Investment management firm Brooks Macdonald plunges as clients feel market sting

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Thursday, September 15, 2022 8:37 a.m.

Investment management firm Brooks Macdonald plunges as clients feel market sting

Funds under management have fallen for Brooks Macdonald this year as the investment management firm warns of the challenging market environment for clients and advisors.

The group’s funds under management (“FUM”) closed at £15.7 billion, down nearly 5% from a year ago, as positive net flows were offset by the impact of the fall in the markets on the value of the assets.

Brooks Macdonald posted positive net flows throughout the year, with net flows for the full year of 4.8% representing an improvement of £1.1bn from 2021 levels .

Group revenue reached £122.2m, up 3.4% on last year, driven by higher average FUM and the impact across the he year of the acquisition by the group of the activity Lloyds Channel Islands

Underlying profit margins increased by 2.3 points to 28.2%.

Brooks Macdonald CEO Andrew Shepherd said the year had been another good year for the company.

However, he said: “Our clients and advisors are facing a challenging macroeconomic and market environment and, as always, we will support them in these difficult times.

Nonetheless, the fundamental long-term opportunity for Brooks Macdonald remains solid despite these challenges. We have momentum, we have an ambitious growth strategy and we have a strong team with the capabilities to take full advantage of the opportunities ahead. »

Shares rose 2% in the early morning as investors backed Brooks Macdonald’s growth opportunities.

Analysts at Peel Hunt gave the stock a buy rating, noting that while market conditions remain a headwind, Brooks “continues to execute on its strategic objectives.”

“Most importantly, earnings levels are holding up and there is good momentum in net flows. For us, the valuation is too low for a company that remains well positioned to benefit from underlying structural drivers,” they wrote.

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