AUM rise at Henderson despite outflow of funds

Fund manager Henderson Group saw assets under management improve in the third quarter despite a net outflow of funds.

Excluding its Phoenix division, assets under management (AUM) rose to £58.0bn at the end of September from £56.9bn at the end of June, despite a new outflow of funds of £881m.

On the Retail side, AUM rose to £29.1bn from £28.0bn at the end of the previous quarter, with investment performance of +£1.38bn more than compensating for £296m (net) of funds being withdrawn during the quarter. The outflows were most pronounced in the UK OEIC (open ended investment companies) range.

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"We continue to experience outflows as clients and advisers reposition their portfolios in advance of the implementation of the Retail Distribution Review as well as having some core funds, notably in our multi manager range, under-performing," Henderson revealed.

On the plus side, the group saw a turnaround in its European SICAV (Socit d'Investissement Capital Variable - a type of open-ended investment fund) range, which showed positive net flows in the period. The group also saw a more positive trend in its US Mutual Fund (unit trust) range as the quarter wore on.

On the institutional aside (again, excluding Phoenix), AUM edged up to £28.92bn from £28.90bn at the end of June. Net flows were negative at £585m.

"The modest current year and one year returns on our absolute return fund range, combined with industry aversion to Europe and equity long short strategies, has led to an increase in both notified and actual redemptions," Henderson admitted.

"Performance improved over the period and, if maintained through the remainder of the year, then we should see an improvement in flows as we move into 2013," the group said.

Phoenix saw AUM improve to £6.83bn from £6.72bn at the end of June, with net outflows during the quarter of £248m.

The group's balance sheet at the end of September showed total net assets of £730m, down from £736.7m at the end of June, including unrestricted cash and cash equivalents of £119.4m, up from £87.8m three months earlier. The net debt position more than halved over the quarter to £30.6m from £62.2m at the end of June.

The Chief Executive of Henderson, Andrew Formica, attempted to put a veneer on the figures. "Although investors remained cautious in their appetite for risk products, confidence improved during the period particularly about Europe and therefore outflows from our retail funds slowed compared to the second quarter."

"Our strict cost discipline allows us to continue to invest in the business and enhance the service we provide to our clients. This means that we are well positioned to benefit from any improvements in investor sentiment," Formica added.

JH