Edinburgh plans disposals as profits plunge
UK – Edinburgh Fund Managers is looking to dispose of its private client business and administrative unit following a 57% fall in profits.
EFM says it is reviewing its business strategy and “actively seeking opportunities to dispose of parts of the business which do not match”. A spokeswoman for EFM added that it is currently in talks with third parties about the private client business, and the possible outsourcing of its administrative business.
And a spokesman added that a sale of the private client arm would reinforce EFM’s balance sheet. As for the administration business, EFM would probably enter into a strategic partnership.
EFM said it would focus on expanding its retail independent financial advisor, or IFA, franchise and its investment trust business. It would also focus on venture capital via its Northern Venture Managers division as well as specialist institutional mandates concentrating on UK equity and venture capital portfolios.
For the year to the end of January 2003, EFM posted a 57% drop in pre-profits 2.78 million pounds (4.1 million euros) - down from 6.51 million pounds the year before. Assets under management fell 42% to 4.1 billion pounds from 7.1 billion pounds.
It said that the decline in assets was due to market conditions and the loss of a 1.1 billion euro mandate for the Edinburgh Investment Trust.
It added that it cut its costs by around 11 million pounds through staff redundancies and the closure of its North American offices throughout 2001 and 2002.
Despite the cost cuts, chairman Charles Nunneley, said: “We have also had to absorb over four million pounds extra expense through increased pension contributions, and the cost of the decision to cease soft commission.”