AUM slightly down, FY23 forecasts unchanged
AUM fell 1.6% over Q3 of FY23 (to 31 Dec 22) to £18.47bn. Over the first nine months of the FY the AUM fall totalled 16%, although this was heavily impacted by the significant sell off in technology stocks in Q1 (Apr – Jun 22). Net outflows totalled £304m during the quarter, lower than the £529m recorded in Q2 and the £316m of Q1. Market movements and investment performance contributed +£19m over the quarter (Q2: +£342m; Q1: -£2,393m). The closure of Phaeacian mutual funds in Q1 resulted in a -£469 impact on AUM.The lower net outflows of the latest quarter and two consecutive quarters of positive investment performance suggests a degree of positivity in some of the major sectors Polar is exposed to, and perhaps some stability in the most significant technology sector. More specifically, Polar has reported:
• continued demand and inflows into the Global Insurance, Healthcare Blue Chip, Smart Energy and Emerging Market Stars funds, with combined net inflows of £190m in the quarter;
• a continuing decline in the rate of outflows from its open-ended Technology funds, with £217m of outflows in Q3 compared to £252m in Q2 and £380m in Q1.
This latest AUM update suggests Polar is on track to meet our previous FY23 forecasts, which remain unchanged (we will revisit forecasts & valuation with the Q4 AUM update in April), as does our fundamental valuation of 600p per share (20% above the closing 11 Jan 2023 share price). We also highlight that Polar’s PER of 9.8 is significantly below the 12.2 median PER of a UK-listed active fund manager peer group.
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.
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