Ashmore buys stake in US firm

EMERGING markets fund manager Ashmore Group has increased its assets under management (AUM) by 12 per cent to $46.7bn (£28.9bn).

The firm saw net inflows of $5.2bn in the six months to 31 December

Net revenue for the asset manager jumped 17 per cent to £173.7m, while profits before tax increased 14 per cent to hit £127.6m.

Analysts had expected the group to post total revenues of about £183.7m and pre-tax profits of about £130m.

Group finance director Graeme Dell said the firm had been hit by the weakening pound against the dollar on its foreign exchange hedges, hitting profits.

Ashmore’s results came as it announced the purchase of a 63 per cent stake in US-based Emerging Markets Management (EMM).

The firm said it bought the controlling stake to beef up its equities expertise.

Ashmore said it would pay up to $246m for the stake in a part-cash, part-shares deal.

The acquisition will bring its assets under management to $57bn and will deliver an immediate bounce in earnings.

Arlington-based EMM, founded in 1987, will continue to run its own funds.

Graeme Dell said: “We had a long stated ambition to grow our equity investment team so it does exactly that.

He added: “We anticipate it being a business where the employee continues to be incentivised by being equity shareholders in the venture, we’re delighted to have been able to have the opportunity at the transaction to complete a significant reallocation of that equity.”