Henderson Group HGG Heading Higher
The group employees over 1100 people worldwide are a member of the FTSE 250 index and the S&P/ASX 200 index. HGG specialises in a number of investment styles and asset classes, including equities, fixed income, property and private equity.
Its client base ranges from institutional to retail and high net worth individuals. As of June 2013, the group held £67.9 billion of funds under management.
> 1H13 underlying profit before tax increased was £101.1 million pounds, a 22% increase on the 1H12 result
> Operating margins expanded 260 basis points on the previous corresponding half
> Funds under management increased 7% year on year to £67.9 billion
> 73% of funds exceeding benchmarks, helping the group generate an extra £35.3 billion in performance fees, which was one of the key drivers in the aforementioned results
> Group has no debt with a £16.7 million net cash position
> HGG and Teachers Insurance and Annuity Association -College Retirement Equities Fund (“TIAA-CREF”) have agreed to combine their European and Asian real estate businesses to form a leading real estate venture, TIAA Henderson Global Real Estate, with assets under management of approximately £13.0 billion.
> HGG to receive £114.2 million for assets and will own 40% of new entity to be named TIAA Henderson Global Real Estate
HGG’s 1H13 results were impressive; we view underlying profit growth coupled with margin expansion an encouraging sign.
We view the group’s sale of its property entity as a real positive, as it will allow focus on expanding its core investment management business of Global Equities, European Equities, Absolute Return, Multi-Asset and Global Fixed Income.
In addition to the increased focus on core businesses, it will strengthen the group’s balance sheet, possibly allowing for additional capital return in the form of a share buyback or special dividend.