London-listed asset manager Polar Capital has reported a substantial earnings surge, driven by what the firm describes as "meaningful exposure" to technology stocks during the ongoing artificial intelligence boom.
Financial Performance Exceeds Expectations
Pre-tax profits jumped 21 per cent to reach £27.9 million, up significantly from £23.1 million during the same period last year. This impressive growth occurred despite the company experiencing substantial outflows totalling £690 million, with a notable £632 million concentrated in the first quarter alone.
Remarkably, assets under management achieved a record high, climbing 25 per cent to £26.7 billion as of 30 September. The growth trajectory continued, with the group reporting that assets had reached £28.4 billion by 7 November.
Technology Dominates Investment Strategy
The artificial intelligence frenzy has provided a significant boost to Polar Capital, whose technology strategy now represents 51 per cent of the group's total assets under management. Tech-focused assets reached £13.6 billion at the end of September, demonstrating substantial growth from £9 billion at the close of March.
Artificial intelligence and global technology funds were highlighted as primary sources of net inflows, contributing to the £195 million instream. The Polar Capital Global Technology Fund particularly stood out, recording inflows of £226 million during the second quarter. This performance reversed outflows from the previous three months and delivered an 18 per cent return, outperforming the average technology market index.
Market Warnings and Future Outlook
Despite the strong performance, concerns about potential market corrections persist. The Bank of England has joined other voices in warning about a potential "sharp correction" in global markets, citing "stretched" stock valuations resulting from the artificial intelligence boom.
Chief executive Iain Evans commented: "The first half of Polar Capital's financial year ended on a positive note for equity markets and our meaningful technology exposure was a clear tailwind." However, he acknowledged that the macro environment remains "uncertain and likely to remain volatile."
The company's future strategy focuses on scaling areas of strength, applying targeted fixes where necessary, selective diversification, and leveraging distribution channels, particularly in the United States.
Basic earnings per share increased by 22 per cent to 21.1p, while the group maintained its interim dividend at 14p, consistent with the previous year's level.
Prominent financial figures have expressed concerns about the technology sector's rapid growth. Goldman Sachs chief David Solomon warned that markets face a potential "drawdown" as AI enthusiasm propels indexes to continuous record highs. Meanwhile, Michael Burry, famous for predicting the 2008 financial crisis, has disclosed billion-dollar bets against AI-focused companies Palantir and Nvidia.
