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Close Brothers' restructuring pays off as AM division returns to profit
by Sarah Miloudi on Sep 24, 2013 at 07:40
Close Brothers' Asset Management has returned to profitability and posted a 9% increase in its assets under management (AUM).
With its restructuring drive now paying off, Close said the division had bounced back into the black during the year ended 31 July, and told investors that its AUM now stood at £9.1 billion, while it posted an adjusted operating profit of £4 million, versus 2012's loss of £4.3 million.
Across the group, Close Brothers' adjusted operating profit also grew by a healthy 24%, and rose to £165.5 million.
'Close Brothers has delivered a strong financial performance, with continued good growth in banking supported by an improving contribution from securities and asset management,' said Close boss Preben Prebensen, who also pointed out the results were achieved during difficult market conditions.
Focusing specifically on asset management, Close said its restructuring to refocus the business on private client wealth management was now complete and that going forward it expected to benefit from regulatory changes such as the retail distribution review.
However it also hopes to drive up assets, as while over the stretch reviewed these climbed from last year's £8.3 billion, reflecting market moves, inflows totalled £1.2 billion but outflows amounted to £1.4 billion.
Close put some of these down to normal client drawdowns, though it said some £470 million were 'specific' outflows that included three lower margin mandates as well as the maturity of legacy structured funds.
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