Hedge fund firm Polar assets continue rebound

Date: Friday, December 11, 2009
Author: Laurence Fletcher, Reuters

* Assets up to $2 bln at end-Nov from $1.9 bln at end-Sept

* March assets hit low of $1.5 bln

* Pretax loss of 400,000 pounds before share-based payments

* Interim dividend maintained at 1 pence

Hedge fund firm Polar Capital (POLR.L) said rising markets and new client inflows have helped lift its assets under management from their March low, mirroring the industry's gradual recovery since the summer.

The firm, which last month appointed co-founder Tim Woolley as chief executive after Mark Kary resigned, said assets, on which fund firms earn fees, rose to $2.0 billion at the end of November from $1.9 billion at the end of September and $1.5 billion in March.

The rise in assets marks a rebound for Polar, whose assets more than halved over the year to March due to falling markets and client outflows, hitting its profits.

"We've seen since July a steady level of inflows, it's been pretty broad-based, on the long-only and the hedge fund (sides)," Woolley said in an interview.

He said the firm's Forager hedge fund, global macro managed accounts and UK Ucits III fund had attracted money, as had the long-only Japan and technology portfolios.

Hedge funds tend to earn higher fees and margins than long-only funds.

The wider hedge fund industry is recovering from a record poor performance in 2008 and investor withdrawals of $330 billion in the year to June and clients are now committing small amounts of cash to funds again, according to Hedge Fund Research.

Polar made a pretax loss before share-based payments of 400,000 pounds, compared with a 1.5 million pound ($2.44 million) profit a year before.

Woolley added that the firm had not cut fees on its funds, despite investor pressure, and said it is looking to recruit one or two teams of fund managers over the next 12 months.