Brooks Macdonald blames Budget speculation for poor performance
Wealth manager Brooks Macdonald has blamed uncertainty around the upcoming Budget for investors pulling £100m from its business over the last three months.
In a quarterly trading update today, the London-listed money manager revealed that investors had pulled a total of 0.7 per cent of their assets over the most recent quarter, thanks to a six per cent drop in new business.
“The considerable speculation around the upcoming Budget and rumoured changes to taxation and reliefs has clearly had an impact on investor confidence with lower gross inflows in the quarter,” said new Brooks Macdonald chief Andrea Montague.
Brooks Macdonald is also set to hand over the mandate for its £146m Defensive Capital fund this quarter to RM Funds.
Despite the challenges, Brooks Macdonald did get some wins. Its platform model portfolio service business was the only arm of the business to bring in new money, with £142m added to it over the quarter, indicating a 13 per cent annualised growth rate.
The group’s platform business has now grown to £4.6bn, making up over a quarter of the wealth manager’s business.
“We continue to believe that this will be a long-term beneficiary of Consumer Duty as the industry moves towards outsourced investment management, especially given Brooks’ leading decumulation products,” said Investec analysts Rahim Karim and Jens Ehrenberg.
CEO Montague, who is in her first month in the new role, also said that Brooks Macdonald’s recent acquisitions of LIFT and Lucas Fettes are progressing well, and showed the rate of growth for the business.
However, thanks to the lower-than-expected funds under management, the Investec analysts trimmed their underlying earnings per share forecast to just one per cent over the next three years.
Last month, Brooks Macdonald pledged to simplify its business by selling off its international arm to Canaccord Genuity for £50m.