Ashmore Sees Money Returning, Assets Shrink $11.3 Billion

Ashmore Group Plc said client money is returning to emerging markets after the firm’s assets shrank by $11.3 billion in the last six months of 2014.

The money manager had $4.5 billion of net outflows and a $6.2 billion investment loss in the period, sending assets under management 15 percent lower to $63.7 billion, according to a statement on Tuesday. Management fee income dropped 11 percent to 133 million pounds ($205 million) from a year earlier.

“We are paid to take risk for clients and we are actively doing that right now,” Chief Financial Officer Tom Shippey said in an interview. “Real value is there. The conversations we are having with clients today are slightly different” to six months ago, Shippey said.

The returns offered in emerging market debt, where the majority of the firm’s assets are invested, is a “strong” selling point given the prospect of negative bond yields in developed markets, Shippey said.

Even so, Ashmore had $9.8 billion of redemptions as the firm lost some large investment mandates in debt and equities. Earlier this month, Aberdeen Asset Management Plc reported 4.8 billion pounds of net outflows amid waning investor sentiment toward developing markets.

Pretax profit increased 37 percent to 110.7 million pounds from a year earlier, boosted by a stronger dollar, higher fees and costs cutting, Ashmore said.

The company will continue to broaden its presence in emerging markets, which could potentially include buying local businesses, Shippey said. Last year, the London-based asset manager opened an office in Riyadh to help expand in the Middle East.

The shares climbed 0.6 percent to 310.9 pence at 12:01 p.m. in London trading, extending their gain for this year to 11 percent.

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