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Fixed interest fund manager BlueBay Asset Management reckons its conservative approach leaves it well placed to weather the current storm in the world’s credit markets. Indeed, it has avoided any structured products exposed to refinancing risks, such as the now notorious structured investment vehicles (SIV), and it has no direct long side exposure to the sub-prime mortgage market.
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This conservative approach has helped it continue to attract investors during the turmoil of July and August. In fact, over the two months, assets under management rose 7 per cent from £13.1bn to $14bn. What’s more, BlueBay has generated performance fees on its funds during the period.
The recent trading builds on a strong year to end-June which saw assets under management rocket 89 per cent, with 82 per cent of the growth coming from new money flowing into its funds. The group also remains positive on the long-term prospects for its key markets - European corporate bonds and emerging market debt. Management believes that there's still a lot of growth to come through in both areas and that investors will continue to look to performance focused specialist managers, like BlueBay, to gain exposure.
Subject to revisions following these results, broker Altium expects 2008 EPS of 28.3p (2007: 19.7p).
| BlueBay Asset Management (BBAY) | ||||
|---|---|---|---|---|
| ORD PRICE: | 385p | MARKET VALUE: | £733m | |
| TOUCH: | 384-385p | 12-MONTH HIGH: | 576p | LOW: 300p |
| DIVIDEND YIELD: | 1.6% | PE RATIO: | 15 | |
| NET ASSET VALUE: | 46p | NET CASH: | £51.5m | |
| Year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2006 | 76.0 | 31.1 | 18.0 | nil |
| 2007 | 109 | 51.6 | 25.0 | 6.00 |
| % change | +43 | +66 | +39 | - |
Ex-div: 24 Oct Payment: 23 Nov |
||||
Credit market turbulence will inevitably cause problems, but BlueBay does look well positioned to weather the storm. So, on a fairly undemanding forward PE of 14, good value.
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-IC-1.5.4a-prod - 31/10/2008 13:11:34 - carlos.princz
