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Brooks Macdonald Posts Strong Discretionary FuM Growth

Amisha Mehta

12 March 2015

London-headquartered  reported a 22 per cent surge to £6.95 billion ($10.47 billion) in discretionary funds under management during the half year to 31 December 2014.

The company's pre-tax profit dipped 9.1 per cent to £4.48 million as administration costs incurred from the acquisition of Levitas Investment Management Services stood at £120,000 over the six-month period.

Underlying pre-tax profit however, adjusted for acquisition costs, rose 9.1 per cent to £6.72 million compared to the corresponding half-year in 2013, the firm said.

Revenues reached £37.5 million over the six months, up 12.3 per cent year-on-year. This was partly down to £238 million in net new business, which helped drive organic growth up 6 per cent.

Meanwhile, an increased tax charge pulled statutory earnings per share down 18.5 per cent to 26.63p.

The group recorded a loss of £45,000 over the six months in relation to its partnership with North Row Capital.

Elsewhere, the company's funds arm, Brooks Macdonald Funds, grew funds under management 23 per cent to £550 million over the half-year. Brooks Macdonalds' chairman, Christopher Knight, estimates the business, which launched in 2011, will break even in the second half of this financial year and make a first-time net contribution to the group in 2016.

Against a backdrop of volatile but positive investment markets and continued regulatory change, the first half of our financial year has been a period of solid progress for the group with continued growth in discretionary funds under management, further development of our investment offering, distribution and IT systems,” said Knight in the results statement.

“We are accelerating our focus offshore on the growth of discretionary funds under management both for bespoke clients and our international managed portfolio service. Advisory services remain an important offering for international clients but we see material opportunities for growth around working with fiduciaries and offshore professional advisors managing discretionary assets.”

Knight added that the company expects to move offices later this year, which will push up annual property costs “by £0.65 million annualised but will provide us with greater flexibility and longer term certainty”.