Ashmore’s profits plunged during the first six months of its financial year, with the emerging markets asset manager blaming extreme market turbulence for investors’ decision to pull their cash.
The London-listed asset manager notched up pre-tax profits of £53.8m in the six months to the end of December, a fall of 54 per cent on the previous year.
Net outflows from its funds topped $7.6bn after investors pulled their cash from the market after being spooked by plunging valuations.
Ashmore said its assets under management fell 11 per cent on the previous year to close at $57.2bn for the period, dragging down its earnings before deductibles by over 30 per cent.
Mark Coombs, chief executive of Ashmore said the macro environment in 2022 was “complex” but the headwinds it produced were “now receding and leading to an increase in investor risk appetite”.
“This, combined with highly attractive valuations across equities and fixed income in Emerging Markets and low investor allocations, mean that Emerging Markets are set to continue outperforming as markets recover,” he said. “Ashmore is well-positioned to benefit from this environment, with active management delivering alpha across equity and fixed income strategies.”
Coombs has been bullish on the rebound in risk appetite this year. In a trading update last month he said the slackening of Chinese covid restrictions and deflation across emerging markets would spur a rebound in risk appetite among investors.
Money managers have suffered sharp falls in assets in the past year as nervous investors have looked to pull their money away from historic volatility and investments have plunged in value. A slew of London-based investors reported sharp falls in assets last year.
Analysts at Peel Hunt said they were positive about Ashmore despite the turbulence and it was “well placed with recovering investment performance”.
They added: “We will review our estimates after these results. For the year to June 2023, our EBITDA expectation stands at £120m, whilst consensus is slightly lower at £114m.”
