Polar Capital Holdings PLC (AIM:POLR) remained a 'buy' for Deutsche Bank after January net inflows and market performance lifted assets under management above £30 billion for the first time.
In a note to clients, it also raised its price target to 780p from 750p. The broker estimated net flows of £0.3 billion in January, driven almost entirely by technology and artificial intelligence strategies.
Deutsche calculated that assets under management increased by 7% during the month.
The broker said this reflected a combination of positive net inflows and strong investment performance, more than offsetting currency headwinds.
Performance was estimated to have contributed £1.6 billion to assets under management during January.
Based on public disclosures and Bloomberg data, Deutsche estimated trackable assets under management at £29.7 billion as of 29 January.
This figure incorporates the estimated £0.3 billion of net monthly inflows and the £1.6 billion of performance gains.
The broker estimated non-trackable assets under management of £0.7 billion, primarily segregated mandates.
This estimate was based on marking to market the last reported figures and incorporating Deutsche Bank’s own net flow assumptions.
Taken together, Deutsche Bank concluded that total group assets under management exceeded £30 billion for the first time in the company’s history.
The broker highlighted Polar Capital’s favourable exposure to technology and emerging markets as a key factor behind January’s asset growth.
Deutsche said technology-oriented strategies, including artificial intelligence funds, continued to be the dominant driver of net inflows.
The valuation case remained central to the investment thesis.
Deutsche reiterated its view that the shares were trading on around eight times forecast price to earnings and around eight times forecast price to free regulatory earnings for the 2027 financial year.
Price to earnings compares the share price with expected profits, while price to free regulatory earnings compares the share price with surplus capital generation after regulatory requirements.
The broker also highlighted a forecast dividend yield of around 8%, which it described as well underpinned. It did not indicate any change to its earnings forecasts in the note.
The target price increase reflected higher assets under management assumptions rather than a change in valuation multiples.
The broker concluded that continued momentum in technology fund flows, combined with a supportive market backdrop, justified maintaining a positive stance on the shares.
In early afternoon trading, the shares were up 4% at 616.46p.