Artemis hunts down £100m in profits in record year

The sharp rise in profits, a figure which does not include members' remuneration, and payments to US part-owners Affiliated Members Group, will be seen as further vindication of Artemis's house strategy of avoiding fund management "discount wars" and maintaining fixed fees for managing growing net inflows, which last year hit a record £2.4bn.

However investment analysts also note the firm's readiness to compete keenly for funds where necessary, for example unexpectedly winning the £30m Mid Wynd International Investment Trust from Edinburgh rival Baillie Gifford in May last year.

Profit and loss accounts for the previous year, 2013 put "members' remuneration" at £51.5m or 62 per cent of the gross figure. An equivalent proportion of the 2014 figure would mean around £63m being distributed amongst Artemis's 130 London and Edinburgh-based employees including its 37-strong investment management team, and in dividends to part-owners and others. These include "Bidco", the vehicle by which Artemis's owners bought back the firm in 2010 after selling it to Fortis two years previously.

Artemis declined to comment on the unaudited figures but Dick Turpin, the firm's spokesman and head of asset gathering, said yesterday "We aim for consistency of fund management style. Our performance is up there with the best and the money flows in."

Artemis will this year celebrate 10 years of its aggressive and highly successful "profit hunter" billboard advertising campaign which encapsulates its pitch to private retail investors. Prominent in airports, buses and taxis, the campaign has proved one of the most durable in the financial services industry, its jocular imagery of exploration and quest proving equally serviceable during economic downturns as well as boom periods.

Originally best known for its performance in UK equities, Artemis has beefed up its global and European teams in recent years. In the course of 2014 Artemis launched six new funds, five of them covering the US and one Europe. These include the US Smaller Companies Fund, the US Absolute Return Fund, the US Equity Fund, US Selected Fund, the US Extended Alpha Fund and the Pan European Absolute Return Fund.

The firm also strengthened its US-facing team hiring seven of Threadneedle Investments' North American equities team - Cormac Weldon and Stephen Moore, plus fund manager William Warren and analysts Olivia Miller, Chris Kent, Nafis Chowdhury and Paul Gannon.

In 2008 John Dodd and Mark Tyndall, senior members of Artemis's founding quartet netted more than £50m apiece from the sale of their stakes to majority owner Fortis. Belgian-Dutch bank Fortis paid £317.2m for the management's 32.9% holding in the firm, valuing the whole business at £964m, After two years, during which Fortis joined forces with RBS and Santander in the catastrophic purchase of ailing Dutch bank ABN Amro, the founders and senior managers of Artemis invested tens of millions of pounds in a deal to buy back the firm from then owners BNP Paribas' Fortis Bank.

While no figure was disclosed, industry analysts believed the price paid to be less than a third of the £964m the business was valued at when Fortis took full control.

In Reckless, his 2010 history of the City of London, banking specialist Philip Augar credits Artemis with pioneering a retail-focused strategy that "avoids bureaucracy", quoting founder Mark Tyndall as saying that "fund management is a business that can very easily be over-managed", and dismissing so-called management by committee.

"We like products where one person can manage that portfolio. We consult but there's no such thing as a team decision. The fund manager is the guy with whom the buck stops."

The firm has offices in Edinburgh and London and, as of December 2014 it managed £20.3 billion of assets.