AUM grew £0.43bn or 2.2% over Q3 of FY24 (01 Oct 23 - 31 Dec 23) to £19.56bn and is now slightly above our previous £19.40bn forecast for the 31 Mar 24 FY-end. Investment performance was exceptionally strong in the quarter, contributing +£1.51bn or +7.9% of opening AUM. This was despite a currency headwind which would have depressed GBP AUM levels of USD holdings (GBP/USD +4% over Q3 from 1.22 to 1.27).
Performance fee profits (net of staff allocations) jumped from the previous marked-to-market £1.3m, to £9.6m. As most PF’s crystallise at the end of December, this increase is now secured and not merely a mark-to-market estimate. FY24 forecasts have been upgraded accordingly.
Our fundamental valuation rises to 600p per share (32% above the current share price) as a result of the increased FY24 forecasts, and a fall in 10Y-gilt-yields (the risk-free rate used in our DCF valuation). This gap between fundamental value and share price is supported by our view that both Polar’s PER (12.3) and that of the sector (13.1) have the potential for a re-rating.
