According to the latest research note from Edison Investment Research, Record Plc (LON:REC) has delivered an impressive third quarter trading update for FY26, with assets under management (AUM) climbing by 5% to reach a record high of $115.9bn. This growth was fuelled by robust net inflows of $3.3bn and positive asset movements of $3.1bn, reinforcing the group’s continued momentum and positioning in the market.
The report, authored by Martyn King, Director at Edison covering Financials, Property and Insurance, highlights that crystallised performance fees of £1.6m in Q3 were slightly ahead of the projected run-rate, supporting management’s confidence in meeting full-year earnings expectations. As such, Edison is not revising its current estimates.
A key driver of performance in the quarter was Record’s passive hedging strategy, which was the main contributor to both net inflows and asset movements. Additionally, both Dynamic Hedging and the Solutions segment contributed positively. Net inflows for Q3 totalled $2.4bn, with a slight offset from foreign exchange movements of -$0.9bn.
King commented, “Performance fee generation was strong at £1.6m for the quarter, up 23% versus Q325. Total year-to-date performance fee generation currently stands at £2.4m, which compares favourably to our FY26 forecast of £3m.” He also noted that a more favourable environment for performance fees has emerged as central banks have moved away from ultra-accommodative monetary policies and as global macroeconomic factors such as geopolitics and supply chain dynamics become more significant.
Record’s valuation remains attractive, trading at 13.8x and 11.8x on Edison’s FY26 and FY27 EPS forecasts respectively, while offering a healthy dividend yield supported by a solid balance sheet and strong cash flow generation.
Q3 FY26 Highlights:
- AUM up 5% quarter-on-quarter to $115.9bn
- Net flows of $3.3bn
- Positive asset movements of $3.1bn
- Performance fees for Q3 at £1.6m, up 23% YoY
- FY26 EPS forecast: 3.91p, DPS: 4.65p
- FY27 EPS forecast: 4.56p, DPS: 4.65p
- Record trades on a FY26 P/E of 13.8x and offers an 8.6% dividend yield
Record’s management has reiterated that the outlook for the year remains dependent on the timing of several large, complex deals in the pipeline. Despite this, confidence remains intact as earnings expectations for the full year are unchanged.
Thoughts:
Record Plc continues to demonstrate resilience and growth through disciplined management and effective strategies, particularly in passive hedging. As the company looks ahead to its Q4 update on 24 April 2026, investors will be watching closely for further evidence of sustained momentum and successful execution of its growth pipeline.
