AUM jumped £3.5bn (15.3%) to £26.7bn over Q2 of FY26 (1 Jul 25 – 30 Sep 25). Investment performance contributed £3.6bn (Q1: +£2.7bn) with net flows marginally negative at -£58m (Q1: -£0.6bn). The net flow improvement is particularly impressive given that it was a quarter of heavy outflows for equity funds more generally (page 3). Mark to market performance fee profits, net of staff allocations, were £15.0m on 30 Sep 25 (most PFs crystallise in December).
The pace of AUM growth has seen end-H1 AUM far exceed our previous end-FY26 (31 Mar 26) forecast of £23.4bn. Performance fees are also currently substantially higher than previously modelled (£4.2m for FY26). We accordingly raise FY26 forecasts to: AUM: £27.0bn (previously £23.4bn); revenue £247.3m (£204.7m); core operating profit: £56.4m (£45.7m); and PBT £71.2m (£49.7m). FY27 forecasts and beyond also rise due to higher starting-AUM (see page 2).
Our fundamental valuation based on a DCF model rises to 650p from 550p. We will provide full and updated details of this with our note covering the interim results in November. On page 4, we also detail that Polar does not trade at a significant premium to peers, which seems strange to us.
