Edinburgh fund entrepreneur Colin McLean has admitted it has taken “longer than expected” to stem losses at his 25-year-old boutique SVM Asset Management after it recorded a third successive loss of over £1m on turnover of £3.4m.

SVM, 98 per cent owned by Mr McLean and partner Margaret Lawson, made a pre-tax loss of £1.39m in 2014, following losses of £1.46m in 2013 and £1.66m in 2012, years when its two flagship investment trusts were grabbed by other managers and it lost a third of turnover.

Writing in the accounts just lodged at Companies House, Mr McLean says that while net revenues were up (by £37,000) and costs down (by £206,000) a £126,000 loss on disposal of investments meant the overall loss was “similar to the previous year”. The balance sheet saw a £2m fall to £16.3m but Mr McLean said the group “remains in a strong position to face the future”.

Director remuneration rose from £447,000 to £482,000 including a rise from £196,000 to £229,000 for the highest-paid assumed to be Mr McLean. The group has deferred a potential tax asset of £1.3m to reduce its tax bill on future trading profits.

Mr McLean commented that assets under management had now risen to £480m and 2015 had seen a financial turnaround as strong performance across its funds triggered new net inflows. The asset upturn follows a slide from £700m in 2010 to £450m in 2013.

He said: “The profit and loss account is one measure, but the only one that matters for us and for our clients is obviously the track records of our funds which are now very strong over five years, and in the case of Margaret’s SVM UK growth fund 10 years.”

Mr McLean said trading losses were being comfortably offset by returns on the company’s “proprietary assets” including its SVM Highlander hedge fund. “We didn’t make progress last year with the hedge fund but in three out of the last four years the proprietary assets have performed very strongly. That essentially funds the continuing development of the business and the investment we make in marketing.” The assets were currently 15 per cent ahead of last year, he said.

He went on: “The trading position is improving fairly sharply, it has taken longer than we thought, we thought we might have closed it by now but is closing and we are drawing in funds.”

Both Mr McLean and Ms Lawson are currently AA-rated by Citywire while manager Neil Veitch’s fund was approaching a five-year record and could expect to attract new funds, Mr McLean said.

He said SVM was unusual for a boutique in being largely focused on the retail market, though it had attracted some new institutional money this year. “There is more general use of platforms and panels and we are on most of the platforms, it needs pretty strong performance and sizeable funds, and we have rationalised our range.”