Stock market pullback sparks sell-off in City fund managers

Michael Bow
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CITY stockpicking firms suffered a rout in trading yesterday after investment banks warned the era of high-flying emerging equity markets could have reached a tipping point.

Emerging market-focused fund manager Aberdeen Asset Management closed down nearly eight per cent and Ashmore fell more than nine per cent after downgrades by investment bank Goldman Sachs.

Morgan Stanley also took a bearish stance due to fading emerging market returns.

Fund managers earn revenues from performance fees, which are closely correlated with stock market performance.

Analysts said declines in market value, especially in emerging markets, would affect the amount of cash available for managers to make money on in future.

Fund managers have been one of the strongest performers this year, with the sector outperforming the FTSE All Share by 22 per cent.

Yesterday fund manager Henderson fell 4.8 per cent, Schroders dropped 2.5 per cent and Jupiter Asset Management fell 3.6 per cent. F&C fell just one per cent, after announcing a big mandate win from the £9bn West Midlands Pension Fund.