Profits at Robin Geffen’s Neptune Investment Management fell by 90 per cent in 2018, the year before Liontrust swooped in to buy the Hammersmith-based firm.
Accounts filed at companies house on August 21 show the company recorded a pre-tax profit of £101,000 for the year to December 31, 2018, compared with £994,000 for the 2017 calendar year.
The reason for the drop can be seen in the sharp decline in assets under management, which dropped from £3.6bn to £2,5bn over the year.
Robin Geffen, the company’s chief executive and founder, wrote in the annual report that “2018 saw net outflows due to volatile markets and a challenging distribution environment.”
The company replaced its sales director Daniel Lee with former JP Morgan executive Mike Parsons during the year.
It had been blighted by the exit of a number of fund managers in recent years, including high performing European equity manager Rob Burnett, who left the business in December 2018, and US equity head Ali Unwin, who quit in August 2018.
Mr Unwin was the fifth US equity head to leave the firm in two years.
One person who was added to the wage bill during the year was Mr Geffen’s son William, who became an analyst in September 2018, a senior analyst in February 2019 and was named assistant fund manager in July 2019. Prior to joining Neptune he was a student at Oxford University.
In response to declining demand for Neptune’s products the firm reduced its costs. Administrative expenses fell by £1m during the year, while the number of staff employed fell by 10 to 65.
Neptune's sale to Liontrust was confirmed on July 31 for £40m.
In a comment in the results, which was dated April 2019, chairman Jonathan Punter wrote: “It is clear that the whole investment management industry is facing significant challenges and consolidation is picking up globally, as firms seek economies of scale.
"While the board derives confidence from the strong investment performance over the past two years, it is prudently considering all strategic options to meet the challenges ahead."
Mr Geffen has a 45 per cent holding in Neptune. He and all of the other fund managers will remain with the business after the sale to Liontrust is completed.
david.thorpe@ft.com
