Join Henderson's Oz adventure

Earlier this month Henderson told investors it was headed for the land down under, where it has picked up £5.5bn of fixed-income and equity assets from Australian financial adviser and manager IOOF. It has also increased its ownership from 41 per cent to 100 per cent of smaller manager 90 West, which has £200m of assets under management (AUM). These acquisitions take Henderson's pan-Asian AUM to just shy of £10bn, 11 per cent of the group total, and demonstrate its growing diversification.

While the deals are expected to give earnings a modest boost this year, their real significance should be felt in the longer term by improving distribution in the region and adding a domestic investment management arm. And a closer relationship with IOOF, one of Australia's largest wealth management and advice platforms, should prove valuable. Henderson's cash pile should put it in a strong position to do more deals and will be improved by a further £110m following the sale of its 40 per cent stake in TIAA Henderson Real Estate to its US pension fund investment partner.

But Henderson is not just a jam tomorrow story based on geographical expansion. Its business is already exposed to one of the hottest parts of the global equities market. Henderson's funds are currently focused on developed markets, and, within that, Europe. A mixture of QE and improving economic sentiment has lifted European stocks, and with them Henderson’s fortunes. In the three months to 31 March, the manager increased its AUM by 10 per cent to £89.4bn, partly due to record inflows of £3.6bn, with the vast majority heading into its retail funds as everyday investors bought into the Europe story.

The eurozone QE project is slated to run to at least September 2016, if not longer. Furthermore, the first quarter saw decent, if unspectacular, growth figures across key eurozone economies. Collective GDP growth of 0.4 per cent across the bloc was the fastest rate of quarterly growth in nearly two years. And continued support for markets and improved economic sentiment has sent the FTSE Eurofirst 300 up 11.3 per cent so far this year, compared with a 1.0 per cent rise for the S&P 500 Index.

Critically, the performance of Henderson's investment funds looks good and strengthened in the first quarter. Three-quarters of its funds outperformed over a one-year period, compared to two-thirds in the previous quarter. Over a three-year period, 86 per cent of them outperformed, up from 83 per cent.

While Henderson is benefiting from the positive conditions in Europe, the negative circumstances that caused the current extreme eurozone economic policy also represent a risk. The key danger here comes in one word: Greece. It is difficult to see a solution to the country's debt problem that is anything more than a fudge and it is also near-impossible to predict the impact this will have on the wider European market. However, certain scenarios could cause a painful AUM hit for Henderson. The manager could also be hurt by legislation from the European Commission changing the way that managers pay for research, though the market is still awaiting final confirmation and details of these proposals.