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Terry Smith bags £8m as Fundsmith profit rockets

Profit at Terry Smith's investment firm more than quadrupled in 2017 to £14.2 million as assets under management surged beyond £10 billion.

 
Terry Smith bags £8m as Fundsmith profit rockets
 

Terry Smith has seen his income surge on the back of a stunning year for his investment firm. 

According to accounts filed with Companies House, Fundsmith's profit in the 12 months to 31 March 2017 jumped from £2.9 million to £14.2 million. Turnover almost doubled from £41.6 million to £81.7 million. 

The increase in profit and revenue was driven by a surge in assets under management, from £5.9 billion in 2016 to £11.1 billion as at 31 March. Assets have since increased to £13 billion.  

The rise in assets was also a factor behind a sharp increase in administrative costs over the reporting period, which escalated from £38.7 million to £67.5 million.

As of 31 March 2017, the LLP had five members: Terry Smith - who owns around 50% of the business - alongside Mark Laurence, Simon Godwin, International Value Investments and NoLeLu II.

The bumper 2017 meant Smith's profit entitlement soared from £1.6 million in the previous year to £8.1 million in 2016/17.  

The results mark the first set of numbers since Citywire revealed Smith (pictured)  had officially moved to Mauritius at the start of last year. 

He launched Fundsmith in 2010 and his flagship Fundsmith Equity fund - which now controls more than £10 billion - has been one of the best-selling funds in the UK for several years thanks to its stellar performance. 

In the five years to the end of November 2017 the fund has returned 174.3%, more than double the 85.7% gain in the peer group. Since its launch in November 2010 the fund has returned 261.7%.

At the end of last year Fundsmith said it would be launching a sustainable global equity fund based on a mandate Smith has run on behalf of Comic Relief. 

Smith also confirmed that he, alongside other members of the investment team, would be investing a combined £10 million into the new fund. 

The fund will be the third strategy in Fundsmith's stable, sitting alongside the Fundsmith Equity and Fundsmith Emerging Equities  (FEET) investment trust.

11 comments so far. Why not have your say?

halfinchnut

Jan 09, 2018 at 17:16

Peanuts compared to the growth in his own holding in the fund, he invested heavily at the start, put his own money up, and has been rewarded, as have the investors who followed him, a fabulous investment so far.

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Chris Hayes

Jan 10, 2018 at 11:39

as at 1140...

The "Fundsmith Equity" link links to FEET.

The "FEET" link reloads the current article.

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Daniel Grote - Citywire

Jan 10, 2018 at 12:08

Sorry Chris, that's been fixed now.

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Dennis .

Jan 13, 2018 at 09:36

The sustainable global equity fund is only available for institutional investors unless you have a £1m or so to invest.

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Dennis .

Jan 13, 2018 at 09:41

This has been by far the best and most consistent investment that I ever have made and my family has in total around £400k invested in it . In fact the performance has been so good that we often have discussions along the lines of "too good to be true" and Bernie Madoff etc. The only other similar investment vehicle that I am using is Lyndsal Train Global Equity unless someone can suggest something else for diversifying.

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tony slimmings

Jan 13, 2018 at 11:09

Ditto Dennis. and I am pleased with both..

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Ed the 5th

Jan 13, 2018 at 11:33

It's my biggest active investment also, Dennis - followed by less with Lindsell Train. Rest is in trackers; I sleep peacefully at night..

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Dr. Meldrew

Jan 13, 2018 at 12:21

I'm confused about FEET and would appreciate any insight...

I've looked into this IT previously and again today after reading many fans giving "too good to be true"-type comments. Certainly some big fans out there...

But... Morningstar gives it 1 of 5 stars; and no Gold/Silver/Bronze rating. They report a 3Y annualised Total Return of 6.24%; well below the Category Average for the "Morningstar Investment Trust Global Emerging" sector.

The "Lindsell Train Global Equity D" OEIC has 3Y annualised TR of 22.94% according to the same source. And the FGT IT (also Lindsell Train) reports 14.76% TR over the same period.

So, what am I missing? Thanks in a advance.

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Dennis .

Jan 13, 2018 at 13:43

You are confusing Fundsmith Equity Fund with FEET. Very different beasts. I haven'y got anything in FEET yet.

https://www.fundsmith.co.uk/fund-factsheet

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Dennis .

Jan 13, 2018 at 13:48

The other thing about Fundsmith is that they will hold the units for you as an ISA or nonISA with no extra charge whereas HL charge you 0.45%. They are fairly unique in this respect. The only benefit of using HL is that you can move stuff around quickly whereas with holdings directly in Fundsmith it takes some time to get your money out and they are not allowed to hold cash on your account.

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Dr. Meldrew

Jan 13, 2018 at 15:10

Thanks for clarifying, Dennis.

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