Brooks Macdonald suffers market hit amid ongoing acquisitions
Brooks Macdonald suffered from a significant investment and market loss over the last quarter as the firm continued to integrate its various financial acquisitions.
While funds under management and administration at the asset manager did swell seven per cent over the quarter, this was due to £1.6bn added through acquisitions of financial planning firm Lucas Fettes and independent financial advisor LIFT.
Meanwhile, Brooks Macdonald suffered £129m of investor withdrawals throughout the quarter, though this was an improvement from the £151m pulled in the last three months of 2024, it revealed in a trading update.
In addition, weak market and investment performance saw every arm of the firm’s business lose money on stocks, with assets falling by £273m over the quarter as a result.
As a result of the poor investment returns, Investec analysts downgraded its forecasts for the firm’s profit before tax over the next two years by 12 per cent, though acknowledged the potential upside to the revised estimates if markets recover.
At the start of 2025, Morning Wire revealed that Brooks Macdonald had made various layoffs among its senior staff across recent months, including its global head of distribution, global head of marketing, and head of public relations.
The firm has pursued frequent cost-cutting programmes in the past, and new CEO Andrea Montague, who joined in October, refused to rule out further redundancies.
“The integration of our Financial Planning businesses is progressing well, and we remain focused on improving asset retention and driving new business growth,” said Montague in the trading update.
“Our recent move to the main market of the London Stock Exchange marks the start of a new chapter for Brooks Macdonald, as we pursue our strategy to deliver sustainable value for all our stakeholders,” she added.
After moving from London’s junior stock exchange AIM to the main market at the end of last month, the asset manager’s stock price has fallen seven per cent.
In its trading update today, there were some bright spots for Brooks Macdonald: The firm’s managed portfolio service platform was the sole arm of the business to bring in new money throughout the quarter.
The managed portfolio service platform arm includes Brooks Macdonald Investment Solutions, the firm’s business offering to financial advisers, as well as its recently acquired businesses, and brought in £148m in new cash over the quarter.