Close Brothers eyes asset management growth after division doubles profits

Close Brothers is set to grow its asset management arm after boosting profits and AUM last year.

The merchant bank and financial services company made a pre-tax operating profit of £195.7m for the year to 31 July, up from £163.8m.

Close Brothers’ Asset Management made £9.9m, more than double the previous year.

Its assets under management increased 7 per cent to £9.7bn. Net investor inflows were £438m and market movements accounted for £187m.

Close Brothers says the asset management business is likely to grow in the coming years.

“The division is well positioned to build further scale through organic growth, infill acquisitions and selective portfolio manager and adviser hires,” it says.

“In 2014 we recruited a number of portfolio managers in our high net worth business and will seek to recruit selectively over the next few years to enhance our proposition and benefit from the structural market opportunities created by the Retail Distribution Review.”

Close Brothers chief executive Preben Prebensen, says the company is still rolling out its strategy of refining its specialist propositions, which is bearing fruit through improved profits across the business.

“We are well positioned to benefit from the growth opportunities we see in each of our businesses and have the resources available to pursue them,” he adds.

A jump in investors’ risk appetite and better market conditions boosted the profits of Winterflood, the company’s securities division, by 57 per cent. Winterflood made an adjusted operating profit of £26.6m for the year.

The banking arm’s adjusted profits were 15 per cent higher than the previous year, at £181.6m.

Since the interim results published in March, several changes have been made to the company’s board.