* Q1 funds rise 4.7 pct to 35.8 bln stg
* Helped by rising stock markets
* Shares flat, in line with market
By Simon Jessop
LONDON, May 11 (Reuters) - British wealth manager Rathbone Brothers reported a 4.7 percent rise in first-quarter funds under management on Thursday, boosted by investment gains.
Rathbone, in the process of expanding its distribution and private client activities, joins rival asset and wealth managers which have been generally supported by rising equity markets in the first quarter, helping to attract new money from clients.
Funds at the end of March stood at 35.8 billion pounds ($46.4 billion), Rathbone said in a statement, buoyed by 427 million pounds in net inflows and 1.2 billion pounds of market gains.
That in turn helped drive a 22 percent rise in fee income from the same period a year earlier to 46 million pounds.
"Our investment businesses continue to perform well and activity is high across the group as we continue to progress towards our strategic goals," Chairman Mark Nicholls said.
"We continue to seek further growth opportunities, but remain mindful of continuing political and economic uncertainties."
Total net growth of funds under management in its investment management unit was 318 million pounds, Rathbone said, with net organic growth of 248 million pounds and acquired inflows of 70 million pounds.
Funds under management in its unit trusts, meanwhile, rose 10 percent to 4.4 billion pounds.
Over the same period, the FTSE 100 rose 2.6 percent, it said.
KBW analyst Jonathan Richards said the growth in funds was 1 percent ahead of expectations.
"Given the growth profile and established brand we continue to believe Rathbone's is an excellent company," he wrote in a note to clients.
"That said, the current rich valuation level shows the market agrees with our thesis; and thus we rate Rathbones a 'Market Perform'."
Shares in Rathbone were flat at 2,403 pence at 0713 GMT, in line with the broader FTSE mid-cap index.
Peel Hunt analyst Stuart Duncan said in a note to clients that Rathbone's organic growth in the period of 3.3 percent was an improvement, flagging a 'add' rating and 2,450 pence price target.
$1 = 0.7724 pounds Reporting by Simon Jessop; Editing by Mark Potter