Polar Capital  

Polar profits melt away despite AUM rise

Polar profits melt away despite AUM rise

Polar Capital has seen a fall in its profits following net outflows despite seeing assets under management (Aum) rise across almost all of its fund range due to market returns.

The equity specialist firm said in the year to March 31 operating profit excluding performance fee was down 7.6 per cent compared to its 2015-16 year, coming in at £21.8m. Its overall profit before tax was down 13.6 per cent when accounting for performance fee revenue and other expenses.

Polar Capital said Aum increased across almost all of its funds with the exception of its Japan, Emerging Markets, North American and European Long/short strategies. Overall Aum was also boosted by the inclusion of its UK Value Opportunities fund which launched after the 2015-16 reporting period.

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However, Aum growth was entirely due to market returns with the firm seeing net outflows over the 12 months. Earlier this year the firm updated markets saying its AUM had grown by £2bn to £9.3bn. This has since increased to £9.8bn by the end of May.

Chairman Tom Bartlam said: "It was another year of net outflows from our funds. The level of net outflows of £230m was however markedly lower than last year and over the second half of the year we returned to net inflows."

Mr Bartlam said the firm's Japan fund had since seen a turnaround in performance following a boost to a more value-orientated approach which occurred towards the end of 2016. However, its Global Emerging Markets strategy was still suffering "lacklustre" performance.

He added: "The poor performance of active managers in general against their benchmarks in 2016 and that of many of our own managers too, is reflected in the low level of performance fees we received last year which came in well below our expectations. This was though the 16th successive year of earning performance fees."