Ashmore Drops the Most Since 2009 as Clients Withdraw Funds

Jan 14, 2014 11:57 am ET

(Updates to add closing share price in second paragraph)

Jan. 14 (Bloomberg) -- Ashmore Group Plc tumbled by the most in since 2009 after clients withdrew $3.5 billion in funds from the emerging-markets money manager.

Assets under management fell 4.1 percent to $75.3 billion in the three months to Dec. 31, the London-based company said in a statement today, as net outflows overshadowed a $300 million investment gain. The stock sank 12 percent to 358 pence in London, the most since February 2009.

The market “continued to be influenced by uncertainty surrounding U.S. monetary policy” in the second quarter, Mark Coombs, Ashmore’s chief executive officer, said in the statement. “There is now greater clarity over monetary policy, and emerging market assets offer attractive prospective returns. This continues to give us confidence for the year ahead.”

Emerging-market equities have declined 7 percent since May amid concern that cuts in U.S. Federal Reserve stimulus will reduce investor demand for risker assets. In contrast, developed markets have rallied as the Fed’s decision to slow asset purchases boosted confidence in the U.S. recovery.

Ashmore said the majority of the net outflows came from a small number of redemptions from mandates in combined corporate and government debt and foreign exchange. External debt, equities and multi-strategy investments also had outflows. Alternatives funds returned capital as expected, while corporate debt saw a net inflow, the company said.

Shares of U.K. asset managers paced the selloff in London. Aberdeen Asset Management Plc, which invests about two-thirds of assets in global emerging markets and stocks from the Asia- Pacific region, lost 1.5 percent to 453.1 pence. Henderson Group Plc dropped 2.6 percent to 229.4 pence and Schroders Plc slid 1.7 percent to 2,547 pence.

--Editors: Steve Bailey, Jon Menon