Polar Capital Holdings PLC (AIM:POLR) has enjoyed a lift from buoyant markets, with assets under management rising 15% over the quarter to come in line with expectations.
Deutsche Bank’s David McCann says the result reflects “a strong period for markets and exposures in Polar’s largest funds”, while performance fees are running well ahead of forecast.
The investment manager reported £15m in accrued net performance fees for the period, compared with the £6m Deutsche Bank had expected and £8m a year earlier.
Those fees are due to crystallise in December 2025 if performance holds up. The bulk of the gains appear to come from the group’s biotech and healthcare strategies, with additional support from its convertible bond and artificial intelligence funds.
Despite the progress, the shares have lagged. Polar Capital has suffered what McCann calls a “significant de-rating” against peers, a trend the analyst argues looks out of step with the company’s improving fundamentals.
The bank has nudged its price target up from 600p to 625p and kept a buy recommendation.
At 567p, the stock still looks cheap on Deutsche’s numbers, especially given the recovery in market-sensitive strategies and early signs of better fund performance.
The tone from the bank is one of quiet confidence that Polar’s valuation will catch up with its results, particularly if markets stay supportive into year-end.