SCOTTISH fund management boutique Saracen Fund Managers saw profits tumble last year as assets under management fell in volatile markets and the business embarked on a major investment programme.
Turnover at the house, which moved from Glasgow to Edinburgh last year, fell 22.1% from £670,000 to £522,000 in the year to March 31 thanks to falling funds under management.
This prompted a 58.1% drop in pre-tax profit to £114,000.
Graham Campbell, the former Scottish Widows and Edinburgh Partners fund manager who became chief executive of Saracen in December 2010, said: “In the last couple of the years revenues have fallen with funds under management being affected by markets.
“What has happened since then, is there has been a lot of investment in the business.
“We have moved office from Glasgow to Edinburgh, we have a new website, new branding, a new fund. The most important thing is there is a whole lot of research going on.”
The house has also appointed a sales representative to operate in London freeing up managers to devote more time to funds.
Mr Campbell, former global head of retail funds at Scottish Widows Investment Partnership and a co-founder of Edinburgh Partners, said that what investors expect from boutique funds houses has changed.
This prompted the launch of an additional fund, the Saracen Global Income & Growth fund in the summer, which is overseen by Mr Campbell, once a Commonwealth judo medallist, as well as head of research Daniel Leaf.
The launch was the first by Saracen since Jim Fisher, its founder and executive chairman, started the UK-focused Saracen Growth Fund in 1999.
Mr Fisher manages the £38 million fund with Craig Yearman, the former Glasgow Investment Managers staffer who Saracen hired from Aberdeen Asset Management in 2008.
The company is still finalising a change of ownership, approved by the City regulator last year, that will see chairman Jim Fisher, currently 85% shareholder, relinquish overall control of the business.
No one shareholder will have overall control of the business in future, Mr Campbell said.
Despite the market turmoil, Mr Campbell remains upbeat on the prospects for equities.
“The sentiment is very fragile right now,” he said.
But he said that he can find plenty of companies with cash on their balance sheets and strong records of dividend payments.
“We think there is good value right now. We certainly are very optimistic.”
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