Inflows steady Polar assets in choppy markets

Date: Wednesday, June 23, 2010
Author: Reuters

Hedge fund firm Polar Capital (POLR.L) said client inflows helped steady its assets in recent choppy markets, adding volatility could continue as it reported full-year profit at the top end of expectations.

Polar's assets under management were steady at around $2.5 billion between March and May, chief executive Tim Woolley told Reuters on Wednesday, as market losses of $150 million were balanced by inflows.

The FTSE 100 .FTSE fall 8.6 percent in the period as investors fretted over Europe's sovereign debt crisis.

Polar ran nearly $4 billion in late 2007 but saw assets drop below $1.5 billion as the credit crisis hit hedge fund firms.

Woolley said inflows had fallen temporarily after May's market losses in which Polar's macro fund lost more than 5 percent, but had since picked up. He expected flat markets over the next 12 months, but said volatility remained an issue.

"There remain substantial economic and political issues for the markets to deal with and further weakness in markets cannot be ruled out," Polar said. "We would expect the external environment to remain challenging during much of fiscal 2011."

Polar said pretax profit for the year to March fell three quarters to 3.1 million pounds ($4.6 million), versus a forecast for around 2.8 million.

Woolley told Reuters the firm was looking at acquisitions and also wanted to recruit one or two fund manager teams a year.

It plans roughly to double the number of strategies it runs to 10-12 after much of the money returning to funds since the crisis went to funds in sectors such as Asia excluding Japan, where the firm does not run money.