Ignis prepares hedge fund launches as restructure impacts profits

Ignis Asset Management saw profits fall by 6% and AUM come down nearly £5bn in 2012, as the renegotiation of its joint venture deals impacted the business in a “year of significant change”.

The group, the investment arm of parent Phoenix Group, reported operating profits had fallen from £46m in 2011 to £43m last year.

Meanwhile AUM fell to £68.3bn at the end of the year, down around 5% from £72.1bn in 2011.

Ignis – which announced a restructure of its shareholding in joint ventures including Argonaut at the end of 2011 – said a combination of the restructure of its joint ventures, and a run-off of assets in its multi-billion pound life book, had impacted profits in 2012.

“Ignis’ IFRS operating profit of £43 million was impacted by lower performance fees generated by one of the joint ventures managing life company assets, the restructuring of the joint ventures and life company run-off, partly offset by growth in third party business,” the group said.

While profits fell, the group reported solid inflows. It said in 2012, it attracted new third party inflows of £1.6bn, on top of a £4.7bn deal with Guardian to continue managing its annuity assets.

Looking forward, the group revealed plans to expand its fixed income offering with the launch of a hedge fund version of its Absolute Return Government Bond fund (ARGBF).

“Planned for 2013 is the launch of a hedge fund modelled on ARGBF,” the group said.

In 2012, the group said the existing fund – run by Russ Oxley and Stuart Thomson – was one of its most successful mandates, with net sales of £436m.

It also intends to market its absolute return emerging market debt fund, which it said has delivered positive investment performance for Phoenix policyholders since its inception in 2011.

Ignis chief executive Chris Samuel said in a statement: ‘Ignis has made considerable progress against its stated objectives in what was a year of significant change.

‘The discontinuation of life company administration, the restructuring of Ignis’ former joint ventures and additional investment in people, infrastructure and technology has laid a solid platform upon which to facilitate future growth in each of the markets in which we operate.’

He added: ‘We continue to invest in the business and have a busy year ahead as we continue to develop our third party franchise. With further absolute return fund launches planned in the summer and the build out of our institutional business, the company is well placed to capitalise on its achievements in 2012.”


This article was first published on Risk

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