Polar Capital shakes off August’s market meltdown

Polar Capital has reported an uptick in assets under management (AuM) after the specialist fund manager shook off a hit from August’s market meltdown.

The London-listed firm said on Thursday that its AuM came in at £22.7bn as of 30 September, 2024, up four per cent from £21.9bn in the prior six months.

Still, this figure was down compared to £23.5bn in AuM at the end of June.

Chief executive Gavin Rochussen blamed a “more challenging market environment over the last quarter” for the drop in AuM, mainly driven by the worldwide equity sell-off in early August.

Polar saw negative market movement and performance of £655m after the sell-off, as well as net outflows of £172m which it said was driven by mandate redemptions.

That meltdown, stoked by Japan’s central bank raising interest rates and worse-than-expected US jobs data, put a dent in Polar’s share price – although the stock remains up 15 per cent so far this year thanks to positive trading updates.

Despite the hit, Polar still reported total net inflows of £472m over the six months to the end of September, as well as £323m in market movement and performance.

Funds in net inflows included Emerging Market Stars, Healthcare Opportunities, Japan Value, Artificial Intelligence and Biotechnology. Together, they pulled in £393m.

“There has been continued demand for a broad range of our funds during the quarter,” Rochussen said.

“We remain confident that with our diverse range of differentiated, active specialist fund strategies we are well-positioned to perform for our clients and shareholders over the long term.”

Analysts at Peel Hunt said in a note: “Polar is well positioned for when market conditions improve sustainably, with strong products, distribution and financial returns.”

“Although there were a small number of clients redeeming from segregated mandates, flows into a range of funds remained robust,” they continued.

The broker reiterated its buy recommendation and 665p price target on the stock.