Terry Smith has enjoyed a bumper payday after profits at his eponymous boutique Fundsmith nearly doubled last year.
Filings from Companies House showed the Fundsmith founder (pictured) pocketed £29.7m for the year ended 31 March 2020, nearly double the £16.2m he scooped up in 2019.
His split came out of the record £48.5m in profits generated by the partnership last year, which was up from £26.4m in 2019. Turnover at the firm also shot up 38% over the period from £165.3m to £228.4m.
Smith’s bumper pay does not factor in the share in the profits he is entitled to from Fundsmith Investment Services Limited (FISL), a Mauritius domiciled company, where Smith is also based.
FISL, which handles administration, trading and research activity for his fund empire, has been taking increasingly higher payments from the UK business each year. Last year it charged Fundsmith £156m for its services, up from £115.8m in 2019 and £88.4m in 2018.
As companies are not required to publicly file in Mauritius, FISL’s costs and profits are unknown.
However, because the Mauritius business is owned under a similar structure as the UK firm in theory Smith could have taken as much as 61% of the profits or up to £95m, according to the Telegraph. This would see him walk away with £125m before tax.
Smith’s flagship Fundsmith Equity fund is the largest UK retail fund with £24bn in assets. Though it has generated explosive returns since launching in 2010, generating gains of 481.2% versus the IA Global’s 185.1%, recently it has seen performance dip. On a six month-view it is in the bottom quartile, returning 7.1% against the sector’s 12.7%.
Last month Smith laid out plans for his eventual retirement, floating head of research Julian Robins as his potential successor.
See also: Terry Smith floats Fundsmith head of research as potential successor
