Bonuses are back on the agenda as Martin Currie profits rise by 25%

STAFF at Martin Currie, the employee-owned boutique fund manager, saw their multi-million pound bonus pot return after a year in which underlying profits rose by more than 25 per cent.

Although the exact figure paid out is not known, the total bill for salaries and bonuses at the Edinburgh-based group hit 28.7m last year, resulting in average salary packages of 109,675, according to its annual report published yesterday.

All of the group's 262-strong workforce are entitled to receive a share of the bonus pot, thought to be in the order of 9m, which is partly paid in shares.

In 2009 staff had foregone almost all bonus payments to protect jobs at the fund manager - which describes itself as a "big boutique" - amid tough financial conditions. The total salary bill in 2009 was 16.1m. Employees also agreed a 50 per cent bonus sacrifice in 2008.

The resumed bonus payments saw boardroom pay more than double to 3.07m from 1.19m with the unnamed highest paid director's package - including bonus - rising to 865,000 from 242,000.

Revenue at the fund manager rose to 81.6m from 70.3m. Although the bonus payments meant headline pre-tax profits fell from 20.8m to 14.1m, the company said that when the effects of the bonus payments were stripped out, underlying profits had risen by 2.8m.

Funds under management at the year end dipped to 11.3 billion from 11.8bn.

Chief executive Willie Watt said that while the echoes of the financial crisis had continued to reverberate, "the events of the past year look relatively minor when compared with the original crisis".

He said 2010 had been a year of "considered change" for the company and that 2011 was about making the most of those changes.

In June the company bought the European assets of hedge fund manager Sofaer Capital, adding approximately 191m of assets under management.

It also launched a number of new overseas funds and merged or changed the investment focus of a number of its UK funds.

The firm recently struck a deal with State Street, which has major operations in Scotland, to provide outsourcing services for all the funds it manages.

Earlier this week Scotland on Sunday revealed problems related to an investment in a Chinese printer cartridge firm Ugent Holdings, which Martin Currie had invested in on behalf of US-based mutual China Fund Inc.

Although the deal was not identified in the annual report, the company did refer to a transaction it had entered into on behalf of a client "that may have presented a conflict of interest".

"We are reviewing this incident so as to enhance our policies and procedures and ensure a similar event does not happen again," said the report.

It also confirmed that the group and its insurers had entered into an indemnity agreement with a client in relation to settlement of a potential loss although said there has been no admittance of liability or fault.

"The group does not believe that any financial liability or loss either from further claims or related matters will have a significant effect on the group's financial position or profitability," it said.