Liontrust Asset Management, once a favorite on the stock market, reported a net withdrawal of £1.14 billion by clients during the three months leading to September, attributing this trend to uncertainty surrounding the upcoming budget.

The fund manager based in London indicated a 4 percent decline in total assets under management, which now stands at £26 billion for the summer quarter. This decline comes amid an increase in client withdrawals.

In the previous quarter, the firm had seen £923 million taken out, though the current pace of withdrawals has slightly decreased compared to the year ending March 31, when the outflows reached £6.1 billion, resulting in a quarterly outflow rate exceeding £1.5 billion.

John Ions, the chief executive, remarked, “The recent large electoral mandate for the new government initially raised hopes for political and economic stability and a robust pro-growth agenda. However, the speculation and uncertainty concerning potential changes to taxation and reliefs ahead of the budget have negatively impacted investor confidence and fund flows across the entire industry, including Liontrust.”

Ions also mentioned that the difficult environment for active fund managers, who aim to outperform market indices, has persisted longer than expected.

Survey data suggests that consumer confidence has taken a hit in recent weeks, with officials’ pessimistic comments regarding the public finances contributing to a more cautious outlook. Net outflows from UK equity funds increased to £666 million in September, as reported by funds consultant Calastone.

Despite a successful period for Liontrust from 2016 to 2021, where it enhanced profits through numerous acquisitions, its shares have plummeted nearly 80 percent since as retail investors withdraw funds from UK-centric investments and its ESG-focused offerings.

A failed attempt to acquire Swiss company GAM last year also raised concerns about Liontrust’s business model, compounded by the departure of some of its prominent stock pickers.

Ions assured stakeholders of improvements in productivity and efficiency across the organization. He noted that a newly established global equities team, led by Mark Hawtin—previously of GAM—is now integrated within Liontrust and is actively engaging potential new international clients.

Liontrust is scheduled to release its half-year results on November 21. Last year, the company recorded a statutory loss of £579,000, a significant drop from profits of £49.3 million, largely due to one-off expenses and non-cash write-downs.

Following a decline in shares, trading fell below 500p, closing Thursday at 495p, a drop of 33p, and valuing the firm at £321 million. Additionally, it was removed from the FTSE 250 index of mid-cap stocks last December.