This boosted net management fee income by 31 per cent to £249m, while performance fee income edged up 3 per cent to £85.4m. Put another way, analysts at Numis Securities reckon that Ashmore would have to lose all of its performance fees and around 85 per cent of management fee income before making a loss.
Ashmore has also been less affected by the current malaise in equity markets because a bulk of its investments are in emerging market debt. This reflects a growing preference by institutional clients for exposure away from the major markets, with emerging markets regarded as less prone to large budget deficits and currency depreciation.
However, Ashmore has increased its equity exposure by acquiring a 62.9 per cent stake in Emerging Markets Management, a specialist in emerging market equities, for a maximum of $246m. The newly named AshmoreEMM will handle all centrally managed equity products.
Numis is forecasting current-year EPS of 27.2p, up from 26.6p in 2011.
|ORD PRICE:||381p||MARKET VALUE:||£2.7bn|
|TOUCH:||380-381p||12-MONTH HIGH:||430p||LOW: 299p|
|DIVIDEND YIELD:||3.8%||PE RATIO:||14|
|NET ASSET VALUE:||70p*||NET CASH:||£369m|
Ashmore has tapped into a lucrative revenue stream, driven by demand for emerging market investments. However, on 14 times forecast earnings, the shares are fairly priced.
Last IC view: Fairly priced, 333p, 24 Feb 2011