Canaccord ups target on Polar Capital before foray into Asian markets

Analysts at Canaccord Genuity said the impact of a 34% increase in Polar Capital's assets under management had carried through to the firm's 2018 financial results.

AUM growth was very "broad based" across Polar's funds, with eight of its 11 strategies attracting net inflows and nine out of the 11 strategies seeing AUM growth, further boosted by record net performance fees.

Polar's UK Value Opportunities Fund, launched in January 2017, saw £464m of net inflows and another seven funds each saw between £118m and £372m of net inflows.

Core operating profit grew 32% to £27.7m and adjusted earnings per share shot up 80% to 36.6p, while the dividend was raised to 28p after being held at 25p for the last four years.

Canaccord felt the closure of four underperforming funds was a strong step in the right direction, but the broker was seemingly more impressed by Polar's hiring of a new emerging markets team ahead of the group's push into Asia.

"The potential appeal of these strategies from institutional and non-UK based clients is important as Polar seeks to broaden its client base away from UK retail clients," said Canaccord.

All in all, Canaccord upped its target price on Polar from 590p to 725p but lowered its stance on the firm's shares from its previous 'buy' rating to 'hold'.