Q4 2020 trading update round-up: Polar Capital gathers inflows; Brooks Macdonald FUM hits record
Resilience despite Covid-19 crisis
The last quarter of 2020 continued to be challenging as the coronavirus crisis showed no signs of abating, while the threat of a no-deal Brexit rocked the UK market, but many of the firms in the industry proved resilient despite this backdrop.
Polar Capital
Polar Capital saw its assets under management rise 55% from the end of March 2020 to the 31 December to sit at £18.9bn.
This was driven largely by market movements and fund performance, which contributed £5.2bn, while £1.5bn came from net inflows. The latest quarter contributed £556m of net inflows from 18 of its funds.
The acquisition of the Phaeacian team added another £431m, though the closure of the UK Absolute Equity fund caused £301m of outflows.
Over the nine months to 31 December 2020, the firm made more than double the profit from performance fees than during the same period of the previous year: £19.3m compared to £8.8m.
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CEO Gavin Rochussen said inflows were particularly strong into the group's Technology and Healthcare funds, but the Global Insurance, Emerging Markets Starts and UK Value Opportunities vehicles all saw net subscriptions during the latest quarter.
"Fund performance has been strong across the majority of our funds with 81% of our AUM performing ahead of benchmark over the calendar year and 83% of our AUM ranked in the first quartile against peers over three years in the Lipper universe," the CEO said.
"We remain confident that with our diverse range of funds and focus on performance in our actively managed complementary funds we are positioned to continue to perform well for our clients and will continue to generate net inflows.
"The net inflow momentum of the last quarter has continued into the first two weeks of January."
Brooks Macdonald
Wealth manager Brooks Macdonald has reported a 13.6% increase in funds under management (FUM) in the last quarter of 2020 to reach a new record of £15.5bn.
This was driven by strong investment performance and "an improving trend in net flows", although overall the business saw net outflows of £106m, with £87m of this coming from UKIM Funds, largely driven by redemptions from the Defensive Capital fund.
International net flows were also negative, with £19m leaving this part of the business during the three-month period, though the group said there was an "improving trend through the quarter".
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However, investment performance more than made up for the outflows, returning 7.9% over the quarter, and the firm said revenue, underlying profit and underlying profit margin are all ahead of the same period last year.
Caroline Connellan, CEO of Brooks Macdonald, said: "I am proud of what our people have delivered in the past six months in exceptionally difficult circumstances.
"Over the period we built momentum in net flows, delivered strong investment performance, and completed the acquisition of Lloyds' Channel Islands wealth management and funds business.
"We are excited about the opportunity we have to continue to make a difference for clients and intermediaries, while also delivering for the group's shareholders."
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