Brooks Macdonald AUM hits record £15.5bn as outflows slow

Net outflows dropped to £367m for the six months to end of December from £506m the year before

Brooks Macdonald added £2.4bn to its funds under management during 2020 as it experienced an “improving trend” in outflows.

The wealth manager’s results for the six months to 31 December 2020 revealed assets to be £15.5bn, up from £13.7bn in June 2020 and £13.1bn at the end of 2019.

It attributed this to strong investment performance which added 9.5% to its assets, or £1.3bn, despite volatility in markets, as well as it two acquisitions -Lloyds Banking Group’s Channel Islands wealth business and Cornelian Asset Managers.

Investors yank £200m from Brooks’ absolute return fund

The increase in FUM came despite weaker net flows, particularly in the three months to the end of September. The firm reported a net outflow of £367m over the six months to the end of December but noted this was an improvement from a £506m outflow during the same period in 2019.

Outflows were driven by redemptions in the £485.2m Defensive Capital Fund which saw investors yank £200m during the period. Brooks said this reflected trends in the Targeted Absolute Return sector.

Flows were also negatively impacted by the the exit of a single £100m mandate in MPS platforms which moved from discretionary to advisory.

Despite this, Brooks Macdonald said net outflows were on “an improving trend”.

Lloyds deal boosts profits

In November last year, Brooks completed the acquisition of Lloyds Banking Group’s Channel Islands wealth management and funds business, bringing in nearly £900m of FUM. This followed the acquisition of Cornelian which completed in February 2020.

Elsewhere, group total revenue for the first half of the financial year grew by 1.8% to £55.9m. Statutory profits increased materially on the prior period from £7.7m to £14.1m driven by improvements in underlying performance and a gain arising on the Lloyds Channel Islands acquisition.

Brooks Macdonald chief executive Caroline Connellan (pictured) said: “We continued to make good progress in the first half of the year, delivering strong financial performance as we moved into the next phase of our strategy, focused on accelerating growth and value creation.

“Our ongoing robust investment performance, coupled with high-quality acquisitions, brought FUM to record levels and, alongside strong cost discipline, resulted in record underlying profit margin.”

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