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Its ability to attract fund flows and monetise periods of good performance is underappreciated
Thursday 21 Jan 2021 Author: Martin Gamble

Polar Capital (POLR:AIM) 660.04p

Gain to date: 45%
Original entry point: Buy at 455p, 18 June 2020

Specialist fund manager Polar Capital (POLR:AIM) has made good operational and strategic progress since we outlined its attractions last June.

Assets under management (AuM) have recovered strongly since the March lows, growing 55% to nearly £19 billion. The biggest contributors were market and fund performance which added £5.2 billion.Net subscriptions added £1.46 billion, offset by a £301 million outflow from the closure of the UK Absolute Equity Fund. The recently acquired Phaeacian team saw net inflows of £431 million.

Polar Capital earned £19.3 million of performance fees in the nine months to 21 December 2020.

In late December, Polar announced it had agreed terms to purchase Dalton Capital, a UK boutique manager with £1.12 billion in AuM.

The deal has strong strategic rationale bringing complementary skills to its existing European income team as well as providing broader wholesale and institutional distribution into Europe, particularly Germany.

Shore Capital estimates the deal could add around £4 million of pre-tax profit to the March 2022 financial year.

SHARES SAYS: We continue to rate Polar Capital as high-quality business trading on an attractive valuation (10.7 times next 12 months’ forecast earnings) and providing a dividend yield around 5.5%. Keep buying. 

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