Polar Capital saw a £3.3bn reduction in assets under management in the six months to September 30, a month the chief executive officer of the firm described as ‘brutal’.
The asset manager’s AUM dropped to £18.8bn in the period, according to interim results posted on the stock exchange today (November 21).
Of this £3.3bn, £2bn was due to negative market movements and fund performance, £800,000 was from net redemptions and £500,000 was in outflows from previously reported fund closures.
Excluding the outflows from fund closures, the company saw net outflows of £30mn from segregated mandates, net share buy-backs of £62mn in investment trusts, and net outflows of £753mn from the open-ended funds.
Some of the asset manager’s funds saw net investment, including its global insurance fund which saw inflows of £258mn, and £101mn invested in its emerging market stars fund range.
Gavin Rochussen, chief executive officer of Polar Capital, said the first half of the company's financial year ended on a “weak note” in global bond and equity markets.
“September 2022 was particularly brutal, with most regional equity indices falling by between 9 per cent and 12 per cent in US dollar terms.”
He added that the “unusual circumstances” resulting in bond and equity markets falling at the same time has been “painful” for investors.
“Data [suggests] that a 'balanced' portfolio of bonds and equities is experiencing its worst year for at least a century, and that a GDP weighted world government bond index is on track for its worst annualised return since 1920,” he said.
"The last six months have been challenging for all asset management firms, whatever their size or business model."
Pre-tax profits dropped to £23mn, from £31.7mn during the same period last year, though the company’s dividend remains unchanged at 14p per share.
Rochussen said he was optimistic about the future.
"At some point, as inflation stabilises and interest rates peak, investors will require increased market exposure and we are well placed to benefit from this demand,” he said, adding that there is a “strong pipeline of interest” in the manager’s strategies.
Analysts were buoyant at the firm's prospects in March, despite a drop in performance.
sally.hickey@ft.com
