Market headwinds put £1.3bn dent in Brooks Macdonald’s results

As the group records its fifth consecutive quarter of net inflows

Andrew Shepherd at Brooks Macdonald

Net inflows of £280m into Brooks Macdonald Group were subsumed by negative market movements, which dragged funds under management down to £15.7bn at the end of its financial fourth quarter, ending 30 June 2022.

FUM dropped 5.9% from the £16.7bn recorded at the end of March 2022, and was down 4.8% from the £16.5bn reported a year ago.

Further evidence of just how challenging 2022 has been so far can be seen in the FUM figure for the six months ending December 2021, which stood at £17.3bn.

Economic headwinds saw the performance of Brooks Macdonald’s investment strategies collectively take a 7.6% hit during its fourth quarter, knocking £1.3bn off its final FUM figure. Over 12 months, it was down 9.6%, equating to a decline of just under £1.6bn.

Despite the challenges, chief executive Andrew Shepherd (pictured) highlighted the group had recorded its “fifth consecutive quarter of net flows, bringing our net flows rate up to 6.7% on an annualised basis”.

He said it underscored the “robustness” of the Brooks Macdonald business model and added, “against the backdrop of declining markets, it is more important than ever to stay connected with our clients and intermediaries”.

See also: Brooks Macdonald scoops up £250m with wealth firm acquisition

Business breakdown

Net inflows across Brooks Macdonald’s DFM arm hit £331m during its fourth quarter, an increase of 2.7% from the previous three months. This was tempered, however, by outflows in its UK funds business (£25m) and international division (£26m).

On an annual basis, the DFM arm reported net inflow growth of 7.7% after taking in £917m from customers. This was again offset by outflows of £106m and £25m across its funds and international divisions, respectively.

For its full-year results, to be published in September, the group said it expects they will be “in line with market expectations, adjusted for recent market movements”.

“While the pipeline for FY23 is strong, conversion times continue to be affected by ongoing market uncertainty.”

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