Marshall Wace boosts profits on fund returns

Michael Bow
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LONDON-BASED hedge fund Marshall Wace yesterday posted a 20 per cent jump in pre-tax profits led by a surge in income from improved fund performance.

The company, set up by Paul Marshall and Ian Wace, improved profits from £39.4m to £47.3m for the year ending February 2012 with income from performance fees up ten per cent to £60.6m from £55m.

The firm’s operating entity, Marshall Wace Asset Management – which incurs the costs for the 100 or so staff based at its Adelphi office on the Strand ­– saw an increase in costs of 19 per cent, mainly due to increasing fund manager performance fees. Staff costs for the firm increased from £20.3m in 2011 to £28.4m.

Of the £47.3m of profits earned, around 10 per cent was paid out to the firm’s 13 partners, some £6.2m.

The hedge fund, which was set by Liberal Democrat policy guru Marshall and former derivatives trader Wace, has had a number of double digit returns on its funds this year, including a 27 per cent return on its global opportunities fund.

The firm also grew the amount of money it manages from $5.9bn (£3.7bn) to $7.7bn over the year. The firm’s developed Europe fund achieved a return of 10.6 per cent while its market neutral fund achieved 13.6 per cent.