company's profits surge upon executive's departure from Polar Capital
In the final quarter of the financial year ending March 31, 2025, Polar Capital experienced a significant decline in assets under management (AUM) and profits. The AUM fell by over 2%, with the steepest drop occurring in Q4 as investment performance decreased by £495 million.
The decline in AUM can be attributed to negative market movements in the final quarter of the financial year. Despite net inflows of £123 million, fund closures resulted in a £111 million reduction in AUM, contributing to the overall decline.
Regarding profits, while Polar Capital reported a 14% year-on-year increase in gross income and a 27% jump in core operating profit for fiscal year 2025, statutory profits were nonetheless affected by a non-cash impairment charge of £13.6 million related to an acquisition from 2021. This impairment led to a 6% decrease in profit before tax (PBT) to £51.6 million for the year. Pre-tax profit for the same period dipped 6% to £51.6m, due to the impairment charge.
Gavin Rochussen, Polar's chief executive, expressed confidence that Polar Capital has the attributes to continue to prosper and grow, due to its diverse range of differentiated investment strategies and solid leadership foundation. However, he acknowledged that the momentum for active managers shifted sharply at the start of 2025, leading to outflows for active funds due to increased risk-aversion among global investors.
The firm's results were overshadowed by the adverse market conditions that affected the firm's bottom line for the beginning of 2025. A swift pivot to risk-off sentiment in the first calendar quarter of 2025 led to inflows into money-market funds and gold as safe havens.
Polar Capital's Chair, David Lamb, stated that the financial year was marked by a resilient US economy, stubborn levels of inflation, US-led trade tariffs, and heightened market uncertainty. He added that the firm navigated these challenges with resilience and adaptability, positioning itself for future growth.
In the wake of these results, city brokers have reduced their target price for Polar Capital's stock. Peel Hunt reduced it to 475p from 665p, while Panmure Liberum lowered it to 500p from 600p.
Looking ahead, Gavin Rochussen, Polar's chief executive, confirmed he would hand over leadership to Polar's global head of distribution at the asset manager's annual general meeting in September. The new leadership is expected to steer the company through the ongoing market volatility and continue to build on the firm's strong foundation.
[1] Source: Polar Capital's Q4 2025 results announcement [2] Source: Polar Capital's fiscal year 2025 results announcement
- The decline in Polar Capital's assets under management (AUM) in Q4 of 2025 can be traced back to negative movements in the markets during that period.
- Investors' increased risk-aversion at the start of 2025 led to outflows from active funds like Polar Capital, with negative market movements further exacerbating the decline in AUM.
- The adverse market conditions at the beginning of 2025 had a significant impact on Polar Capital, causing city brokers such as Peel Hunt and Panmure Liberum to reduce their target price for Polar Capital's stocks.
- As Polar Capital moves forward, the incoming leadership is anticipated to navigate ongoing market volatility and continue to build upon the firm's solid foundation in personal-finance and business, with a focus on diverse investment strategies in the economy and finance sectors.
