By Simon Jessop
LONDON (Reuters) - Fund firm Hargreaves Lansdown (L:HRGV) defied a volatile quarter for global stock markets to draw in a record amount of new cash from investors, sending its shares higher on Wednesday.
Global markets have been hit by a stock market collapse in China and concern around the economic outlook, particularly as the United States inches closer to raising rates.
That meant the total value of assets administered by the firm dipped by 500 million pounds to 54.7 billion pounds in the quarter to end-September.
However, clients seeking improved returns as stock prices fell pumped a record amount of money into third-party funds listed on its platform and other products provided by a firm referred to as a fund supermarket.
New business inflows were up 47 percent on the prior year to 1.43 billion pounds during the quarter, Hargreaves said.
These were buoyed by transfers of money into the company's pension products as it benefits from a relaxation of retirement investment rules in Britain this year.
The new business also included 370 million pounds in client assets bought from JPMorgan (N:JPM) Asset Management.
"We are particularly pleased with the reported trading data for the first quarter of the financial year given lower stock markets and weakness in investor confidence during the period," said Chief Executive Ian Gorham.
Shares in Hargreaves were up 7.2 percent at 0830 GMT, leading gainers in a 0.6 percent weaker FTSE 100 (FTSE).
The 1 percent hit to asset values at Hargreaves follows a 2.3 percent decline at asset manager Jupiter Fund Management (L:JUP) and compares favourably with a 6.6 percent fall in the FTSE All-Share index over the quarter.
Hargreaves also noted strong interest in the forthcoming sale of government shares in Lloyds Banking Group (L:LLOY) to private investors, which could benefit the company.
"Early indications suggest considerable interest in next year's Lloyds share sale. A sizeable number of people buy their first ever share via an IPO, and retail share offers are therefore very important in encouraging the UK public to invest," it said.
Calling the results "solid", analyst Paul McGinnis at Shore Capital said the demand for Lloyds showed a "strong parallel with the Royal Mail (L:RMG) IPO two years ago, which generated a huge surge in new customer sign-ups".
While a "huge admirer" of the Hargreaves Lansdown business model, McGinnis said he maintained a "hold" recommendation on valuation grounds.