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Invesco ramps up Brooks Macdonald stake with £4.2m buy

Invesco has ramped up its backing for Brooks Macdonald from 3.4% of equity to 5.3%

Invesco ramps up Brooks Macdonald stake with £4.2m buy

Invesco has ramped up its backing for Brooks Macdonald, sinking around £4.2 million into the shares to up its stake from 3.4% of equity to 5.3%.

The purchase takes the stake, which is split between chief investment officer Nick Mustoe’s Invesco Global Small Cap fund and Adrian Bignell and Jonathan Brown’s Pan European Small Cap Equity fund, to a total value of £12.1 million at a share price of £16.50.   

Invesco has now leapfrogged Artemis UK Smaller Companies manager Mark Niznik to become the seventh largest holder of the stock, according to Reuters shareholder data.

A spokesperson for Invesco declined to comment.  

Shares in Brooks Macdonald are currently at the bottom end of a five year trading range, down more than 27% from a January 2018 high of £22 and sharply lower than the record £25.82 in mid-2017.

The company has seen the heady price to earnings premium formerly commanded by its shares evaporate, slipping from a multiple of 19 versus a peer average of 12 in 2017 to now trade in line with competitors.

Last month, Brooks Macdonald announced it would trim around 50 jobs as it sought to control costs, targeting around £4 million in savings from its administration and IT departments.

Chief executive Caroline Connellan (pictured) said in a statement: 'We regret the need to make redundancies, and those people who leave the business will do so with both our thanks for their contribution and our best wishes.'

It said its services and locations will be unaffected by the changes. In annual results in September, Brooks said efficiency savings would be a principal focus this year. It accompanied this with news it had taken a £2.5 million hit on 'obselete' tech.  

On a forecast earnings basis, the company is now among the cheapest in its peer group. Analysts tracked by Reuters rate it a buy on a five-to-one margin, up from an even split in November last year, on a median price target of £21.62.  

In a weighty sector note last month Peel named Brooks as one of the relative winners of asset management, although it warned that all of the sector would run into headwinds, and more recently trimmed its target price from £25 to £23.50.  

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