By Jonathan Goslin, analyst at Edison Investment Research
Although Ashmore Group recorded 22% growth in net AUM inflows during the year, net management fee revenues increased only 4% due to continued declines in management fees. However, continued investment outperformance across the majority of funds at the specialist Emerging Markets investment manager helped drive a 31% increase in performance fees and a 7% increase in EBITDA. The decline in management fees was driven by a number of new larger clients at lower margins and an increase in competition for these mandates.
While we favour Ashmore’s ability to grow AUM through net new money flows and strong investment performance, we remain wary of the continued decline in revenue margins and the drag this will have on future revenue growth.