Markets News

UPDATE 1-Money manager Ashmore posts lower AUM, cost controls boost profit

(Adds details from statement, CEO quote)

Sept 11 (Reuters) - Emerging markets-focused money manager Ashmore reported a drop in assets under management (AUM) on Friday, hit by a coronavirus-driven selloff in markets earlier this year, although full-year earnings still rose on cost controls.

The company said its AUM fell 9% to $83.6 billion, with market losses of $8.1 billion in the third quarter, when the CBOE Volatility Index - considered Wall Street’s fear gauge - hit levels last seen during the 2008 financial crisis.

UK-listed Ashmore recounted how global capital markets saw “rapid and severe declines” that resulted in mark-to-market losses across a broad range of asset classes during the quarter.

However, the company said adjusted earnings before interest, taxation, depreciation and amortisation, or core profit, climbed to 222.5 million pounds ($285.3 million) for the 12 months ended June 30 from 201.8 million pounds a year earlier.

That helped the money manager nudge its total dividends for the year to 16.90 pence from 16.65 pence.

Ashmore, which offers a range of different equity, debt and regional investment strategies, said markets have started to recover from March lows, even as the economic fallout from the global health crisis is expected to continue for some time.

“... after the initial negative impact (from COVID-19 pandemic) in Q3, the investment processes are delivering outperformance as markets recover and client flows have continued to stabilise,” Chief Executive Mark Coombs said.

$1 = 0.7800 pounds Reporting by Muvija M in Bengaluru; Editing by Anil D’Silva and Uttaresh.V