Brooks MacDonald grows FUM despite Brexit headwinds

Added 21st September 2016

Brooks MacDonald overcame "significant headwinds" to achieve higher funds under management and profits for the year ending 30 June 2016.

Brooks MacDonald grows FUM despite Brexit headwinds

Chris Macdonald

Shares in the wealth manager, however, wobbled slightly Wednesday morning dipping 1.06% to 1962p.

Against a backdrop of “considerable market and political uncertainty”, Brooks Macdonald generated £863m ($1.1bn, €bn) in net new discretionary business, taking funds under management to £8.3bn, a 12% increase.

Significantly, all of the growth of discretionary FUM was organic, the firm said.  

Pre-tax profit also rose substantially by 39% to £15.9m, though underlying earnings per share dropped to 87.92p compared with 91.33p from the year prior. Group revenue grew year-on-year by 5% to £81.4m.

Brexit impact

While the EU referendum did not prevent the wealth manager from achieving positive growth in FUM and profits, the group did have to delay the launch of two new funds during the first half of the financial year.

Brooks Macdonald admitted investment returns were challenging in the second half, with investor sentiment noticeably weaker in the final quarter.

The firm's employee benefits division in particular struggled during the year, but the group confirmed it still planned to release a pension default fund for clients at the start of the current financial year.

Investing in the business

Chief executive Chris Macdonald remains adamant that the future remains bright and filled with investment opportunities across the business.

“We will maintain our investment across the business to sustain our continued growth,” he said.”This covers investment in research, governance, IT, distribution, marketing and most importantly our staff. Markets have improved since the EU referendum, but sentiment remains volatile.

"Despite the uncertainties surrounding our exit from the EU and the associated market volatility, we believe the strength of our investment proposition will enable us to deliver good risk-adjusted returns for our clients.”

“While it has been a challenging year, it has been highly productive,” Macdonald added. “We are well positioned strategically, have a strong balance sheet, are growing our brand, have high-quality staff across the group, are working with an increasing number of professional intermediaries and are constantly developing our investment offering. We have made a good start to the new financial year and can look forward with confidence.”

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