Polar Capital stock rises despite AUM contraction

Investing.com -- Shares of Polar Capital Holdings plc (LON:POLR) edged up by 1.5% despite the asset management firm reporting a contraction in assets under management (AUM) for the first quarter.

The company’s AUM decreased by 10% quarter-over-quarter to £21.4 billion, falling short of the Visible Alpha consensus estimate by 7% but aligning with RBC Capital Markets expectations.

The market’s reaction to Polar Capital’s quarterly update appears to focus on the improved net flows, which showed a less negative impact than anticipated. While net flows were down £89 million, this was in line with Visible Alpha consensus estimates of a £62 million reduction and significantly better than the RBC Capital Markets estimate of a £211 million decrease.

The company experienced net inflows across all investment offerings totaling £123 million in the fiscal year 2025, with particularly strong performance from open-ended funds in sectors such as Global Absolute Return, International Small Company, Emerging Markets Stars, Healthcare Blue Chip, Biotech, and AI, which collectively attracted £495 million in inflows.

Despite the overall positive net flows, the technology-focused open-ended fund saw notable outflows of £200 million during the fourth quarter of 2025. The company acknowledged the challenging conditions in the equity markets, which have been particularly volatile and have impacted AUM levels and profitability.

However, Polar Capital remains optimistic about its future performance, emphasizing the strength and diversity of its specialist active fund strategies.

Polar Capital’s outlook statement suggested a cautious but confident stance, noting that while equity market volatility may affect AUM levels and profitability in the short term, the firm is well-positioned to deliver for clients and shareholders over the long term.

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