A best-in-class active fund manager
Polar Capital Holdings plc is an AIM-listed fund management group, specialising in active management, with £22.8bn of assets under management (AUM). The group is a notable performer on a multitude of metrics – including investment performance, AUM inflows, revenue generation, operating profits, and dividends – yet its share price trades at a significant discount to our fundamental valuation of 1,305p and its PE ratio of 12.7 is substantially below the sector median of 33.5. We see sound reasons for a significant change in rating.While revenue and profitability are exposed to slightly more volatility than most peers (due to the significance of perf. fees), and Polar has heavy exposure to the technology sector (49% of AUM, up from 28% in FY18, because of strong returns and inflows), we do not think this justifies its lowly rating given the powerful investment case. 1305p / share is our calculation of fair value.
Polar Capital Holdings is an investment management company providing professional and institutional investors a range of geographical and sector funds. Co. manages 25 funds and four managed accounts across a range of long only and alternative products. Co. has one class of business, being the provision of investment management and advisory services. As of Mar 31 2017, Co. had total assets under management of £9.27 billion.
Equity Development enables companies to become better understood and supported by investors. Since our launch in 1996 we have consistently focused on helping our clients improve their communication and relationships with both existing and potential shareholders. Our clients have come from a wide variety of sectors and domiciles, are both private and quoted and range in size from micro-cap to $multi-billions. We offer free access to company research notes written by experienced analysts. These notes include detailed forecasts, financial models and a fair value. We host regular Private Investor Forums at which investors have the opportunity to hear company directors present, and to ask questions. These are free to attend. We broadcast live Webinars with company management that include active Q&A. We also make the recordings available online. We arrange face to face meetings between private investors and company management. We are active users of Twitter, commenting daily on company news, share price moves, Directors’ Dealings, Equity Development Research Notes & Events.
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