Edinburgh-based fund manager Walter Scott & Partners said its assets under management — discretionary and advisory — slipped 2% to £72 billion in the year to December 31, 2024.

The Edinburgh asset management firm said its two main investment strategies “did not fare as well as their benchmarks.”

In the case of its global strategy, the firm said returns were largely affected by “what they were not invested in (mainly Magnificent Seven stocks).”

The “Magificent Seven” stocks are Apple, Microsoft, Google parent Alphabet, Amazon, Nvidia, Meta Platforms and Tesla.

Walter Scott said 2024 pre-tax profits rose 2% to £195 million, and it had year-end cash of £176 million “having paid out dividends during the year to the shareholder amounting to £179m.”

Walter Scott & Partners is a wholly-owned subsidiary of Bank of New York Mellon.

Turnover for 2024 rose 4% to £314 million.

Walter Scott said the average number of persons employed by the company (including directors) during the year was 180 (2023: 174), of which four were directors.

Salaries and wages rose to £46.3 million from £44.9 million.

Director “emoluments” in 2024 fell to £9.8 million from £10.8 million in 2023.

Walter Scott said: “The aggregate of emoluments and amounts receivable under long term incentive schemes of the highest paid director was £4,028,280 (2023: £4,170,000), and company pension contributions of £37,718 (2023: £4,000) were made to a money purchase scheme on their behalf.

“During the year, the highest paid director received shares under a long-term incentive scheme. During the year, two directors chose to receive units rather than cash under the company’s long term incentive scheme (2023: two directors).”

Long term incentive costs fell to £26 million from £28 million in 2023.

Walter Scott chair Alex Hammond Chambers wrote: “Global equity markets for 2024 were marked by the continuing strength of American stocks – with the S&P Composite Index (US$) rising 23.3% following its rise of 24.2% in the previous year.

“As is well documented, these increases were dominated by the performance of the so called ‘Magnificent Seven’. In large part it was responsible for the 18.7% US$ increase of the MSCI World Index (our global strategy benchmark), following the previous year’s increase of 23.8%.

“By contrast the MSCI EAFE (our EAFE strategy benchmark) rose 3.8% (in US$) against the previous year’s 18.2%. Its rather more modest returns were particularly affected by weak currencies in relation to the US Dollar, the Euro declining c. 6% and Japanese Yen c. 10%.

“Our two main strategies – Global and EAFE – did not fare as well as their benchmarks. In the case of the global strategy, the returns were largely affected by what they were not invested in (mainly Magnificent Seven stocks).

“By and large, however, the trading performance of its investee companies continued to make good progress. In the case of the EAFE strategy the main influence on its absolute return was the decline of the Euro and the Japanese Yen …

“Again, as a generalisation the business of the underlying investee companies continued to make progress. Given that our investment time horizons are long term (at least 7 years), long term returns will be largely driven by business success rather than share price volatility.

“Given the business performance generally of our investee companies, we remain confident that they will earn good returns over the long term …”