Polar Capital Holdings (POLR) 

FY24 saw a 14% rise in AUM to £21.9bn on 31 Mar 24. This was the second highest AUM increase among a London-listed peer group (page 4). Post year-end, Polar has recorded a further 4% increase in AUM to £22.8bn on 14 Jun 24 (Q1-25 ends on 30 Jun 24). 

Investment performance was the AUM booster in FY24, adding +£4.3bn or +23%, making Polar a runaway leader compared to other asset managers when it comes to investment returns. While its net flows were negative for the full year at -£1.6bn, this was around the median outflow rate of the peer group. And encouragingly, a return to positive, albeit modest, net flows was recorded in Q4 of FY24 (+£56m), with further positive net flows of +£197m in Q1-25 to date.

 Gross income increased 7% y-o-y from £185.5m in FY23 to £197.6m in FY24. The primary driver for the increase was a jump in performance fee income from £6.7m to £18.7m. 

PBT increased 21% from £45.2m in FY23 to £54.7m, while PAT increased 15% from £35.6m to £40.8m (PAT was impacted by the higher UK corporation tax rate of 25% in FY24 v 19% in FY23). 

Polar maintains its exceptionally strong balance sheet, with net assets down slightly from £142.9m to £135.9m, and cash and equivalents down from £107.0m to £98.9m, this after paying out £44.3m in dividends and spending £8.2m buying back its own shares. Polar has no debt. An unchanged dividend of 46.0p for FY24 has been recommended, a yield of 8.5%

Positive outlook, fundamental value unchanged at 650p 

Polar started FY25 with an AUM level significantly higher than the average level of FY24, with further positive momentum in Q1-25. Absent any severe AUM pullbacks, this should translate to a solid increase in investment fees and core profitability in FY25 (see forecasts below and on page 21). 

We also think Polar’s track record will attract significant inflows over the longer term. It has been clear for some time that many investors’ decisions to keep reducing technology (and other equity) exposures after the valuation falls of 2022 have proved costly and resulted in them missing out on exceptional returns (page 7). Our fundamental value remains at 650p per share.

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