Credit rally boosts BlueBay fees
BlueBay Asset Management, the specialist bond investor hit hard during the credit crunch, is already close to surpassing the total it earned in performance fees during its last financial year - after benefiting heavily from the improving credit markets.
The London-listed company's assets grew by 28% from $24.3bn to $31.1bn (€20.9bn) in the three months to September 30, according to an interim statement on what was the first quarter of its financial year, released this morning. Its assets are up 72% over six months and 55% more than a year earlier.
Daniel Garrod, financials analyst at Citibank, said almost all the £14.4m in performance fees that BlueBay earned in the last quarter, which it will crystalise by the end of this year, came from its multi-strategy hedge fund.
He said the $1bn fund hit new highs each month in the last quarter, earning the firm almost as much in performance fees as it did in the whole of its last financial year – when BlueBay earned £18.5m in performance fees.
Clients invested $3.8bn of new money with the group in the last quarter - outdoing a $1.2bn prediction by Citibank analysts. Fund performance and exchange rate movements comprised most of the remaining $6.8bn rise.
The rise in BlueBay's assets so far this year was helped by its long-only funds rising by between 17% and 53%, the group said, while its flagship multi-strategy hedge fund is up 40%.
This year is an about-face on BlueBay's 2008 financial year, during which time it had to cut management fees on one of its hedge funds to convince investors to stay put for a further 12 months. This commitment expired in July. While locked into the fund, they lost 21% of their money.
Hugh Willis, who with Mark Poole founded BlueBay, and is its chief executive, said: "We expect...returns to moderate to more normalised levels and investor demand to spread to higher beta credit products.
"Throughout the calendar year to September 30, net fund inflows have been concentrated largely in investment grade credit products. In contrast to the previous several quarters, long/short funds have been a meaningful contributor to accrued performance fees.”
BlueBay's shares have risen by 400% this year after falling by 80% last year. This morning they rose 3p to 349.3p at 10:00 GMT.
--write to dwalker@efinancialnews.com
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