Ashmore, the emerging markets-focused UK asset management group, has confirmed net inflows over the turbulent last six months of 2011, in spite of poor performance across its range of funds.
Investors added $700m to Ashmore funds in aggregate over the period, which saw heavy redemptions hit many of the company’s peers and a sharp fall in appetite for risk assets among investors.
Gains through flows were more than offset, however, by a steep fall in the value of Ashmore’s funds’ investments, the company revealed in its interim half-yearly report on Thursday morning.
Ashmore reported $6.1bn of second half performance-related losses, with more than a third coming from its equity strategies alone. The painful drop in funds compares with a gain of $2.3bn in the first half of last year.
The bulk of the losses, as previously reported, were suffered in the third calendar quarter and were somewhat mitigated by a partial recovery in the last three months of the year.
Overall, Ashmore’s assets under management dropped from $65.8bn at the end of June to $60.4bn at the end of December.
Mark Coombs, chief executive, said financial performance – which saw a marginal increase in profits from the same period in 2010 – was “satisfactory”.
Total net revenue for the company rose 4 per cent to £181m compared with £173.7m in the last six months of 2010, ahead of expecations, though the numbers were largely flattered by the reversal of foreign exchange-related losses.
Operating profits fell from £125.8m in the last six months of 2010 to £121.6m in the last six months of 2011, but rose overall after tax from £96m to £96.1m thanks to accounting adjustments to group liabilities – again beating analysts’ expectations.
Management fees rose 30 per cent to £151m compared with the same period in 2010 but performance fees fell by just over 60 per cent to £23m.
The company reported basic earnings per share of 13.83p and announced an interim dividend of 4.25p to be paid on April 4.
The performance outlook for 2012 is healthy, according to Mr Coombs.
“The consensus forecasts for global GDP growth have reduced over the last six months but it is clearer than ever that emerging markets are the driver of global growth,” he said.
“The gap between emerging and developed market growth may widen even more in 2012.”
Further quantitative easing from developed market central banks would likely be a boon for emerging-market asset prices, as it has been on previous occasions, Mr Coombs added.
“Emerging asset classes offer considerably more value than then, having been caught up in the Europe-induced general ‘risk off’ mentality of the last quarter of 2011.”
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