Brooks Macdonald assets jump above £17bn as outflows reverse

But chief executive warns of challenges ahead as Ukraine crisis unsettles markets

Funds under management at Brooks Macdonald hit £17.3bn for the six months ending 31 December 2021, up 10.4% from the same period the previous year.

FUM was up 5.3% over the half-year from the £16.5bn reported at the end of June 2021.

Net flows returned to positive territory in the first half of its 2022 financial year, with the DFM pulling in £326m. The company recorded net outflows of £367m in H1 FY21 and £506m in H1 FY20.

The improved performance and “complete half-year contribution” from its acquisition of Lloyds Banking Group’s Channel Islands funds and wealth management business translated into a 10.7% rise in revenue to £61.9m, the company said.

As part of its strategy, Brooks Macdonald said it is continuing to look for inorganic growth opportunities. It reviewed a number of “potential targets” in H1 but failed to identify any that met its criteria.

That said, the firm reportedly made a £300m offer for 7IM in December 2021, which would have seen it pay three times the sum its current controlling shareholder Caledonia Investments, forked out in 2015.

See also: Brooks Macdonald AUM hits record £15.5bn as outflows slow

Short-term macro outlook is ‘highly uncertain’

It added that the group “has no direct exposure to Russia in its discretionary client portfolios or its funds” and its indirect exposure is through holdings in third-party funds in the client portfolios, which accounts for circa 0.1% of FUM.

Brooks Macdonald chief executive Andrew Sheperd commented: “I am pleased to report that we delivered sustained strong financial performance for the first half year with positive net flows and record underlying profit margin of over 28%, enabling us to increase our interim dividend once again by 13%.”

In light of the crisis unfolding in Ukraine, he said it “is a challenging time for investors”.

“Although the short-term macroeconomic outlook is highly uncertain, looking ahead we remain confident in our long-term prospects building on our ambitious organic and inorganic growth strategy, grounded in our purpose of realising ambitions and securing futures.”

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