Investment Trusts  

Brooks Macdonald gives update on delayed fund launches

Brooks Macdonald gives update on delayed fund launches

Brooks Macdonald is closer to unveiling one of the two investment products which have been put on hold for more than a year, as its chief executive revealed the firm has been eyeing up more acquisition opportunities.

In July, the Aim-listed wealth management firm announced it had again decided to postpone the launch of two funds, after Britain’s decision to leave the European Union dented investor confidence.

The products, which are both real estate investment trusts (REITs), were initially set to go to market in October 2015, but poor market conditions prompted the firm to first delay the launch.

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Chris Macdonald, chief executive of Brooks Macdonald, told FTAdviser the situation was “deeply frustrating”, but said the firm now planned to launch one of the vehicles in November.

The other Reit will be unveiled several months later down the line, and Mr Macdonald said he expects it to go to market in March next year, adding this date was dependent on “all things being equal”.

“We have learnt from the experience over this past year that things are not always equal,” he said, adding there are so many factors, such as political shocks, which can “dislocate that strategy”.

The Brooks Macdonald boss also said he was “always looking” for fresh acquisition opportunities, adding the company has been looking at around one or two businesses a month.  

However, he said the takeover of advice firms was unlikely due to concerns this would create conflicts of interest with the hundreds of advisers Brooks Macdonald works with, adding: “Our independence is very important.”

“We didn’t complete any acquisitions last year, and there are no promises we will this year,” he said, pointing out a lot of companies are priced quite highly at the moment.

“There are a number of hurdles you have to overcome before you complete a takeover; the company has to have strong growth prospects and must fit with the existing business model.”

Brooks Macdonald struck a deal with fund group Levitas for £24m back in 2013, and the firm admitted it had reduced the company’s annual growth targets for funds under management down from 25 per cent after seeing slower than expected inflows.

Mr Macdonald said the original target was “overly ambitious”, adding the firm has still seen strong growth of 20 per cent a year.

This comes after the company’s results, released today (21 September), revealed the firm had seen a 39 per cent jump in pre-tax profits, helped by the reduction in payments for Levitas.

Brooks has £7m left to pay for the fund group, but expects to have completed the payments by 2021.