Polar Capital blames Abenomics for disappointing financial year

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Polar Capital’s financial year has finished on a “disappointing note”, with AUM down 10 per cent compared to last year due to outflows from its Japan fund in the aftermath of Abenomics.

The asset manager had $10.4bn (£7.3bn) AUM at the end of March compared to $12.3bn a year earlier.

The group also confirmed it had a “pipeline of further recruitment activity” following the appointment of George Godber and Georgina Hamilton to the UK Value team, whose appointment Fund Strategy revealed last week.

Non Japan funds saw inflows of $240m.

“Prior to the introduction of Abenomics in October 2012 our Japan UCITS had outperformed its benchmark by 57% since its launch in 2001,” Polar Capital said in the statement. “However, since Abenomics the process that the team deploys has not been able to deliver comparable returns and indeed has underperformed the market by a considerable margin over this period.”

Polar Capital said it would stick to its existing process and sit out the “current extreme volatility” in Japan. It said once Japan stabilized the group could start growing its AUM and profits, but added in the near term global instability in the stock market would also impact the business.

The group said it was looking to raise its existing targeted number of team from 10 to 12 to a new range of 12 to 15. It said it was looking to attract additional teams with assets or whose track record meant that assets were likely to follow quickly.

People commenting on the appointment of Godber and Hamilton, who currently manage Miton’s UK Value Opportunity fund, said investors may follow the duo to Polar.

Despite its disappointing results Polar Capital told shareholders it expected to maintain the dividend at last year’s level.