Strong H1, AUM growth continues post-results

We knew momentum was strong on an absolute basis in H1 22 with AUM reaching £23.4bn on 30 Sep 21, 12% up over H1 (31 Mar 21: £20.9bn) and 43% up y-o-y (30 Sep 20: £16.4bn). Now, with most asset managers and platforms having reported AUM for the July-Sept quarter, growth looks impressive compared to peers too. Polar had the 4^th highest organic AUM growth (out of 15) in the 6 months to 30 Sep, and the 3^rd highest over 12 months. Growth has continued in H2 with AUM reaching £25.0bn on 12 Nov.

We increase our fundamental value from 1305p to 1400p, 70% above the current share price. We had previously forecast AUM of £23.4bn on 31 Mar 22, but it is already £25.0bn. If we assume no growth from market movements or investment performance for the remainder of the FY, with net inflows continuing at the average of H1 (just over £100m per month), our revised estimate is £25.5bn.

We also note the continuing discount in valuation compared to peers. Polar’s PE ratio of 12.2 is less than half of the peer group median of 30.0, which seems strange given its growth and profitability profile. We maintain that there are sound reasons for a significant change in rating.