London asset manager Polar Capital reported an 18 per cent plunge in profits today after a turbulent period on the markets saw its performance fees dive.
Profit before tax fell 18 per cent to £62.1m in the year to March 31st, as a surge in operating costs choked off a 7.6 per cent increase in total income to £225.7m. Core operating profit, which measures management fees less operating costs, rose 35 per cent to £69.4bn.
Polar Capital boss Gavin Rochussen said it had been a “challenging year” for the firm after it had benefited from a host of “covid-19 winners” the year prior.
“The group’s strong balance sheet and range of differentiated fund strategies, supported by our performance led approach and our strong culture, positions us well to weather the current backdrop of inflationary pressures, macro uncertainty, rising interest rates and market volatility,” he said.
At the end of March, assets under management had risen 6 per cent to £22.1bn, with 31 per cent attributable to net inflows and the remaining £867m down to investment performance the firm said.
Analysts at Peel Hunt said the results were “solid” but the firm had been rocked by market turbulence.
“Whilst the business has been making good progress, the deterioration in market conditions in recent months is proving difficult for Polar,” the company said in a research note.
Shares in the firm were trading up over three per cent today at the time of writing.