Edinburgh Fund Managers' profits are doubled

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The Independent Online
EDINBURGH Fund Managers has ended a busy year with profits more than doubled at pounds 9.8m and funds under management two-thirds higher at pounds 4bn.

The company is paying a final dividend of 16p to increase the total payout by 63 per cent to 22p.

Edinburgh took on new money through the takeover of Drayton Asia Trust by its EFM Dragon Trust, its purchase of Target Trust Managers and its launch of EFM Small Companies Trust.

The inflow has continued since Edinburgh's January year-end, with the pounds 135m raised for Edinburgh New Tiger and the launch of Edinburgh Inca, the Latin American investment trust whose offer closed last week. Edinburgh Inca is thought to have taken about pounds 40m.

Iain Watt, managing director, said the launches of New Tiger and Inca could not have been better timed. The stock market falls that followed the rise in US interest rates in early February mean that Edinburgh will be able to buy stocks cheaply having raised the money when investor confidence was at its highest.

Mr Watt doubted whether the two trusts could raise comparable sums if they were launched today.

Operating profits doubled from pounds 3.9m to pounds 7.8m. But Edinburgh made another pounds 800,000 on the pounds 1m stake it took in EFM Japan, an investment trust that met with a cool reception when it was first offered in 1992.

Edinburgh's sales of unit trusts mirrored the buoyancy of the industry. Net sales of pounds 57m helped increase funds under management in unit trusts to pounds 645m.

Although this is little more than a third of the pounds 1.7bn Edinburgh has in investment trusts, Mr Watt said unit trusts made a similar profit contribution.

Edinburgh has no plans for further investment trusts in the next few months. It has hired a marketing director to give more emphasis to unit trusts.

The company has also joined the ranks of Scottish investment managers seeking US pension fund money. Its recently opened office in Atlanta is marketing the firm on its emerging markets expertise.

The private client arm in London increased funds under management by pounds 165m to pounds 400m.

The shares rose 5p to 588p.