Financial services consultancy and fund manager MJ Hudson swung to a loss this year despite an uptick in demand for its private equity and ESG products, reveal new figures published this morning.
The AIM-listed firm, founded in 2010, registered a £5.3m loss before tax on a statutory basis in the year to June, narrowing from last year’s losses of £7.3m.
Strong investor appetite for MJ Hudson’s alternative asset products, primarily involving private equity advisory services and fund management, was not enough to lift the consultancy into the black.
Matthew Hudson, chief executive of MJ Hudson, said: “There is growth in private equity and other alternative funds assets under management, as investors seek higher returns and yield.”
The company was boosted by strong demand for ESG focused products as investors seek to green their portfolios.
“Re-focus on regulation and governance, especially benefitting our market-leading ESG business, that helps clients deal with increased regulation and improve transparency,” Hudson added.
Interest among investors for alternative assets, including private equity, has grown in recent years, in part because of the low yielding investment opportunities on offer in mainstream markets.
Income assets, such as bonds, offer historically low real yields due to a toxic combination of high inflation and a record low interest rate environment, both of which eat into returns.
Private equity funds have also become major players on the acquisition stage due to the sector amassing large stocks of dry powder, which is now being used to hunt down bargain deals.
Revenue at MJ Hudson jumped to £39.8m, up from £22.3m in the previous year. The board proposed their first dividend since listing in London two years ago of 0.125p per share.
On an underlying basis, an internal accounting measure used by MJ Hudson, the firm generated a £2.4m profit before taking into consideration taxation.
MJ Hudson has around 200 employees and around 1,000 clients. It has offices in Luxemburg, Italy, US and Canada.
Its shares were up over eight per cent by afternoon trading.