Asset manager Ninety One warns market challenges not over yet

By Pushkala Aripaka

(Reuters) - Ninety One Plc warned of challenging market conditions for a "foreseeable future", sending shares in the London-listed asset manager down 6% on Tuesday, after it posted net outflows of 3.2 billion pounds ($3.8 billion) in the first half.

After a boost in managed assets during the pandemic, fund managers are now witnessing a fall as jitters over the UK's financial stability and a sharp sell-off in global markets compound worries about a recession amid soaring rising inflation and interest rates, as well as heightened geopolitical tensions.

"This period presented us and the industry with an unusually challenging environment," Chief Executive Officer Hendrik du Toit said on a media call.

The Anglo-South African company's assets under management (AUM) at end of the six months to Sept. 30 stood at 132.3 billion pounds, compared with 143.9 billion pounds at end-March, when it also reported net inflows of 5 billion pounds.

"There are a few accidents that should still happen before the markets settle down," Toit said, referring to events such as the crisis in Chinese property markets, mass layoffs at Facebook parent Meta and volatility in the cryptoverse.

"I don't think we're out of the woods yet... At Ninety One we are preparing for a prolonged period of volatility and challenging markets, and we are just warning shareholders that we don't think there will be easy gains to be had," he added.

Several British fund managers, including Man Group, Quilter, Rathbones, and Liontrust Asset Management, have said their AUM dropped in the three months to end-September.

Ninety One's profit before tax in the period fell 16% from last year to 110.6 million pounds, but Toit sought to reassure investors that the business was in "good shape" and the company would focus on long-term growth.

($1 = 0.8472 pounds)

(Reporting by Pushkala Aripaka in Bengaluru; Editing by Rashmi Aich)