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Europe concerns drive Henderson retail outflows of £4.6bn

Europe concerns drive Henderson retail outflows of £4.6bn

The full year results for Henderson Group recorded net retail outflows for 2016 of £4.6bn driven by reduced risk appetite and moderating demand for European products.

The outflows were driven mainly by the £2.6bn shed from the firm’s retail Sicavs, along with £1bn from the UK Oeic and unit trust range. But while net institutional inflows of £607m during the year provided some offset, the combined net outflows for the business reached £4bn. 

In spite of this, assets under management for the firm increased by £10bn to £101bn following strong market and foreign exchange performance of £13bn. This saw retail assets under management increase to £59.4bn by the end of December, up from £56.9bn at the start of 2016. 

Andrew Formica, chief executive of Henderson, noted in the results statement: “In terms of client demand, we experienced outflows from our retail client base this year mainly as a result of a global pullback from exposure to European assets. Whilst disappointing, we see this as a result of the current environment rather than a longer-term trend.”

The annual results highlighted the increase in outflows in the aftermath of the EU referendum, including an acceleration of outflows from the Henderson UK Property fund, while the outflows from the retail Sicavs “were most acute in the last week of June 2016, immediately after the UK referendum”.  

Henderson, however, noted the diversity of its product range "helped to mitigate the impact of the referendum", as it pointed to the demand for UK absolute return and fixed income strategies.

Mr Formica added: “It will be many years before the effects of this decision [Brexit] are truly apparent, but in the short term, the operational implications for Henderson are relatively contained. We will continue to serve our European retail clients through our EU-based product range, managed from Luxembourg, and do not expect any immediate change in our relationship with our Institutional clients.”