the comprehensive income in relation to
Directors share options was £598,000 (2023: £497,000).
Interests in structured entities
IFRS 12 requires certain disclosures in respect of interests
in
subsidiaries,
joint
arrangements,
associates
and
unconsolidated structured entities.
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.
184
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
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
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
Fees received
in the year
£m
Fees receivable
£m
as at 31 March 2024
70
24.4
8.2
166
16.2
as at 31 March 2023
74
25.7
9.9
204
16.1
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
2024 has not been recognised in the results for the year.
26 POST BALANCE SHEET EVENT
There were no events after the reporting period that require
disclosure in these financial statements.
185
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT
COMPANY BALANCE SHEET
as at 31 March 2024
Note
31-Mar-24
£’000
31-Mar-23
£’000
Assets
Non current assets
Property, plant and equipment
30
3,707
3,328
Investment in subsidiary undertakings
31
177,522
177,522
Loan to Employee Benefit Trust
29
11,993
18,374
Total non current assets
193,222
199,224
Current assets
Trade and other receivables
32
31,838
12,883
Financial assets
33
3,072
2,687
Deferred tax assets
891
1,165
Cash and cash equivalents
54,509
60,618
Total current assets
90,310
77,353
Liabilities
Non current liabilities
Lease liabilities
(2,538)
(2,167)
Total non current liabilities
(2,538)
(2,167)
Current liabilities
Trade and other payables
34
(52,855)
(55,733)
Corporation tax payable
(1,987)
(2,318)
Total current liabilities
(54,842)
(58,051)
Net current assets
35,468
19,302
Net assets
226,152
216,359
Shareholders’ equity
Ordinary shares
35
648
648
Share premium
–
112,510
Capital redemption reserve
19
19
Retained earnings
225,485
103,182
Total equity
226,152
216,359
The profit after taxation for the year ended 31 March 2024 for the Company was £56.8m (year ended 31 March 2023:
£66.8m profit after taxation).
The notes on pages 189 to 193 form an integral part of these Company financial statements.
The financial statements on pages 186 to 193 were approved and authorised for issue by the Board of Directors on 25 June 2024
and signed on its behalf by V.K. Abrol, Chief Financial Officer.
Company Number 2954692
186
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
COMPANY CASH FLOW STATEMENT
for the year ended 31 March 2024
Year ended
31-Mar-24
£’000
Year ended
31-Mar-23
£’000
Cash flows from operating activities
Cash inflow from operations
36,451
19,481
Cash outflow from operations
(79,505)
(184)
Net cash used in operations
(43,054)
19,297
Interest received
1,359
204
Tax paid
(8,915)
(17,272)
Net cash (used in)/ generated from operating activities
(50,611)
2,229
Cash flows from investing activities
Purchase of property and equipment
(140)
(253)
Acquisition of Majedie
–
(4,037)
Loan to GAM
(8,900)
–
Loan repaid by GAM
8,900
–
Gain on liquidation of Architas
–
827
Loan to the EBT
(1,493)
(9,801)
Loan repaid by the EBT
3,893
–
Purchase of seeding investments
(328)
(2,193)
Sale of Seeding investments
251
153
Dividends received from subsidiaries
90,000
101,000
Issue of shares
–
(1,251)
Net cash generated from investing activities
92,183
84,445
Cash flows from financing activities
Payment of lease liabilities
(1,525)
(1,272)
Dividends paid
(46,156)
(46,070)
Net cash used in from financing activities
(47,681)
(47,342)
Net (decrease)/increase in cash and cash equivalents*
(6,109)
39,332
Opening cash and cash equivalents*
60,618
21,286
Closing cash and cash equivalents*
54,509
60,618
*Cash and cash equivalents consist only of cash balances.
The notes on pages 189 to 193 form an integral part of these Company financial statements.
187
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT
COMPANY STATEMENT OF CHANGES IN EQUITY
for the year ended 31 March 2024
Ordinary
shares
£ ‘000
Share
premium
£ ‘000
Capital
redemption
£ ‘000
Retained
earnings
£ ‘000
Total
Equity
£ ‘000
Balance at 1 April 2023 brought forward
648
112,510
19
103,182
216,359
Profit for the year
–
–
–
56,819
56,819
Dividends paid
–
–
–
(46,156)
(46,156)
Cancellation of share premium account
–
(112,510)
–
112,510
–
Equity share options issued
–
–
–
412
412
Sale of own shares
–
–
–
(1,282)
(1,282)
Balance at 31 March 2023
648
–
19
225,485
226,152
COMPANY STATEMENT OF CHANGES IN EQUITY
for the year ended 31 March 2023
Ordinary
shares
£ ‘000
Share
premium
£ ‘000
Capital
redemption
£ ‘000
Retained
earnings
£ ‘000
Total
Equity
£ ‘000
Balance at 1 April 2022 brought forward
612
64,370
19
82,772
147,773
Profit for the year
–
–
–
66,760
66,760
Dividends paid
–
–
–
(46,070)
(46,070)
Shares issued
36
48,140
–
–
48,176
Sale of own shares
–
–
–
(1,765)
(1,765)
Equity share options issued
–
–
–
1,485
1,485
Balance at 31 March 2023
648
112,510
19
103,182
216,359
The notes on pages 189 to 193 form an integral part of these Company financial statements.
188
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
STRATEGIC REPORT GOVERNANCE 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 27 to 29 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 gain or loss in the value of the shares held would be taken to unrealised
gain on financial assets..
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 £307,000 (2023: £265,000).
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 £487,000 increase or decrease in interest receivable (2023: £265,000).
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 2024
Within 3 months
£’000
Between
3 months
£’000
Over one year
£’000
Payables
6,578
–
2,048
As at 31 March 2023
Within 3 months
£’000
Between
3 months
£’000
Over one year
£’000
Payables
55,733
–
55,733
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 £11,993,000 (2023: £18,374,000). The current value of the
shares in the trust are disclosed in Note 22.
189
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT
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
Lower of the estimated useful and the remaining lease term on straight-line basis
Office equipment
3- 10 years
Computer equipment
3 years
ROU assets
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.
Year to 31 March 2024
ROU
Assets
£’000
Leasehold
Improvements
£’000
Office
Equipment
£’000
Computer
Equipment
£’000
Total
£’000
Cost
As at 1 April 2023
9,238
1,124
549
1,350
12,261
Additions
2,194
1
–
139
2,334
Disposals
–
(830)
(336)
(591)
(1,757)
As at 31 March 2024
11,432
295
213
898
12,838
Accumulated depreciation
As at 1 April 2023
6,488
1,018
489
938
8,933
Charge for the year
1,634
45
2
8
1,689
Disposals
–
(821)
(311)
(359)
(1,491)
As at 31 March 2024
8,122
242
180
587
9,131
Net Book Value
As at 31 March 2024
3,310
53
33
312
3,707
As at 31 March 2023
2,750
106
60
412
3,328
Year to 31 March 2023
ROU
Assets
£’000
Leasehold
Improvements
£’000
Office
Equipment
£’000
Computer
Equipment
£’000
Total
£’000
Cost
As at 31 March 2022
7,957
1,107
542
1,120
10,726
Additions*
1,281
17
7
230
1,535
As at 31 March 2023
9,238
1,124
549
1,350
12,261
Accumulated depreciation
As at 31 March 2022
4,992
924
447
725
7,088
Charge for the year*
1,496
94
42
213
1,845
As at 31 March 2023
6,488
1,018
489
938
8,933
*On 1 April 2022 the Group acquired the fixed assets of Majedie Asset Management Limited
Net Book Value
As at 31 March 2023
2,750
106
60
412
3,328
As at 31 March 2022
2,965
183
95
395
3,638
Depreciation has been included in the Consolidated Statement of Comprehensive Income within administration expenses.
190
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
Lease liability
As at
31-Mar-24
£’000
As at
31-Mar-23
£’000
Current
1,573
1,421
Non-current
2,538
2,167
4,111
3,588
The undiscounted cash payments that will be made until end of the lease term are as follows:
£’000
Within 1 year
1652
Between 2 to 5 years
2378
More than 5 years
266
Measurement of ROU asset
ROU asset
As at
31-Mar-24
£’000
As at
31-Mar-23
£’000
Office space
3,310
2750
3,310
2,750
Depreciation on ROU asset
1,634
1,496
Finance costs
67
142
Cash outflow for leases for the year
1,525
1,272
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.
191
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT
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, both
registered in England whose principal activity is as operating companies for the Group’s investment management LLP’s and
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 89.
Management identified indicators of impairment, however based on management’s assessment there was no impairment required.
2024
£’000
2023
£’000
Balance at 1 April
177,522
142,902
Additions during the year
–
55,311
Reductions during the year
–
(20,691)
Balance at 31 March
177,522
177,522
During the year ended 31 March 2023, the Company liquidated two wholly-owned subsidiaries and accordingly has fully
impaired the carrying value of these subsidiaries in the prior year.
32 TRADE AND OTHER RECEIVABLES
31-Mar-24
£’000
31-Mar-23
£’000
Receivables due from subsidiary undertakings
30,615
12,248
Prepayments and accrued income
1,223
635
31,838
12,883
Amounts due from subsidiary undertakings are non-interest bearing and are repayable on demand. 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.
31-Mar-24
31-Mar-23
Financial assets
Assets held at
fair value
through profit
and loss
£’000
Assets held at
fair value
through profit
and loss
£’000
Ireland Open Ended Investment Company
3,072
2,687
3,072
2,687
192
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
34 TRADE AND OTHER PAYABLES
Current payables
2024
£’000
2023
£’000
Other payables including taxation and social security
1,338
834
Payables due to subsidiary undertakings1
43,968
45,343
Lease liability
1,573
1,421
Other payables
5,976
8,135
52,855
55,733
Non current payables
Lease liability
2,538
2,167
2,538
2,167
Amounts due to subsidiary undertakings above are non-interest bearing and repayable on demand. The carrying amount of these
non-interest bearing trade and other payables approximates their fair value.
1In the normal course of business the Company will receive and reimburse amounts for services provided to, and received from,
Group entities.
35 ORDINARY SHARES
2024
Shares
2024
£’000
2023
Shares
2023
£’000
Allotted, called up and fully paid shares of 1 pence
As at 1 April
64,935,384
648
61,252,164
612
Issued during the year
–
–
3,683,220
36
As at 31 March
64,935,384
648
64,935,384
648
36 RELATED PARTY TRANSACTIONS
As at 31 March 2024 the Company was owed the following intercompany balances to:
Liontrust Investment Partners LLP – £nil (2023 : £45,343,000), this amount arose from Group operations.
Liontrust Investment Funds Limited – £2,025,774 (2023 : £nil), this amount arose from Group operations.
Liontrust Fund Partners LLP – £28,589,677 (2023 : £nil), this amount arose from Group operations.
As at 31 March 2024 the Company owed the following intercompany balances by:
Liontrust Fund Partners LLP – £nil (2023 : £8,043,000) these amounts arose from Group operations.
Liontrust Investment Fund Partners LLP – £23,791,670 (2023 : £8,727,000) these amounts arose from Group operations.
Liontrust Investment Management Limited – £1,779,553 (2023 : £2,000,000) these amounts arose from Group operations.
Liontrust Portfolio Management Limited – £12,624,398 (2023 : £141,000) these amount arose from Group operations.
Liontrust Investment Services Limited – £5,687,698 (2023: £nil) these amounts arose from Group operations.
Liontrust International Luxembourg SA – £84,714 (2023: £nil) these amounts 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).
193
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT
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 2024
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
2024 and of the Group’s loss 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 four financial years ended 31 March 2024. 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
£2.9m (2023: £3.5m)
5.3% (2023: 5.0%) of normalised profit before tax
Coverage
99% (2023: 88%) of group profit before tax
Key audit matters
vs 2023
Recurring risk (Group)
Recoverability of Architas and Majedie
Goodwill and Intangibles Assets
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.
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The risk
Our response
Recoverability of Architas and
Majedie Goodwill and Intangible
Assets
(Architas Goodwill £7.95
million; 2023: £7.95 million;
Architas Intangible Asset
£21.67 million; 2023: £32.80
million) Architas Intangible Asset
impairment £7.31million (2023:
£8.80million)
(Majedie Goodwill £4.62
million; 2023: £11.0 million;
Majedie Intangible Assets £6.01
million 2023: £33.40 million
) Majedie Intangible Assets
impairment £23.37 million
(2023: £4.02million) Majedie
Goodwill impairment £6.39
million (2023: nil)
Refer to page 104 (Audit and Risk
Committee Report,) page 153
(accounting policy) and pages
172–174 (financial disclosures).
Forecast based assessment:
The Group’s intangible assets include
investment management contracts and
customer relationships for segregated mandates
recognised as a result of the acquisition of
Architas Multi-Manager Limited and Architas
Advisory Services Limited (together “Architas”) in
October 2020 and Majedie Asset Management
Limited (“Majedie”) on 1 April 2022, together
with goodwill arising on these acquisitions.
Reductions in Assets under Management and
Advice “AuMA” which impact revenues has
led to a risk of recoverability of the Architas
and Majedie goodwill 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.
The effect of these matters is that, as part of our
risk assessment for audit planning purposes,
we determined that the value in use of these
intangible assets and goodwill had a high
degree of estimation uncertainty; with a potential
range of reasonable outcomes greater than
our materiality for the financial statements as a
whole and possibly many times that amount. In
conducting our final audit work we reassessed
the degree of estimation uncertainty at the
balance sheet date over the post- impairment
carrying amounts to be less than that of
materiality.
The financial statements (note 14 and 15)
disclose the sensitivities estimated by the Group.
We performed the tests below rather than 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.
Our procedures included:
Our valuation expertise: We critically assessed
the Group’s key assumptions of discount rate
and AuMA growth rates with reference to
historical experience and market comparable
data obtained publicly or through internally
derived data.
With the assistance of our own valuation
specialists, we compared the Group’s discount
rate assumption with our own 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 possible changes in discount rate
and AuMA growth rates on the recoverable
amount of intangible assets and goodwill.
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 acceptable. As a result the
directors revised their estimate of the recoverable
amount and then used this revised estimate for
the purpose of calculating the impairment charge
on the Architas and Majedie intangible assets
and the Majedie goodwill now made in notes
14 and 15 (2023: same findings).
Following revision, we found the Group’s
carrying value of Majedie and Architas
intangible assets and goodwill and the related
impairment charges to Majedie and Architas
intangible and Majedie goodwill to be
balanced with proportionate disclosure (2023:
balanced with proportionate disclosure.)
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The risk
Our response
Recoverability of parent Company’s
investment in subsidiary
undertakings
(Investment in subsidiary
undertakings £177.5 million;
2023: £177.5 million)
Refer to page 189 (accounting
policy) and page 192 (financial
disclosures)
Low risk, high value
The carrying amount of the
parent Company’s investment in
subsidiary undertakings represents
63% (2023: 62%) of the parent
Company’s total assets. Their
recoverability is not at a high
risk of significant misstatement or
subject to significant judgement.
However due to their materiality in
the context of the parent Company
financial statements, this is
considered to be the area that had
the greatest effect on our overall
parent Company audit.
We performed the tests below rather than seeking
to rely on any of the Company’s controls because the nature
of the balance is such that we would expect to obtain audit
evidence primarily through the detailed procedures described.
Our procedures included:
Tests of detail: We compared the carrying amount of 100% of
investments with the relevant subsidiaries’ draft balance sheet
to identify whether their net assets, being an approximation
of their minimum recoverable amount, were in excess of their
carrying amount and assessing whether those subsidiaries
have historically been profit- making. We considered the work
performed by the group audit team over the subsidiaries’ profits
and net assets.
Our findings
We found the Company’s conclusion that there is no impairment of
its investments in subsidiaries to be balanced (2023: balanced).
We continue to perform procedures over balances relating to the Acquisition of Majedie. However as the acquisition occurred
in the prior year, we have not assessed this as one of the most significant risks in our current year audit and, therefore, it is not
separately identified in our report this year
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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 £2.9m (2023: £3.5m), determined with reference to
a benchmark of Group profit before tax normalised £58.3m
(2023: £71.4m) Group materiality £2.9m (2023: £3.5m)
Group profit before tax , normalised (2023: normalised) to
exclude costs in relation to severance compensation and staff
reorganisation costs in Note 7 of £3.2m (2023: £4.0m)
and professional services relating to acquisitions as disclosed
in Note 7 of £15.6m (2023: £8.0m) and impairments as
disclosed in note 14 and 15 of £37.1m (2023: £12.8m). In
2023 we also normalised for the write back of the Majedie
acquisition provision of £1.8m. Materiality represents 5.3%
(2023: 5.0%) of the benchmark.
Materiality for the parent Company financial statements as a
whole was set at £1.3m (2023: £1.8m), determined with
reference to a benchmark of parent Company total assets, of
which it represents 0.46% (2023: 0.7%).
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% (2023: 65%) of
materiality for the financial statements as a whole, which
equates to £1.9m (2023: £2.3m) for the Group and £0.8m
(2023: £1.2m) for the parent Company. We applied this
percentage in our determination of performance materiality
based on identified 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
£0.1m (2023: £0.2m), in addition to other identified
misstatements that warranted reporting on qualitative grounds.
Of the Group’s 8 (2023: 8) reporting components, we
subjected 3 (2023: 3) to full scope audits for group purposes.
The range of materiality at 3 components (2023: 3)
components was £1.3m to £2.6m (2023: £1.7m to 3.2m).
The components within the scope of our work accounted for
the percentages illustrated opposite.
The remaining 0% (2023: 9%) of total Group revenue, 1%
(2023: 12%) of Group profit before tax and 2% (2023: 6%)
of total Group assets is represented by 5 (2023: 5) reporting
components, none of which individually represented more
than 1% (2023: 7%) 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.
Group profit before tax
Group total assets
Group revenue
Key:
Full scope for group audit purposes 2024
Full scope for group audit purposes 2023
Residual components
Group profit before tax normalised
£58.3m (2023: £71.4m)
Group materiality
£2.9m (2023: £3.5m)
Normalised PBT
Group materiality
£2.9m
Whole financial
statements materiality (2023:
£3.5m)
£1.9m
Whole financial
statements performance
materiality (2023: £2.3m)
£2.6m
Range of materiality at 3
components (£1.3m to £2.6m)
(2023: £1.7m to £3.2m)
£0.1m
Misstatements reported to the
audit and risk committee (2023:
£0.2m)
100%
(2023 91%)
(2023 88%)
99%
91
100
88
99
94
98
98%
(2023 94%)
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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 a key audit matter.
We have also read the disclosure of climate related information
in the front half of the annual report as set out on pages 62 to
66 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
93 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.
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,
and inspection of policy documentation, as to the Group’s
high- level policies and procedures to prevent and detect
fraud, including the internal audit function, and the Group’s
channel for ‘whistleblowing’, as well as whether they have
knowledge of any actual, suspected or alleged 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
• Reading internal audit 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 performed
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 assessment of 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.
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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
related to compliance with laws and regulations
We identified areas of laws and regulations that could
reasonably be expected to have a material effect on the
financial statements from our general commercial and sector
experience and through discussion with the directors and other
management (as required by auditing standards), and from
inspection of the Group’s regulatory and legal correspondence
and discussed with the directors and other management the
policies and procedures regarding 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, 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.
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.
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.
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 given in those reports 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.
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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 31 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 Principle Risks and Mitigation disclosures describing
these risks and how emerging risks are identified, and
explaining how they are being managed and mitigated;
and
• 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 31 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.
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 89,
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.
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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 under Disclosure
Guidance and Transparency Rule 4.1.17R and 4.1.18R.
This auditor’s report provides no assurance over whether the
annual financial report has been prepared in accordance
with those requirements.
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
25 June 2024
SHAREHOLDER INFORMATION
DIRECTORS AND ADVISERS
Registered Office and Company number
2 Savoy Court, London WC2R 0EZ
Registered in England with Company Number 02954692
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
31 March
Half Year End
30 September
Results announced:
Full year: June,
half year: November
Interim report available:
December
Annual Report available: July
Annual General Meeting: September
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’).
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GLOSSARY OF TERMS
AAF
Audit and Assurance Faculty
APM
Alternative Performance Measure
AuMA
Assets under Management and Advice
AuM
Assets under Management
BNYM
The Bank of New York Mellon
Board
The board of directors of the Company
CASS
Client Money & Assets
CEO
Chief Executive Officer
CFO
Chief Financial Officer
Code
The UK Corporate Governance Code (2018)
Company
Liontrust Asset Management Plc
COO
Chief Operating Officer
CRO
Chief Risk Officer
CSOP
Liontrust Company Share Option Plan
DBVAP
Deferred Bonus and Variable Allocation Plan
DE&I
Diversity, Equity and Inclusion
Directors
The directors of the Company
DRP
Directors’ Remuneration Policy
EBT
Liontrust Asset Management Employee Benefit Trust
EIT
Edinburgh Investment Trust
eLTIP
Employee Long Term Incentive Plan
EPS
Earnings Per Share
ERM
Enterprise Risk Management
ESG
Environmental, Social and Governance
Executive Directors
The Executive Directors of the Company, John Ions and Vinay Abrol
FCA
Financial Conduct Authority
FRC
Financial Reporting Council
GAM
GAM Holding AG
GHG
Greenhouse Gases
Group
Liontrust Asset Management Plc and its subsidiaries
202
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STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
HR
Human Resources
IA
The Investment Association
IAS
International Accounting Standards
IASB
International Accounting Standards Board
ICARA
Internal Capital And Risk Assessment
ICVC
Investment Company with Variable Capital
IFRS
International Financial Reporting Standards
KIID
Key Investor Information Document
LFP
Liontrust Fund Partners LLP
LFPPM
Liontrust Fund Partners LLP Partnership Management Committee
LILSA
Liontrust International (Luxembourg) S.A. (renamed Liontrust Europe S.A.)
LIP
Liontrust Investment Partners LLP
LIPPM
Liontrust Investment Partners LLP Partnership Management Committee
LTIP
Long Term Incentive Plan
Majedie
Majedie Asset Management Limited
mLTIP
Member Long Term Incentive Plan
MLRO
Money Laundering Reporting Officer
MPS
Model Portfolio Service
NED
Non-executive Director
NZAM
Net Zero Asset Managers’ Initiative
OMS
Order Management System
RAS
Risk Appetite Statement
SAYE
Save As You Earn Scheme
SID
Senior Independent Director
SIP
Share Incentive Plan
SM&CR
Senior Managers & Certification Regime
TCFD
Task Force on Climate-related Financial Disclosures
TSR
Total Shareholder Return
vCISO
Liontrust’s virtual Chief Information Security Officer
Workforce Advisory
Forum
Liontrust’s Workforce Advisory Forum
203
LIONTRUST ASSET MANAGEMENT PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT