Markets sell Ashmore despite $1bn asset rise

 
Michael Bow
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ASHMORE Group, the emerging market money manager, yesterday said it enticed more than $1bn (£622m) from investors in the last three months of 2012, led by increased demand for local currency and corporate debt funds.

The FTSE 250-listed manager, spun out of Australian firm ANZ by billionaire Mark Coombs in 1999, hit $71bn in assets under management, according to second quarter figures released yesterday, an increase of 4.4 per cent from the previous quarter.

But the rise failed to stem a sell off in Ashmore yesterday, as investors took a cautious approach to the firm’s ability to translate asset growth into profits. It finished the day 3.23 per cent down.

Ashmore, which has boots on the ground around the world including in Brazil, Colombia, China and India, added $2bn to its funds from better investment performance, and $1bn inflow from new business, it said.

Between October and December, it increased its corporate debt funds – which plough money into bonds issued in up to 80 emerging market countries – by nearly 35 per cent, and its local currency fund by nearly 16 per cent.

But allocations to alternatives plunged about 15 per cent, reflecting a drop in Ashmore’s alternatives investment performance, and the size of its equity basket also fell about six per cent as investors pulled money from the funds.

Analysts said tight margins could scupper a surge in profits into the future, leading to a minor sell off yesterday.

Numis analyst David McCann said: “Ashmore has the short term challenge of declining fee yields and an eroding [...] margin. Therefore, future actual earnings growth may be much lower than the [asset] growth opportunity suggests.” Ashmore announces interim results on 21 February.