UPDATE 1-Polar Capital boasts rising assets and fee income

Fri Jan 11, 2013 8:48am GMT

Quotes

   

* Shares rise 6.2 pct to 230 pence as analysts upgrade

* Books 18 pct rise in assets to $6 bln, fees up

LONDON Jan 11 (Reuters) - Specialist investment manager Polar Capital reported forecast-beating rises in new business and assets under management for the nine months to Dec. 31 as a robust performance drew more clients to its funds.

Against a backdrop of underwhelming performance for alternative fund firms in 2012, Polar grew its assets under management by 18 percent to just over $6 billion during the period, with net inflows up $518 million in its fiscal third quarter alone.

Shares were up 6.2 percent to 230 pence at 0837 GMT, outperforming a 0.1 percent rise in the FTSE All Share index .

Over the nine-month period, Polar won $923 million of net new business across a range of hedge and long-only fund strategies, highlighting its broad appeal to investors chasing income amid languishing bond yields and erratic equity returns.

The company earned performance fees of 5.1 million pounds ($8.2 million) in the nine months, compared with 3.7 million pounds a year earlier.

Analysts at Numis upgraded their recommendation on the stock to 'add' from 'hold' following publication of the results.

"Assets under management at $6 billion is 5 percent ahead of our estimate, driven by both stronger than expected quarterly flows and performance. Encouragingly, this has come across the fund range rather than being concentrated in one area."

In its interim results statement in December, Polar flagged good inflows into its Emerging Markets Income fund, North American fund and Healthcare fund.

"Polar has the potential to deliver decent medium term assets under management growth from organic growth, performance and possibly further selective acquisitions or team hires, which should lead to significant growth in both quality and quantum of profit," the Numis note continued.

Hedge funds which bet Europe's debt crisis would worsen were last year's big losers, lagging those that risked an upbeat stance, data on funds' performance showed.

The average fund was up 6.2 percent in 2012, behind most major equity indexes.