Falling equity markets have dented performance at Henderson, the asset management group said on Wednesday, as worried investors drove equity markets lower, prompting many of Henderson’s own clients to pull their money out of the company’s funds.
Henderson, which took over its rival Gartmore earlier this year, saw its assets under management slide by 12 per cent, or £9bn, to £65.4bn in the three months to September. Most of this fall – about £5.9bn – was caused by a decline in the equity markets in which Henderson invests more than half of its assets.
About £1.1bn of the £9bn decline was due to the sale of New Star Institutional Managers, and the remaining £2bn came from investor redemptions.
“Markets were extremely challenging over the period, with significant economic concerns developing in the eurozone,” said Andrew Formica, chief executive.
“Although property and fixed income valuations were broadly unaffected, equity prices fell sharply as investors lowered their risk appetite and switched into cash. Investors have taken some comfort from the statement by the eurozone last week but, as evident this week, there are many stages to go through before the package of measures is fully implemented. We therefore anticipate uncertain and volatile market conditions for at least the remainder of this year.”
The Gartmore brand no longer exists and the company’s funds have now been rebranded as Henderson funds, or in some cases, rolled into other Henderson funds. Gartmore brought roughly £15.7bn in assets under management to Henderson in the acquisition this year.
Half of the £2bn in investor redemptions came from institutional investors, split evenly between those who had originally been Henderson clients, and those who had originally been Gartmore clients. However, the remaining £1bn in retail investor redemptions was even less, with retail investors in the original Henderson funds pulling out £692m, while retail investors in the original Gartmore funds redeemed only £254m.
Most of these redemptions from Henderson’s retail funds came from investors in the group’s SICAV funds, a type of European open-ended investment fund. This fund suffered most from retail investor skittishness, as the sovereign debt crisis roiled markets over the summer.
Henderson’s International Opportunities retail fund, which caters to US-based investors seeking exposure to Europe, also saw a large amount of redemptions, although the group’s UK-focused funds fared better.
Shares in Henderson rose 2.3 per cent or 2.6p to 117p in early trading on Wednesday.
Get alerts on Financial services when a new story is published