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Henderson’s retail arm suffers €5.4bn outflow

Henderson Group has posted negative retail flows for 2016 as Brexit-related volatility continued to impact performance.


Kristen McGachey

An “unprecedented rise in anti-establishment populism,” embodied in the outcomes of the Brexit vote and US presidential election, proved taxing for the asset manager’s retail division, as clients’ demand for European assets tapered throughout the year.

The acceleration of outflows was most acute from its Global and European equities strategies and from its Luxembourg-domiciled SICAV range, which saw £2.6bn (€3.1bn) in redemptions alone.

These outflows were somewhat mitigated by sustained demand for its absolute return and fixed income strategies, Henderson reported, though both asset classes still ended the year with negative net flows.

Total net outflows for the year stood at £4bn, as Henderson’s insitutional division saw net inflows of £600m. The £4bn outflow figure compares to £8.5bn of net inflows in 2015.   

Performance fees also dropped by 59% to £40.4m during the period, pushing down profits by 3.3% to £212.7m.

Despite this, assets under management rose by 10% year-on-year to £101bn. However, between the third and fourth quarters, AUM growth was less than 1%.  

Chief executive Andrew Formica hailed the group’s “resilient” performance during a “year of extraordinary turbulence in politics and financial markets” and announced the group was on track to complete its merger with Janus Capital Group by the end of May.

“It is testament to our strategic progress over the past three years that we report assets under management and management fees at record levels – progress that has enabled us to continue to move forward through the proposed merger with Janus Capital Group,” he said.

“In Janus Henderson we are building an investment manager centred on delivering for our clients, that creates opportunities for our colleagues and retains the freedom to innovate, change and grow. I very much look forward to working even more closely with Dick Weil and our new colleagues from Janus.”

Henderson was among the top five worst performers of the FTSE 250 index on Thursday, its shares tumbling 2.8% to 210.8p in response to the results.