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Henderson buoyed by £5bn inflow in first half

Henderson buoyed by £5bn inflow in first half

Henderson Group was buoyed by a £5 billion inflow over the first half of the year, powering assets under management over the £74 billion mark. 

The fund manager enjoyed a 10% rise in assets under management year-on-year, while underlying pre-tax profit from operations came in £2.2 million higher at £90.7 million compared to the previous year. The group said this was driven by a 21% increase in management fees, strong inflows over the year, coupled with stable fee margins.

Henderson issued a dividend of 2.6 pence per share, up from 2.15 pence per share the previous year. 

The fund manager saw particular strength in its retail business over the year, strengthened by a string of acquisitions over the past five years, with retail net inflows of £4.7 billion, up from £0.6 billion over the corresponding period in 2013.It noted flows across its European Equities, Global Equities, Global Fixed Income, Multi-Asset and Alternatives strategies. 

Meanwhile, in the US Henderson said its acquisition of Geneva Capital Management will increase its assets out in the region to around 15% of total assets under management.  

Net underlying income from was £261.9 million at the end of June, up 11%. Management fees increased to £193.7 million, while fee margins rose to 58.1bps from 56.3bps in 2013.  

Performance fees stood at £45.2 million, down from £54.1 million in 2013.

Chief executive Andrew Formica (pictured) commented: ‘Our strong performance in 2013 continued into the first half of 2014. Investment performance remains good across all of our client assets; we have delivered record net inflows in the period of £5 billion and we are gaining market share in our major markets.’

At 8:44 shares were down 2% on the day, trading at 236.5 pence.

Analysts at Bank of America Merrill Lynch noted that net inflows in the second quarter of £2 billion had come in ahead of its estimates of £1.25 billion. While proft before tax was 5% ahead of its estimates when adjusted for discontinued operations, Bank of America's analysts said it was not clear why revenues weren't higher during the period.

'Given that AUM was ahead, as were flows, and the revenue yield edged up, the reasons for this aren't obvious to us.'

The analyst also highlighted Henderson's more positive tone in comparison to peers, which recently have struck a more downbeat tone during reporting season.

'We think that Henderson has had a half of strong delivery. If anything, our estimates might edge up, but we suspect consensus may be a bit disappointed. More important than one half's numbers, we think, is the continued evidence that the company is delivering strong, diversified asset growth, We are neutral on Henderson because we think valuation is reasonable but not cheap, and because of worries about European regulation, especially commission unbundling. It is, though, in our view a company with strong business momentum.'

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Profile: The opportunity set that attracted Brett Williams to wealth management

Profile: The opportunity set that attracted Brett Williams to wealth management

Brett Williams is best known for helping to build some of the biggest platforms in the IFA market.He made the move over to wealth management to head SEI’s UK business earlier this year in the belief that this is where the best opportunities now lie.

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