Ashmore profits suffer despite asset increase

Ashmore profits suffer despite asset increase

Emerging markets asset manager Ashmore announced a sharp drop in profits before tax for the second half of 2018, despite increasing its assets under management by 18 per cent to $69.5bn (£50bn).

Profits before tax fell from $122m (£88m) to $99m (£71m), with the company blaming fewer seed capital gains and foreign exchange translation for the fall.

The company announced net inflows of $7.9bn (£5.7bn), with 87 per cent of its assets outperforming their benchmarks over five years, 93 per cent over three years.The company will pay an interim dividend per share of 4.55p.

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Mark Coombs, chief executive at Ashmore Group said attributed the favourable environment for emerging markets for the 18 per cent growth in assets under management.

"We expect another good year of performance across the range of emerging markets asset classes in 2018, as economic conditions continue to be supportive, valuations remain attractive, and therefore investors continue to increase allocations,” he said.

Stuart Duncan, analyst at Peel Hunt Research, said the interim results from Ashmore were well ahead of consensus expectations, due to a combination of higher performance fees and lower costs.

"It is notable that forecasts for the full year assume a slowdown in the rate of flows, yet the statement suggests that EM assets remain in demand from investors."