Brooks Macdonald Q3 funds under management slip

AIM-listed investment management group Brooks Macdonald posted a drop in third-quarter funds under management on Friday.

In the quarter to the end of March, funds under management fell 0.7% to £11.66bn from the end of December 2017, but were up 11.5% compared to £10.5bn at the start of the financial year. Meanwhile, net new business rose £343m, but this was offset by £422m of negative market movements.

Still, this was a better performance than the MSCI WMA Private Investor Balanced Index, which fell 4.5%.

Chief executive Caroline Connellan said: "I am pleased to report that we have maintained good momentum in our business over the quarter, continuing the trend seen in the first half of our financial year, despite more challenging market conditions. The strength of our client and adviser relationships has continued to deliver robust organic growth with client sentiment remaining broadly positive.

"Weaker markets have resulted in total FUM declining slightly over the quarter. However, our investment performance has continued to be strong, demonstrating the value of good active management in difficult markets."

Canaccord Genuity said Brooks has continued to attract net inflows at a very high level, in excess of the high single-digit goal, and particularly when set against a more challenging market backdrop.

"Consistent with market conditions and our expectations in light of those, investment performance was negative, although the statement notes that ‘investment performance has continued to be strong... in difficult markets’. This does represent a degree of downside risk to our published forecasts; however, this does not cause us any concern as over the financial year to date investment performance is positive and we do not focus on quarter to quarter movements driven by market conditions.

"We continue to believe there remains significant value in Brooks Macdonald's IFA-led distribution network, particularly in more challenging conditions. This network fosters strong and deep relationships and, in our view, is the key reason behind a rate of net inflows that is markedly ahead of the other listed competitors."

At 1020 BST, the shares were up 0.7% to 1,887.50p.