Henderson profits to fall 50 per cent

HENDERSON, the fund manager that acquired failed rival New Star, yesterday warned that its first half profits are likely to be 50 per cent lower than last year as its assets under management continued to plummet.<br /><br />In a trading update the group warned it will report its first-half pre-tax profits were between &pound;25m and &pound;28m, including a modest positive contribution from New Star, which it bought earlier this year.<br /><br />The profits are significantly lower because investors have pulled capital out of the group&rsquo;s funds &ndash; fund managers make much of their income from charging fees based on a proportion of the assets they manage.<br /><br />But chief executive Andrew Formica said investors are showing signs of improving confidence<br /><br />&ldquo;The second quarter saw a far more encouraging trend in terms of inflows as people started moving away from cash,&rdquo; chief executive Andrew Formica said.<br /><br />&ldquo;We are seeing the retail investors come back to equity products and on top of that our hedge fund range is seeing positive flows,&rdquo; he said.<br /><br />The group said it mustered new client investments of &pound;300m from retail clients and &pound;900m from institutional customers in the second quarter. This follows &pound;3bn of outflows in the first quarter of the year.<br /><br />Henderson Group shares rose by almost 17 per cent this week in anticipation of a strong update, but they fell 8.4 per cent to 95p yesterday.