Milford Funds saw annual profits spike by over 40 per cent in the 12 months to March 31 this year, according to its latest accounts.
The Milford accounts, filed last week, report an after-tax profit of more than $15 million in the 2014/15 year compared to $10.5 million in the previous annual period.
Over the year revenue hit close to $45 million, an increase of almost $10.6 million on the March 2014 results. Milford’s gross income was predominantly from fund management fees of $44.6 million, split between $23.3 million in base fees and $20.3 million of performance fees ($15.4 million and $18.9 million respectively in the previous year).
Milford Funds paid out about $18 million in management services fees to its parent company, Milford Asset Management, during the year.
The management service fee covers Milford operational costs, including remuneration of key staff.
“It is not possible to separately identify the amount of key management personnel’s compensation within the total management services fee of $18,008,492 (2014: $15,184,148),” the accounts say.
During the period Milford Funds also returned a $12 million dividend to the parent company. (After balance date, parent firm, Milford Asset Management, paid out a $1.5 million fine to the Financial Markets Authority – FMA – without admitting liability to market manipulation charges lobbed by the regulator.)
Meanwhile, Milford Asset Management updated its share register at the end of August, showing an increase in holdings for staff, including portfolio manager, Mark Warminger, who is currently facing market manipulation charges in a civil case brought by the FMA
Warminger received a Milford equity top-up of 3,825 shares in August, seeing his shareholding in the company rise to 1.9 per cent from 1.7 per cent in January this year. The portfolio manager, now on ‘extended leave’, picked up his first tranche of 2,647 Milford shares last October, rising to 17,647 the following month and 32,647 in January this year.
It is understood Warminger filed court documents last week in relating to his defence against the FMA market manipulation charges.
Since the FMA market manipulation case became public, Milford has seen a slight drop-off in funds under management, losing an estimated $200 million or so in wholesale mandates.
According to the NZX-owed research house, FundSource, Milford saw total funds under management (FUM) fall by about $330 million over the three months to the end of June this year. FundSource figures put Milford’s FUM at just over $3.35 billion as at June 30, compared to $3.68 billion three months prior.
Over the 12 months to the end of March, the Milford KiwiSaver scheme saw FUM rise by almost 64 per cent to reach more than $428 million at the end of the period.
Last week the manager also filed a new prospectus for its KiwiSaver scheme detailing previously reported changes to performance fee calculation methods. Milford managing director, Anthony Quirk, told Investment News NZ earlier: “There is no ‘standard’ way to run this type of methodology and it is very complex. It has taken a lot of investigation and modeling for us to reach the new methodology outcome.”