Terry Smith lands £36m payout despite turbulent year for Fundsmith Equity

Star stockpicker Terry Smith received a record £36m payout last year despite a turbulent 12 months for the performance of his flagship Fundsmith Equity fund. 

Smith's business, Fundsmith LLP, produced a profit of £58.2m for the fiscal year that ended in March 2022, a modest rise from the £57.7m realised the prior year, according to accounts posted on Companies House.

Under the company's profit-sharing arrangements, the member with the largest entitlement, who is thought to be Smith, received a £36.5m profit share, an increase from the £35.7m given out in 2021.

Fundsmith LLP, which oversees investments in London, Delaware, and Luxembourg, paid £251.7m in fees to Fundsmith Investment Services, a business based in Mauritius, where Smith resides. 

Fundsmith grows profits to £57m in 2021

Smith is believed to own 61% of the company, meaning he could have taken in almost £154m of these fees, taking the total of Smith's payout for the year to just over £190m. However, firms are not required to disclose financial accounts in Mauritius. 

Despite the company's steady profits, the UK's largest equity fund, which Smith runs, was hit hard by last year's growth sell-off, with Fundsmith Equity's share price falling nearly 14% in 2022, according to FE fundinfo data. 

This compared with a positive return of 22% in 2021 and 18% in 2020. The fund, which launched in 2010, has returned over 341% in the last ten years. 

The fund now holds £22.9bn in assets under management, down from a peak of about £28.8bn in December 2021, according to FE fundinfo. 

Fundsmith Emerging Equities trust proposes liquidation

Back in September, Fundsmith announced it would close down its £325m Fundsmith Emerging Equities trust.

Smith explained that while the trust has made a positive return since launch, it had fallen below expectations.

Since inception, the trust had returned 22.3%, much lower than its Global Emerging Markets sector average of 42.6% and MSCI Emerging Markets benchmark performance of 67.6%, according to data from FE fundinfo.

Fundsmith LLP was contacted for comment.