Brooks Macdonald Asset Management  

Brooks on the lookout for acquisitions

Brooks on the lookout for acquisitions
 Caroline Connellan, chief executive at Brooks Macdonald

Brooks Macdonald is on the lookout for more acquisitions in 2020 but has a "very high bar" for target firms, its chief executive has said.

Caroline Connellan told FTAdviser Brooks was "looking and will continue to look" for possible firms to buy out following the acquisition of Edinburgh-based wealth manager Cornelion last year.

But she added: "We have a very high bar and we will be very selective. It has to be a good fit, we have to consider capacity.

"It has to be a good fit from a strategy perspective so has to build on what we have already in some way."

Brooks would also ensure the firm had "good economics" and the right culture so the companies could integrate, while Ms Connellan added one of the "great possible outcomes" of acquisitions was the people who transfer over and the good talent arriving at the business.

Ms Connellan said as the firm's investment management arm had the most people and brought in the most revenue, the firm was more likely to buy other DFMs but was open to acquisitions "right across the business".

Her comments came as Brooks' half year results for the six months to December 31 last year showed its funds under management had increased from £11.7bn to £13.1bn year-on-year.

Brooks also reported an 8 per cent increase in revenues compared with the same time period last year — from £51.6m to £55.8m.

The vast majority of the firm's revenue (83 per cent) came from its UK investment management arm. Some £7m came from its international investment management and just £2m from its financial planning services.

Brooks' underlying profit before tax increased from £9.1m to £11.7m year-on-year, a measure Ms Connellan said the firm was looking to improve.

The firm also reported net inflows were stable or up compared with last year in all product groups except its model portfolio service and third party funds.

Ms Collenan told FTAdviser the third party funds business was primarily affected by the loss of one low margin mandate, while outflows from the MPS service prompted Brooks to relaunch the service at the end of 2019.

She said: "We were one of the early providers of MPS to IFAs.

"But we review our proposition from time to time and our MPS service was on our radar, so we identified what IFAs were looking at and aimed to offer it in a cost effective way."

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