Ashmore assets under management broadly stable

(Sharecast News) - Ashmore Group reported broadly stable assets under management at $48.8bn for the six months ended 31 December on Friday, as improved net flows and reduced redemptions helped to offset market volatility. The FTSE 250 specialist emerging markets asset manager recorded a net outflow of $1.1bn - a significant improvement from prior periods, while positive investment performance added $0.6bn.

Revenue declined year-on-year due to lower average assets under management.

Adjusted net revenue fell 14% to £79.9m, with net management fees down 17% at £68.3m.

However, the group maintained performance fee generation at £7.9m, in line with the prior-year period.

Adjusted operating costs decreased 9%, and the firm maintained an adjusted EBITDA margin of 42% on £33.7m of adjusted EBITDA.

Diluted earnings per share stood at 5.4p, with adjusted earnings per share down 17% at 4.8p.

The board declared an interim dividend of 4.8p per share, unchanged from the prior year.

Ashmore said its active investment processes continued to generate outperformance, with around 60% of assets under management outperforming benchmarks over three and five years.

However, a strong market performance in the first quarter was largely reversed in the second.

Emerging market fixed income indices rose between 1% and 4% over the period, while equity indices delivered mixed returns of between -1% and +2%.

The firm said its strategy to diversify its business showed progress, with equities net inflows driving a 4% increase in equity assets to $7bn, representing 14% of total group assets.

It said its alternatives segment continued to attract capital, including the first close of a debt infrastructure fund raising over $300m.

Private equity realisations in Latin America and the Middle East also contributed to performance fees.

Ashmore said its local investment platforms saw notable growth, with assets in India up 16% and Colombia up 21%, bringing total locally managed assets to $7.6bn.

Emerging market-domiciled clients now accounted for 38% of group assets, up from 36% a year earlier.

Looking ahead, Ashmore said it remained positive on the macroeconomic outlook for emerging markets, citing robust fundamentals, structural resilience, and ongoing reforms supporting superior economic growth.

The firm noted potential upside to emerging market asset prices should U.S. policy implementation prove more measured than current campaign rhetoric suggested.

It also highlighted the need for significant rebalancing to address historically low investor allocations to emerging markets.

"Ashmore's net flows continue to improve and AuM was largely unchanged at the end of the period," said chief executive officer Mark Coombs.

"Ongoing strong control of operating costs helped to mitigate the impact of lower average AuM on the financial results, and the group continues to invest in strategic growth and diversification opportunities including through its seed capital investments.

"There are strong arguments for investors to rebalance allocations from heavily overweight US positions in favour of the attractive valuations and investment opportunities in emerging markets."

Coombs said those markets offered "significant" diversification and growth, which was being increasingly recognised by clients and reflected in activity levels.

"Ashmore's active investment management processes are delivering for clients and the group is well-positioned to navigate the asset price volatility resulting from the US election, and to capture the longer-term upside from current market levels."

Reporting by Josh White for Sharecast.com.