BlueBay sees annual profits nearly treble

LONDON-based fixed income firm BlueBay Asset Management said pre-tax profit almost tripled in the last year, boosted by higher performance and management fees after a rebound in financial markets.

Net income rose to £49.7m in the year to 30 June, up 186 per cent from £17.5m the year before.

Performance fees increased 54 per cent to £28.4m and management fees gained 32 per cent to £109m.

BlueBay said it had “good inflows and investment performance”. Its core investment grade debt products continued to account for the majority of the inflows with $8.6bn (£5.5bn) for the year.

But as the year progressed and the new credit cycle became more established, it saw
stronger inflows into other strategies with higher risk-return profiles, most notably emerging market debt with net inflows of about $1.9bn.

Meanwhile, the first two months of the new fiscal year started so well that by the end of August assets under management were about $37.4bn, up more than $3bn from the end of June.

BlueBay’s performance was “marked by robust asset growth and a significant improvement in both operating margins and profitability,” chief executive Hugh Willis said in a statement.

He added the first six months of 2011 would see several new product launches.

BlueBay plans to develop a European government bond business aimed at taking advantage of the recent deterioration in sovereign debt in European, which should favour a credit specialist.

“Good credit risk management skills are becoming an increasingly important complement to good interest rate risk management skills,” added Willis.

A global high yield bond fund is also planned for late 2010.