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Geffen vows Neptune is 'stronger' after 17% profit fall
by Robert St George on Sep 20, 2013 at 10:48
Neptune founder Robin Geffen has come out fighting after describing 2012 as a 'challenging' year for both the industry and his firm.
According to a report filed with Companies House, Neptune’s assets under management fell by 7.5% to £5.8 billion, income by 14% to £85 million, and gross profit by 17% to £46 million in the year. Fixed costs climbed by 13% to £25 million, although this was offset by a 25% drop in variable staff costs, thanks to lower bonuses.
Over the 12 months to the end of December fee income from management fees also slipped by £13 million to £83 million, with gross profit margin falling from 55.4% to 53.6%.
Jonathan Punter, Neptune’s chairman, has described performance in 2012 as ‘disappointing’ after the company saw both assets under management and profit tumble.
On the positive side the company received a £1.2 million refund from the Financial Services Compensation Scheme levy over the period, after successfully resubmitting its tariff data.
In the report Geffen, the firm’s chief executive (pictured), described 2012 as ‘another challenging year for both Neptune and the fund management industry as a whole’.
As factors behind Neptune’s difficulties last year, Geffen cited a ‘hugely challenging sales environment, when equities were shunned in favour of fixed income and investors sought perceived safe havens’ as well as specific internal allocation calls.
Geffen maintained that Neptune had broadly taken the correct stance despite the ‘market noise’ but acknowledged some mis-steps. ‘With the benefit of hindsight, our sectoral weightings in 2012 were too geared towards cyclical plays in materials and industrials and we were underweight the recovery in global financials, given their poor fundamentals,’ Geffen explained.
Nevertheless, Geffen pointed to several more encouraging developments that left Neptune ‘stronger and with renewed confidence’.
First, he singled out three specific fund managers at Neptune for praise: Citywire AA-rated Mark Martin on UK Mid Cap , Chris Taylor on Japan Opportunities , and Thomas Smith on Latin America . The former pair are both long-term top-quartile performers in their sectors, while Smith marked his one-year anniversary in sole charge of his fund by quadrupling the return from his benchmark MSCI EM Latin America index.
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- Neptune Russia Special Situations A Acc GBP