Polar Capital Holdings PLC AuM Update (3525P)

TIDMPOLR

RNS Number : 3525P

Polar Capital Holdings PLC

10 October 2019

10 October 2019

Polar Capital Holdings plc

AuM Update

Polar Capital Holdings plc ("Polar Capital" or the "Group"), the specialist active asset management group, today provides its quarterly update of its unaudited statement of its Assets under Management ("AuM").

Group AuM (unaudited)

Polar Capital reports that as at 30 September 2019 its AuM were GBP14.3bn compared to GBP13.8bn at the end of March 2019, an increase of 3% over the period. During the period, AuM increased by GBP467m which comprised net outflows of GBP448m offset by an increase of GBP915m related to market movement and fund performance.

 
 AuM movement in six months          Long only    Alternative     Total 
  to 30 September 2019                  funds        funds 
 AUM at 1 April 2019                 GBP12,529m    GBP1,306m    GBP13,835m 
                                    -----------  ------------  ----------- 
 Net subscriptions / (redemptions)   GBP(560)m      GBP112m     GBP(448)m 
                                    -----------  ------------  ----------- 
 Market movement and                  GBP868m       GBP47m       GBP915m 
  performance 
                                    -----------  ------------  ----------- 
 Total AuM at 30 September           GBP12,837m    GBP1,465m    GBP14,302m 
  2019 
                                    -----------  ------------  ----------- 
 

Net performance fees (unaudited)

The table below sets out the position relating to net performance fee profits due to the Group (after the deduction of staff interests) as a product of accrued performance fees in funds managed by the Group three months before the strike point of such performance fee receipts. The majority of the Group's performance fees crystallise in the second half of the financial year.

 
 Performance fees               Six months        Year to      Six months to 
                                     to 
  net of staff allocations       30 Sept 18       31 Mar 19      30 Sept 19 
                                                 (year-end) 
  Received                          GBP5.5m         GBP24.0m         GBP3.3m 
                              --------------  --------------  --------------- 
 Accrued but not yet earned         GBP27.0m          n/a           GBP0.9m* 
  in funds with year ends 
  on or before the financial 
  year end 
                              --------------  --------------  --------------- 
 Total net performance              GBP32.5m        GBP24.0m         GBP4.2m* 
  fee profits 
                              --------------  --------------  --------------- 
 

*the figures are reduced by GBP2m of net performance fee distributions that relate to prior accounting periods that IFRS require to be deducted from this year's receipts.

As is usual at the time of releasing this update, three months before the crystallisation of performance fees, we disclose the profits that could be due to Polar as a function of the amount of accrued performance fees in our funds as at the end of September. There is no certainty that the fees will be sustained over the next quarter, as performance fee receipts are extremely volatile.

Gavin Rochussen, Chief Executive, commented:

"The last quarter has been a challenging period with net outflows of GBP598m following the GBP150m of net inflows in the previous quarter.

"As communicated at the time of releasing our year-end results in June, the Japan team has undergone changes following the departure of the long-standing manager of our Japan Fund. The team is focused on the Japan Value Fund which has compelling performance and will benefit from greater AuM following the imminent merger of the two funds. Net outflows in the six months from the Japan Fund following the communication of the manager departure and fund merger have been GBP400m. As at 30 September, the Japanese equities team was managing GBP314m.

"In the six months, two long-standing clients redeemed in excess of GBP500m from two of our highly rated funds, the Polar Capital Technology Fund and the Polar Capital Healthcare Opportunities Fund to take profits and reduce risk in their underlying client portfolios. This has provided the Technology and Healthcare strategies with additional capacity where the demand for their funds is robust.

"Notwithstanding the GBP900m headwind created by the Japan Fund redemptions and the client redemption from Technology and Healthcare, it is reassuring that, despite the economic and political uncertainty over the last six months, we have had net inflows into the majority of our funds including: Global Insurance, UK Value, European Income and Emerging Market and Asia with positive net inflows of GBP112m into our alternative fund range which includes our Convertibles and UK Absolute products.

"While accrued performance fees are materially less than the previous year, fees are volatile, and the position three months ago was more in line with last year. There are still three months to the end of the calendar year when performance fees crystallise. We remain confident that our active fundamental fund strategies will continue to deliver above average returns over the long term for our clients."

For further information please contact:

 
 Polar Capital 
  Gavin Rochussen (Chief Executive) 
  John Mansell (Executive Director) 
  Samir Ayub (Finance Director)          [phone] 
 Numis Securities Limited - Nomad and 
  Joint Broker 
  Charles Farquhar 
  Stephen Westgate 
  Kevin Cruickshank (QE)                 [phone] 
 
   Peel Hunt LLP - Joint Broker 
   Guy Wiehahn 
   Andrew Buchanan                        [phone] 
  Camarco 
   Ed Gascoigne-Pees 
   Monique Perks                           [phone] 
 

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October 10, 2019 02:00 ET (06:00 GMT)