Final yr was a horrible yr for the energetic fund-management trade. Buyers have persistently been pulling cash from energetic funding funds over the previous decade, however outflows accelerated in 2025. In accordance with information compiled by Bloomberg Intelligence, greater than $1trillion flowed out of US energetic mutual funds final yr, up from round $600billion in 2024. Buyers moved into passive exchange-traded funds (ETFs), including greater than $600billion final yr. The development is way the identical within the UK, albeit with smaller numbers.
This would possibly seem to recommend the tip is nigh for the UK’s listed fund-management sector, however that’s not fully the case. Figures out there point out that solely two of the listed managers are on observe to report a decline in belongings beneath administration (AUM), in response to evaluation from Peel Hunt. These managers are Liontrust and Impax Asset Administration, which misplaced two key mandates from St James’s Place. That can drag group AUM down by as a lot as 23.3% for the yr.
MoneyWeek
Subscribe to MoneyWeek in the present day and get your first six journal points completely FREE
Get 6 points free
Signal as much as Cash Morning
Do not miss the most recent funding and private funds information, market evaluation, plus money-saving ideas with our free twice-daily e-newsletter
Do not miss the most recent funding and private funds information, market evaluation, plus money-saving ideas with our free twice-daily e-newsletter
Technology-3″>Polar Capital’s deep roots in Technology
IT’s onerous to argue that Technology and healthcare gained’t proceed to draw traders’ curiosity over the subsequent decade. These sectors would possibly encounter some turbulence alongside the best way, however tech and healthcare will stay two of probably the most thrilling and promising thematic traits. Below the brand new CEO’s stewardship, Polar plans to double down on the markets which have helped IT change into one of many UK’s high boutique fund managers.
The group’s roots are in Technology. IT was created by Brian Ashford-Russell and Tim Woolley, who left their positions on the Henderson Technology Belief, managed by Henderson Buyers, to arrange the brand new boutique in 2001. Backed by Caledonia Investments, the self-managed funding belief Polar grew shortly regardless of the dotcom bubble, reaching $2billion in AUM by 2005. Henderson Technology Belief, launched in 1996, grew to become the Polar Capital Technology Belief, a core of the group’s fund vary. Since launch, the tech belief has returned 14.7% every year (to 30 April 2025) by accurately timing key turning factors within the tech world, such because the rise of Huge Knowledge in 2010 and AI as early as 2017.
The agency’s flagship open-ended tech fund, the International Technology Fund, was launched at Polar’s inception. Right this moment, IT’s far larger than the belief, though they’re each managed by the identical staff. The important thing distinction is focus. The belief has 91 positions, in contrast with 65 for the open-ended car. However the belief is extra concentrated, with 53% of the portfolio within the top-ten holdings, in contrast with 47% for the open-ended fund.
Iain Evans is a promising new boss
In September, Iain Evans was appointed CEO after 21 years with the company. Evans is planning on doubling down on what’s worked for Polar – specialism in a few key sectors with select acquisitions. This desire to focus on what works is refreshing in a sector that often appears to be struggling for direction. Many managers have panicked at the rise of passive funds, often wasting money on bolt-on acquisitions in the hopes of achieving growth or expanding into new markets.
Polar is doing the opposite. While that may leave the company at the mercy of the performance of Technology, IT stands out in a struggling sector. Nonetheless, the market will not be taking its edge into consideration. As a substitute, traders are lumping Polar in with struggling managers comparable to Liontrust and Impax as its valuation sits close to the underside of the vary for its fund-management friends.
On the time of writing, shares in Polar Capital are buying and selling at a ahead price-to-earnings ratio (p/e) of ten, in response to Panmure Liberum, and 9 in response to Peel Hunt. That’s a deep low cost to the fund-manager sector common of 16 (together with wealth managers). Fund-managers’ earnings are cyclical in contrast with the extra steady earnings from wealth administration, so the shares deserve a reduction to the sector common, however a niche of greater than 43% appears extreme. Panmure Liberum believes 20% could be extra acceptable.
There’s additionally the corporate’s dividend. Polar earns its cash in each common fund-management and efficiency charges. On its asset base of £23.2billion, Polar Capital booked administration charges of £86.8million within the first six months of fiscal 2025. For the yr ended March 2025, IT booked a administration payment yield of 78 foundation factors (0.78%), producing internet administration charges of £178.3million. IT additionally earned efficiency charges of £16million for the yr, up a number of million in contrast with 2024. These may hit £28 million in 2026, Panmure estimates. Though common administration charges already cowl Polar’s dividend, the extra efficiency charges imply the corporate’s 8.7% yield is greater than lined by earnings per share, and will stay so for the foreseeable future.
All in all, Polar provides an affordable, leveraged option to play the worldwide demand for tech shares, with a market-beating dividend yield on supply as effectively.
(Picture credit score: AIM)
This text was first revealed in MoneyWeek’s journal. Get pleasure from unique early entry to information, opinion and evaluation from our staff of monetary consultants with a MoneyWeek subscription.
👇Comply with extra 👇
👉 bdphone.com
👉 ultractivation.com
👉 trainingreferral.com
👉 shaplafood.com
👉 bangladeshi.help
👉 www.forexdhaka.com
👉 uncommunication.com
👉 ultra-sim.com
👉 forexdhaka.com
👉 ultrafxfund.com
👉 bdphoneonline.com
👉 dailyadvice.us