Brooks Macdonald today publishes an update on its Funds under Management (“FUM”) for its second quarter ended 31 December 2021, together with a Trading Update for the half year.
FUM update
Total Group FUM at £17.3 billion (30 September 2021: £16.8 billion; 30 June 2021: £16.5 billion), an overall increase of 3.1% over the quarter and 5.3% over the half year. This reflected increasingly positive net flows, in line with prior guidance, and positive investment performance. Group net flows were up 55% compared to the prior quarter.
Highlights for the quarter included:
- Increasingly positive net flows at the Group level – annualised net flows of 4.7% for the quarter, up from 3.1% for Q1 and (2.0)% for FY21
- Net flows in UKIM Discretionary (ex Funds) of £0.2 bn or 1.7% (6.8% annualised), with both BPS and MPS continuing in positive territory
- Outflows declining in Funds, with Defensive Capital Fund flat on organic flows
- Continued progress in International, returning to positive net flows as previously guided.
Investment performance remained positive, although behind the benchmark index for the quarter. The Group remains confident that client portfolios are well positioned for the medium and longer term.
Trading and outlook
The Group has a healthy pipeline and expects continuing positive net flows, in line with prior guidance.
Underlying profit and underlying profit margin are running ahead of the same period last year and in line with expectations. Reflecting its view that client portfolios were well positioned, the Group maintained a relatively stable asset allocation, resulting in lower than expected transaction-related revenues for the first half. This has been offset by continued strong cost discipline.
The Group continues to make progress in its digital transformation, launching the planned new digital client onboarding solution in the quarter. The transition of all client- and intermediary-facing processes to SS&C’s platform is ongoing and will conclude once comprehensive testing has been completed.
Andrew Shepherd, CEO of Brooks Macdonald commented:
“This has been a strong half for Brooks Macdonald, reflective of the momentum we see across the Group. It is especially pleasing to see our International business return to positive net flows, with our new Isle of Man office also coming on stream to support future growth. We have a growing pipeline of new business, our highly talented people are continuing to work hard to improve and develop our service to clients and intermediaries, and we are in a strong position to take advantage of the great opportunities ahead for Brooks Macdonald.”
Analysis of fund flows by service over the period
| Quarter to 31 December 2021 (£m) | ||||||
| Opening FUM
1 Oct 21 |
Organic net new business | Investment performance in the period | Closing FUM
31 Dec 21 |
Organic net new business | Total mvmt | |
| BPS | 9,604 | 51 | 159 | 9,814 | 0.5% | 2.2% |
| MPS | 2,618 | 156 | 60 | 2,834 | 6.0% | 8.3% |
| UKIM discretionary | 12,222 | 207 | 219 | 12,648 | 1.7% | 3.5% |
| Funds – DCF | 478 | 2 | 15 | 495 | 0.4% | 3.6% |
| Funds – Other | 1,598 | (23) | 29 | 1,604 | (1.4)% | 0.4% |
| Funds total | 2,076 | (21) | 44 | 2,099 | (1.0)% | 1.1% |
| UKIM total | 14,298 | 186 | 263 | 14,747 | 1.3% | 3.1% |
| International | 2,516 | 12 | 54 | 2,582 | 0.5% | 2.6% |
| Total | 16,814 | 198 | 317 | 17,329 | 1.2% | 3.1% |
| Total investment performance | 1.9% | |||||
| MSCI PIMFA Private Investor Balanced Index1 | 3.8% | |||||
| Six months to 31 December 2021 (£m) | |||||||
| Opening FUM
1 Jul 21 |
Organic net new business Q1 | Organic net new business Q2 | Investment performance in the period | Closing FUM
31 Dec 21 |
Total organic net new business | Total mvmt | |
| BPS | 9,460 | 6 | 51 | 297 | 9,814 | 0.6% | 3.7% |
| MPS | 2,411 | 162 | 156 | 105 | 2,834 | 13.2% | 17.5% |
| UKIM discretionary | 11,871 | 168 | 207 | 402 | 12,648 | 3.2% | 6.5% |
| Funds – DCF | 478 | (11) | 2 | 26 | 495 | (1.9)% | 3.6% |
| Funds – Other | 1,598 | (15) | (23) | 44 | 1,604 | (2.4)% | 0.4% |
| Funds total | 2,076 | (26) | (21) | 70 | 2,099 | (2.3)% | 1.1% |
| UKIM total | 13,947 | 142 | 186 | 472 | 14,747 | 2.4% | 5.7% |
| International | 2,512 | (14) | 12 | 72 | 2,582 | (0.1)% | 2.8% |
| Total | 16,459 | 128 | 198 | 544 | 17,329 | 2.0% | 5.3% |
| Total investment performance | 3.3% | ||||||
| MSCI PIMFA Private Investor Balanced Index1 | 4.0% | ||||||
1Capital-only index.
