News Column

Higher demand for Euro stocks helps Henderson lure £3bn more

April 25, 2014

MICHAEL BOW



IMPROVING stock market conditions in Europe helped fund manager Henderson Group attract an extra 3bn last quarter, as retail investors rushed to buy funds focused on continential Europe.


FTSE 250 listed Henderson, led by 42-year-old Australian chief executive Andrew Formica, said assets under management rose to 79.2bn at the end of March from 75.2bn three months earlier.


Retail investors added 2.88bn while institutional clients contributed 113m. Markets and foreign exchange added 977m.


Henderson's two flagship European-focused equity funds - which own shares in firms like French energy firm Total and German postal service Deutsche Post - saw the biggest flow of new money.


Such funds are benefiting from stronger equity markets in France and Germany, where stock markets have risen 20.7 per cent and 23 per cent respectively over the past 12 months. Britain's blue chip index has risen 8.3 per cent in comparison.


A higher proportion of cash was also allocated by people living in Latin America, Henderson said, as it tries to diversify overseas.


Henderson was founded in 1934 to manage the estate of Lord Faringdon, who helped finance the Manchester to London railway.


ANALYST VIEWS WHAT DO THE RESULTS MEAN FOR HENDERSON? By Michael Bow PHILIP MIDDLETON BANK OF AMERICA MERRILL LYNCH Geographical diversity is positive for earnings quality, in our view. As the asset management industry consolidates, this is likely to become increasingly important. Henderson now looks well positioned, with a range of sellable product and well diversified distribution.


DAVID MCCANN NUMIS We regard Henderson as an asset manager with a lower than average quality of income. Around a third of profits from performance and transactional fees. We therefore feel that a small discount to the sector rating would be warranted.


EDWARD MORRIS JP MORGAN CAZENOVE The benefit of modestly higher assets under management, particularly within retail, causes us to increase estimates for the current year and beyond. Our price target is increased to 250p from 245p as a result of our revised estimates


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Source: City A.M. (UK)