UK fund manager Terry Smith was paid more than £36mn last year as his investment boutique Fundsmith posted a bumper annual profit.

The fund company, which Smith established in 2010, reported record annual profit after tax of £58.2mn in the 12 months to the end of March last year, beating the previous year’s record of £57.7mn.

According to the company’s accounts, Smith was handed £36.4mn of the company’s profits as the highest paid employee. Smith is the ultimate controlling party, as he owns more than 50 per cent of the company’s voting rights.

Smith, who is based in Mauritius, focuses on investing in a small number of businesses that he deems “high quality, resilient, global growth companies that are good value” and that he holds for the long term.

He is considered one of the UK’s top stockpickers, while his flagship £22.5bn Fundsmith Equity Fund is popular among retail investors.

Despite the company’s bumper profit, the Fundsmith Equity Fund had a testing time for the remainder of 2022, meaning that returns over the whole year fell 14 per cent.

The 2022 accounts also showed Smith’s Mauritius-based business, called Fundsmith Investment Services, charged the UK company £252mn in fees. FIS provides investment management trading services to all Fundsmith funds, although there are no accounts for FIS, so Smith’s fees from this business are not disclosed.

The fund manager’s style of investing in growth stocks has come under pressure from rising interest rates and the rout suffered by shares in technology companies.

Smith’s top holdings in his flagship fund include Microsoft, medical technology company Stryker, and luxury consumer businesses such as L’Oréal, Estée Lauder, and LVMH.

His fund was also hit last year by holdings in US payments group PayPal and Facebook owner Meta.

Smith argued at the time that the fund did not aim for “short-term gains.” The fund has returned 478 per cent since it was launched in 2010.

Smith, who was previously chief executive of stockbroker Tullett Prebon, attracted attention last year for his views on consumer business Unilever.

Unilever last year made bids for pharmaceutical company GSK’s consumer health division, which were rejected. Smith called this a “near-death experience” and called on management to focus on improving the business rather than pursuing large-scale acquisitions.

Smith also announced last year the closure of his £320mn Emerging Equities Trust as a result of its performance. The trust’s share price had lagged behind the MSCI Emerging and Frontier Markets index for nearly five years.

Fundsmith declined to comment.

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