Brooks Macdonald funds under management reach record high

Brooks Macdonald updated the market on the end of its financial year on Thursday, reporting a “positive” fourth quarter of trading, benefiting from “strong” client and intermediary relationships as well as continued robust investment performance.

The AIM-traded investment manager said it was expecting a full-year result for the 12 months ended 30 June in line with both market expectations and its previous guidance.

Total group funds under management finished the quarter at a record £16.5bn, making for an increase of 5.3% in the quarter and 20.3% compared to the 2020 financial year close.

The increase in the quarter was driven by both strong investment performance, adding £0.7bn, and a return to positive net flows of £0.1bn, as per the firm’s previous guidance.

Each month in the quarter had positive net flows at group level, the board said, with June having the strongest monthly figure, underscoring “growing momentum” behind the business and its strategy.

Overall investment performance for the period was described by the board as “robust” at 4.4%, in line with the MSCI PIMFA Private Investor Balanced Index, which was up 4.3%.

UK investment management discretionary funds under management had “strongly positive” net flows of £0.2bn, making for an annualised rate of 7.6%.

Within that, net flows in the bespoke portfolio service (BPS) returned to positive territory at £28m, driven in particular by the company’s specialist products.

The managed portfolio service (MPS) had net flows of £184m, driven by a number of investment solutions mandates.

Flows in the UK investment management funds business were described as “broadly flat”, although outflows in the defensive capital fund slowed “materially”, with a small net positive result in June.

The company’s international business recorded net outflows during the quarter of £73m, primarily reflecting its previously-disclosed loss of a low-yielding mandate.

Over the course of the full financial year, funds under management increased by £2.8bn, or 20.3%.

Brooks Macdonald’s board said that reflected the Channel Islands wealth management assets acquired from Lloyds Banking Group in November of £0.9bn, combined with positive investment performance of £2.2bn, partly offset by organic net outflows of £0.3bn.

Overall investment performance for the financial year to June was 15.8%, “well ahead” of the MSCI PIMFA Private Investor Balanced Index, which rose by 12.9% over the same period.

“I'm pleased to see Brooks Macdonald returning to positive net flows and I'm hugely excited by the opportunity before us,” said chief executive officer-designate Andrew Shepherd.

“We've put in an enormous amount of effort over the last few years to build the foundations for the future success of the group, and I'm delighted with the progress we've made.”

Shepherd said the company was moving ahead “with confidence”.

“We maintained high quality service to our clients and intermediaries and delivered robust investment performance, well ahead of the relevant index over the year.

“We have a great team in place and an exciting future ahead.”