Record Plc (LON:REC) has started the new financial year with another quarter of positive momentum, according to the latest research note from Panmure Liberum. The broker said the group’s second-quarter trading update showed net flows comfortably ahead of its expectations, while stronger markets added a further boost to assets under management. It kept a Buy rating and a 120p target price.
The most immediate signal from the update was the scale of the asset growth. Record ended June with $122bn of assets under management and exchange, above the broker’s estimate of $116.4bn. Net inflows of $2.3bn marked a fourth consecutive quarter of positive flow, a run that suggests the business has now sustained demand across more than one reporting period rather than relying on a single strong quarter. Market movements added $5.4bn, well ahead of the $1.4bn expected by the broker, so both client activity and external market conditions helped the period.
Panmure Liberum said the flow picture was broad-based. All three reporting segments contributed positively, with Risk Management, Absolute Return and Private Markets each seeing net inflows. Risk Management remains the largest part of the asset base, rising to $98.7bn at the end of June from $92.8bn three months earlier. Absolute Return increased to $4.4bn from $3.7bn, while Private Markets reached $18.9bn, up from $18.1bn. That mix matters because it shows growth is not being driven by a single product line alone, even though the core FX and hedging franchise still does most of the heavy lifting.
The note gave particular attention to Solutions for Asset Managers, which it described as a standout contributor during FY26 and a major source of the current quarter’s inflows in Private Markets. It also highlighted a new mandate win in the high-margin FX Alpha division. Those are smaller parts of the story than the main hedging franchise, but they are relevant because the broker views them as evidence that Record is gaining traction in product areas with richer economics than the core business.
Operationally, the latest update also suggested that the Infrastructure Equity Fund remains active. Undeployed commitments increased to $1.2bn at 30 June from $1.1bn at the end of March, even as capital continued to be deployed. Panmure Liberum said this is part of Record’s wider push into adjacencies that sit closer to its structuring skills and client relationships, rather than a move away from its existing franchise.
In a direct comment from the note, research analyst Abid Hussain said: “Management has entered the new financial year with momentum.” The same paragraph in the report linked that momentum to the company’s core FX and hedging activities, which the broker still sees as the main engine of both asset growth and flows.
The analyst’s bullish stance is supported by a modest upward revision to the numbers. Panmure Liberum raised its AUM estimates for FY27E and beyond by around 5% after the stronger-than-expected flows and market gains. EPS upgrades were more restrained, at about 2.5%, because the mark-to-market benefit from lower-margin Passive Hedging products dilutes the flow-through to earnings. Even so, the broker pointed out that around £4m of new mandate revenue flagged at the FY26 results has not yet hit the profit and loss account, leaving room for additional earnings contribution if those fees come through as expected.
On valuation, the shares still trade on what the broker sees as undemanding multiples relative to the company’s earnings trajectory. The research note puts FY27E on 10.9 times earnings, easing to 9.0 times in FY28E and 8.5 times in FY29E. It also highlighted a strong balance sheet, with £13.0m of cash and cash equivalents plus £3.5m of investments. Forecast dividend yield remains meaningful, with a projected c.8% in FY28E assuming a 70% payout ratio.
That combination of resilient inflows, a stronger AUM base and early progress in higher-margin products gives the next trading update, due in November 2026, more than routine importance. The near-term question is whether the recent pace of mandate wins and client activity can keep feeding through to revenue quality as well as asset growth. For now, the latest note suggests Record is still doing the heavier work at the centre of its franchise while gradually widening the opportunity set around it.
