Peter Hargreaves' fund house posts 560% profit increase

Peter Hargreaves' fund house posts 560% profit increase

The fund management firm launched by Hargreaves Lansdown founder Peter Hargreaves has posted a near seven-fold increase in profit for the year to the end of March 2021.

Blue Whale Capital operates the Blue Whale Growth fund, which had assets of just over £1bn on December 15. The firm recorded a profit of £2.4m, compared with £362,000 the previous year. 

It turned over £4.6m in the period, compared with £1.6m the previous year.

The fund is run by Stephen Yiu, who along with Hargreaves is a partner in the firm. Yiu is a former fund manager at Artemis, and also a former employee of Hargreaves Lansdown.

The firm and the fund were launched after Hargreaves approached Yiu to manage some of his family’s money, and subsequently he helped launch the fund with an initial £25m investment.

Hargreaves later stated that a combination of investment gains and further investment meant he had more than £200m invested in the fund. 

Blue Whale Capital had a wage bill of £1.07m for the year, compared with £629,000 the previous year, which was spent on 7 employees, the same as the prior year.

The members of the partnership, Yiu and Hargreaves, withdrew £370,000, compared with £200,000 the previous year. 

Yiu said the long-term plan for the business was to launch an investment trust, focused on slightly smaller companies than are the focus of the present Blue Whale fund. 

This model echoes the approach of Fundsmith - the firm began by launching a large cap focused growth fund and subsequently brought the Smithson investment trust to market.

At the time of its launch, it set a new record for the largest investment trust IPO in history. 

But the market for new investment trusts has soured since then, with a number of aborted launches. With this in mind, Yiu has has indicated that any investment trust launch by his firm is not imminent.