Thursday May 15, 09:56 AM
Henderson AuM drop 3 billion pounds in year to April UPDATE
(Recasts, adds detail, breakdown of fund flows, comment from CEO)
LONDON (Thomson Financial) - Henderson Group Plc (LSE: HGI.L - news)
. said on Thursday assets under management as of end-April fell to 56.2 billion pounds from 59.2 billion pounds at the beginning of the year due to outflows and negative returns.
The firm saw net outflows during the period of 2 billion pounds as net institutional inflows were offset by withdrawals from retail funds and by major client Pearl. Outflows from Pearl were 1.1 billion pounds during the period.
A further 1 billion pounds was lost as a result of performance and foreign exchange effects.
Assets under management in hedge funds remained stable at 1.2 billion pounds between January and the end of April, as did U.S. property at 1.3 billion pounds, private equity at 1.2 billion pounds and structured products at 1.8 billion.
Net institutional inflows during the period amounted to 800 million pounds, most of which was in fixed income products.
Net inflows into higher margin business were flat in the period, with 200 million pounds in U.S. wholesale and 500 million pounds into property. The firm has received 2 billion pounds of property client commitments which will be invested over the next 18-24 months.
Commenting on investment performance the firm said it was encouraged by recent improvements in fixed income performance, although 'somewhat disappointed' by short-term performance in equities.
Overall, the firm said it remains comfortable with the guidance given in February on net performance and transaction fees of 30 million pounds for 2008.
Commenting on the interim management statement, chief executive Roger Yates said: 'The current outlook for our property and institutional businesses, however, looks promising and we are pursuing a number of initiatives to expand our hedge fund assets over the next 12 to 18 months.'
'In general, 2008 fundraising will be biased towards the second half of the year,' he said.
'Retail investor confidence, particularly as a consequence of the credit crunch, is fragile and, as expected, flows into our wholesale funds have been subdued.
'The prompt action we took earlier this year to protect our profits, along with the diversity of our business, should enable us to achieve our financial goals for 2008.'
The firm has set itself the target of meeting or beating 2007's operating profit before tax of 109.6 million pounds and to deliver a cost to income ratio of 65 percent or less.
'Our primary focus is on profitable organic growth, but we also believe that, in these more difficult markets, we are in a good position to capitalise on other opportunities. We are actively looking for those opportunities where we can lift out teams or make bolt-on acquisitions that meet our criteria,' said Yates.
At 9.17 a.m. Henderson Group shares were down 0.38 percent at 131.25 pence.
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