Brooks Macdonald Asset Management  

Brooks’ investment performance offset by £260m outflows

Brooks’ investment performance offset by £260m outflows
 Caroline Connellan, chief executive of Brooks Macdonald

The positive investment performance of Brooks Macdonald’s portfolios was wiped from its assets under management in the three months to September as investors pulled millions from almost all its offerings.

In a trading update published today (October 15), Brooks reported positive investment performance of £228m across its business — up 1.7 per cent for the period and ahead of its MSCI benchmark, which was down 0.4 per cent.

But this was more than offset by £261m net outflows as investors withdrew cash from all of Brooks’ services except its international proposition.

The main culprit was its discretionary arm, which saw £119m and £81m pulled from its bespoke and model portfolio services respectively, while £100m was withdrawn from its funds department.

Some £39m was pumped into its international offering, which has grown to £1.6bn in assets as at September 30.

The outflows, combined with Brooks’ positive investment performance, saw the discretionary fund manager’s Aum remain steady over Q3, falling slightly from £13.68bn to £13.65bn.

Caroline Connellan, chief executive, said: “I am pleased with the strong investment performance we delivered, continuing to protect our clients' wealth, as well as positive flows in International as we continue to reinvigorate the business.

“Our vision for Brooks Macdonald is as the leading investment manager for intermediaries, and we look forward with confidence."

Last month Brooks pledged to “transform the adviser experience” in the next stage of its strategy as it looked to pivot from a focus on “preserving value” towards “value creation”.

It will look to improve advisers’ digital experience, introducing automated onboarding, client portal functions and bespoke reporting.

Brooks has been on a growth trajectory over the past year, buying rival DFM Cornelian Asset Managers last November and Lloyds’ offshore wealth arm earlier in the summer.

However the past few years have not been easy for the company, which went on a cost cutting drive in January last year as market conditions put pressure on revenues and saw a number of senior staff exit the firm.

Jon Gumpel, co-founder and director at the firm, left the company in October last year while John Wallace, who had worked at the firm for 15 years as co-head of the UK investment business, exited in January 2020.

Responding to today’s results, analysts Peel Hunt said Brooks was a ‘buy’, saying that Brooks’ management remained confident that pressure on outflows would ease and holding onto the prospect of more positive momentum going into 2021.

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