Brooks Macdonald reports modest rise in funds under management

12th Oct 2023 12:43

(Sharecast News) - Brooks Macdonald updated the market on its funds under management (FUM) for the first quarter on Thursday, recording marginal net outflows of £70m, translating to 0.4% and in line with initial guidance.

The AIM-traded company said the net outflows were delicately offset by an affirmative investment performance, recording a 0.5% uptick during the quarter.

As a result, its closing FUM experienced a modest escalation, concluding at £16.9bn, up from £16.8bn on 30 June.

Notably, gross inflows mirrored the figures from the corresponding period in the prior year, although outflows grew.

The upward drive of outflows was particularly noticeable in the UK funds business, clocking in at 4.6%, reflecting patterns in the wider asset management sector.

Brooks Macdonald said UK Investment Management (UKIM) discretionary FUM ascended 0.6% over the quarter, primarily driven by the Managed Portfolio Service (MPS) platform, which saw a notably high annualised net flow rate of 16.9%.

Furthermore, an overall positive investment performance through the quarter contributed to a FUM augmentation of £0.1bn, or 0.5%, in parity with the MSCI PIMFA Private Investor Balanced Index, which saw an increment of 0.6%.

Looking ahead, Brooks Macdonald said its pipeline for the 2024 financial year was still robust, with the group expecting strong gross inflows and projecting positive net flows across the full year, albeit within a landscape of ongoing market challenges and client cautiousness.

"I am pleased that inflows continue to be robust, and that our core UKIM discretionary business delivered positive net flows, reflecting continuing demand for our products and services," said chief executive officer Andrew Shepherd.

"At the overall Group level we saw net outflows, driven by the volatile macroeconomic backdrop and continuing high interest rates, which are leading clients to move towards higher cash holdings, debt repayment and investment in money market funds."

Shepherd said the company was engaging closely with clients and introducers to help guide them through challenging markets.

"In our view, the need for high-quality financial advice and robust long-term investment management is now greater than ever.

"Given that, combined with the supportive demographic trends and the quality and commitment of our people, we remain confident in the Group's ability to deliver our ambitious growth strategy."

At 1209 BST, shares in Brooks Macdonald Group were up 1.9% at 1,620.15p.

Reporting by Josh White for Sharecast.com.