Boutique managers Terry Smith and Crispin Odey (pictured) saw their profits surge last year during a period where other asset management groups struggled to keep outflows at bay and make ends meet.
Turnover generated from Smith’s investment boutique over the year shot up 35% from £122m to £165m. The bulk of this was handed over to Fundsmith Investment Services Limited, a Mauritius domiciled company, where founder Smith is based.
Business was also booming over at Odey Asset Management as Odey’s flagship European fund staged a comeback, enjoying one of its strongest performance periods in recent years.
Odey’s boutique brought in 30% higher turnover in the 12 months to 5 April 2019 at £40.8m compared with £31.3m in 2018. After factoring in administrative expenses this left the City hedge fund group with a pre-tax profit of £17.5m, nearly double the £8.9m it posted last year.
Odey enjoys 3,000% surge in performance fees
The recovery in revenue was thanks to the income generated from performance fees which skyrocketed 3,000% from £385k to £11.9m after a bumper year for the Odey European fund.
The €155m fund, run by Odey himself, returned 20.5% to investors during the reporting period and 54.7% over 2018, making up for two dismal years of performance.
Launched by the hedge fund manager and nemesis of Jeremy Corbyn in 1992 the fund shed close to 50% of its value in 2016 as it was hammered by currency swings and rising equity markets, handing investors a 49.5% loss that year, followed by a 21.7% loss in 2017.
Assets under management at the firm hit $4.9bn at the end of the period.
Terry Smith takes home £16m in 2019
On top of climbing profits at their respective boutiques directors at the firm were rewarded handsomely.
Fundsmith founder Smith, who is the member with the largest entitlement at the firm, took home £16.2m in 2019 compared to £12m the previous year.
Odey Asset Management provided remuneration information on just one of its directors, Claire Prince, who was the only member to stay on board during the period under consideration. Prince picked up £187k in 2019, the filing showed.
Smith is joined by a quarter of Fundsmith’s 41 staffers, spanning roles in investment services research trading accounting and administration.
Fundsmith’s Mauritius business has been taking increasingly higher payments from the UK business each year. For the year ended 31 March 2019 it charged the UK business £115.8m for delegated services during the reporting period, up from £88.4m in 2018. In 2017 the UK company ponied up £57.1m.
Headcount at the UK business rose from 18 to 22, according to the latest Companies House filing.
The number of employees at Odey’s business shrank over the period from 67 to 60 people.
The fund group recently added a trio of partners to its ranks in the new year following several key departures.
