Ashmore Group H2 2026 Earnings Report

Ashmore Group EPS Results

• Actual EPS: GBX 15.67
• Consensus EPS: N/A
• Beat/Miss: N/A
• One Year Ago EPS: N/A

Ashmore Group Revenue Results

• Actual Revenue: N/A
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

Ashmore Group Announcement Details

• Quarter: H2 2026
• Date: 9/7/2026
• Time: Before Market Opens
• Conference Call Date: Monday, September 7, 2026
• Conference Call Time: 2:00AM ET

Ashmore is a specialist Emerging Markets investment manager with 30 years' experience in these markets. Based in London, the business was founded in 1992 as part of the Australia and New Zealand Banking Group. In 1999, Ashmore became independent and today manages USD 57.2 billion (as at 31 December 2022) across a range of investment themes in pooled funds, segregated accounts and structured products. Ashmore Group (LON:ASHM) has been listed on the London Stock Exchange since 2006.

Ashmore Group H2 2026 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Assets under management rose 13% to $54 billion, supported by $2.7 billion of net inflows, stronger subscriptions, lower redemptions and positive investment performance. Management characterized this as a potential turning point in the post-2022 flow cycle.
• Positive Sentiment: Subscriptions nearly doubled to $12.5 billion, with particularly strong demand in Europe and increasing interest from U.S. investors in emerging-market equities. Japan Post Insurance has invested roughly one-third of its additional $1 billion commitment, leaving approximately $600 million still to be deployed.
• Positive Sentiment: Profit before tax increased 17% to £126.9 million, while diluted EPS rose 28% to just over 15 pence; the board recommended an unchanged full-year dividend of 16.9 pence per share. The company also retains substantial financial resources of about £610 million against an £88 million capital requirement.
• Neutral Sentiment: Growth is broadening beyond the core fixed-income business: equities increased by roughly one-third to 19% of group assets, alternatives reached $2 billion, and local-office assets grew 13% to about $9 billion. Management plans to use its balance sheet to expand alternatives, particularly in emerging-market infrastructure, power, education and healthcare.
• Negative Sentiment: Adjusted net revenue fell 7% because of U.S. dollar weakness and lower performance fees, while the reported operating margin compressed to 26% due largely to variable compensation tied to seed-capital gains. Management expects current-year performance fees to be no more than £5 million and flagged ongoing pressure on management-fee margins.

Presentation

[Mark Coombs, CEO at Ashmore Group]

Ashmore Group, Tom Shippey, Group Finance Director. Some of you know us, hopefully most of you know us. Thank you for coming. We are going to update you on our results for the financial year ended 30th of June 2026. This is an overview, high level. I am sure many of you have already got through this. Market has been pretty good for us in the year. We have delivered outperformance much as we usually do. Emerging markets itself, the equity indices were up nearly 50%, 44%, and fixed income, anywhere between seven and 12. So, a nice backdrop for an investor. Our outperformance stayed pretty good. One year is up to 77%, and we are 68% and 67% over three and five. Performance is fine. There are strategies we would like to have been doing better, but performance is fine. Subs have basically started to increase. We have come through the cycles since the 2022 panic.

[Mark Coombs, CEO at Ashmore Group]

Oh dear, the Russians are revolting. We kind of got through that, and people now are starting to think about where they should put their money, given they have got an awful lot in the U.S. Our subs are up, basically nearly 100%, which is good. Lower redemptions as well. The redemption number has dropped by 20% year-on-year. So in the AuM space, bottoming and increasing. So, up 13% over all the $54 billion AuM. So exactly what we would expect to see this time in the cycle after a big redemption cycle, subscriptions start to outweigh it, redemptions drop, and you go back into growth. Net inflows of GBP 2.7 billion. Half of it fixed income, half it equities, and a little bit into alternatives. In terms of our strategy, in terms of diversifying our product set, that has been working.

[Mark Coombs, CEO at Ashmore Group]

The equity business has continued to grow. It is up a third this year. It is now 19% of the group's assets. We would expect it to be much larger over time. Alternatives growing as well, a little bit. Up a quarter, now $2 billion. And the local offices continue to grow. There is a suite of local offices, there will be others over time, continue to grow as a part of the money that we manage. Great thing about local offices are when people panic and want to go home, the local offices, they are already home. So we have seen net inflow all the way through since 2022 in our local office businesses. Just under $1 billion of inflow. So now local offices account for 16% of our assets. Seed has done well in the year. We made some money on our seed, and we are happy with that.

[Mark Coombs, CEO at Ashmore Group]

Our profits have increased as a result of it. Our adjusted revenues are down 7% however, due to lower performance fees on the core AuM. Investment returns have been pretty good on seed. GBP 80 million of gains on seed capital. That has worked, and we have been recycling seed, so we have been taking money off the table as well, which means the subscription process is working. So the seed capital is a good story. We realized life to date gains of nearly GBP 62 million on seed, so we are happy with that. Profit up 17%, GBP 127 million. Diluted EPS followed it to 15p. We are maintaining the DPS at 16.9. From here, macro, there is some good stuff going on, as well as some less good stuff.

[Mark Coombs, CEO at Ashmore Group]

But for EM, we feel we are going to be net beneficiaries of people saying we have just got an awful lot in the U.S. Our growth rate in EM is pretty strong, forecast to be twice as fast as DM. Finally, what we do, which is be active, try and stay out of trouble as well as get on the back of good things, is pretty important when we have got complex global world out there. A little more detail on that. On the right, we give you emerging market and developed market index returns. This is not our returns, it is indices. I mentioned equities for EM up 44%, MSCI World was up 21%, so EM outperforming the world as a whole. EM All Cap the same as the world. On the bond space, Bloomberg Global Aggregate was up 1%, that is global bonds index.

[Mark Coombs, CEO at Ashmore Group]

The three indices in emerging markets are all up more than that, from 7% to 12%. 7% in the corporate space and 12% in the sovereign bond USD space. That was good. It has been a good performance year. Election results generally across EM have been pretty strong and investor friendly. There has been a decline of, I guess you would say the extreme left and something more market friendly has come into place generally across EM. We are seeing our allocations increasing. We have got much, much more inquiry now from clients who have been with us for a long time and who take money out when they do not love the world in EM and put it back when they do. Clients thinking of topping up and doing some topping up, but also a lot more consultant-driven searches, looking for places to put money.

[Mark Coombs, CEO at Ashmore Group]

This is just a bit more detail on the investment performance. Pretty much everything is performing fine over the one year. Three year, we would like to see corporate a little better, and certainly five year. We have got to keep our local market performance, our local currency performance going because that is actually one of the things that is attracting people to invest, is non-dollar exposure. So how are we doing? This is our strategic plan that we tell you about every year. phase I is get people to allocate. EM has been a net inflow year, which is good as a backdrop. For us, that turned into $2.7 billion across fixed income and equities in particular, and a big increase in subs to $12.2 billion. phase II then is diversify what we are doing of our strategy, and that is growing the equities, the alternatives, and the local businesses.

[Mark Coombs, CEO at Ashmore Group]

Equity is growing well. Our preferred alternative is a reasonable percentage, but still not a big enough number. We would like that to be in a bigger absolute number. Retail itself, starting to increase again. Retail can be the stuff that falls the fastest first, and then increases again. Retail now up to 5% of group from a low of about 3%, I think. Finally, get emerging market capital moving. We are now up to GBP 21 billion of assets from emerging markets. This is 38% of group AuM, and our local offices grew 13% to GBP 9 billion, principally from Ashmore Colombia, Ashmore Indonesia, and Ashmore India. I will hand you over to Tom for some more detail.

[Tom Shippey, Group Finance Director at Ashmore Group]

Thanks. Okay, so a bit more detail on the movement in AuM. The 13% increase to the $54 billion was the product of both positive investment performance of $3.7 billion and $2.7 billion of broad-based net inflow. Consistent with the positive markets and the alpha that Mark has just described, Ashmore delivered positive investment performance across all of the investment themes. Subscriptions of $12.5 billion almost doubled in the year, gaining momentum as the year progressed, with subscriptions increasing by approximately 20% in the second half. The flows have been both a mixture of new mandates and additional allocations from existing clients, as well as being geographically diverse, with interest in EM investment from U.S. clients now seeing a notable pickup.

[Tom Shippey, Group Finance Director at Ashmore Group]

Flows in Europe were particularly strong, where subscriptions increased over 120% year-on-year and accounted for more than 30% of the total, with the demand focused on equity and investment-grade fixed income product. In March, the group announced a strategic partnership with Japan Post Insurance, who committed to invest an additional $1 billion. Over the period to June, approximately one-third of this commitment has been invested. The redemption profile also improved, reducing by 20% versus the prior year and marking the fourth consecutive year of reducing outflows. Overall, therefore, the group reported a net inflow of $2.7 billion, marking a turning point in this flow cycle. Fixed income, equities, alternatives in both the global and local businesses generated net inflows, demonstrating the breadth of activity across the group's locations and products.

[Tom Shippey, Group Finance Director at Ashmore Group]

In terms of current activity, in equities client engagement is global, particularly for the All Cap product and includes now the U.S. Demand for fixed income strategies is currently stronger in Europe and in Asia, with a continuing focus on investment-grade product. Since the year-end, Ashmore has continued to perform across both fixed income and equity and is therefore well-positioned as interest in the asset class continues, as evidenced by recent industry mutual fund data. Looking at the local offices, these provide increasing revenue diversification and generate an increasingly significant proportion of overall profits. Over the year, assets in the local offices grew 13% or $1.1 billion to approximately $9 billion, representing 16% of total assets. This growth rate is consistent with that of the global businesses, but varies by location, reflecting the diversity of the local markets and the stage of development for each of the local platforms.

[Tom Shippey, Group Finance Director at Ashmore Group]

Looking at each in turn, Ashmore India saw particularly strong net inflows following consistently strong investment performance across domestic listed equity strategies. These subscriptions were a combination of significant top-ups from existing institutional clients, combined with net inflows into both the onshore and offshore Indian equity mutual funds. Ashmore Colombia's listed equity strategies benefited from local index returns of over 40% in the year, following the presidential election and an improvement in the outlook for interest rates. The team in Bogotá now manages $1.3 billion of listed equities, is delivering strong performance for both domestic and international investors, and has recently launched a regionally focused LatAm mutual fund. The private equity and private debt infrastructure teams have continued to deploy capital and are now in the early stages of launching additional fund vintages. Across all strategies, Ashmore Colombia now manages $3 billion.

[Tom Shippey, Group Finance Director at Ashmore Group]

In a challenged domestic market, Ashmore Indonesia achieved asset growth of over 20%, driven by net inflows of $700 million, and delivered an increase in profit. The local team's focus has been on maintaining relative outperformance for clients, broadening onshore distribution channel access, and further development of the product range. The Saudi business currently offers two core strategies. Firstly, local thematic private equity vehicles such as education, healthcare, and industrials. Second, listed Saudi equities, where the team has a strong long-term relative performance track record, but experienced some net redemptions as local investors recycled capital in support of domestic projects earlier in the year. While the continuation of the regional conflict in the second half has not yet appeared to be a catalyst for further outflows, it is apparent that investment decisions are being delayed in the region.

[Tom Shippey, Group Finance Director at Ashmore Group]

Ashmore Mexico obtained regulatory approval in May, enabling the company to develop an onshore equity product to benefit from the forthcoming pension reforms, as well as advising on Ashmore's existing Mexico equities mutual fund. In aggregate, the average net management fee margin of the local platforms is slightly above 50 basis points. Given the benefits of operating with centralized support functions and a uniform IT infrastructure, collectively, they achieve a relatively high operating margin of 44%. Over time, the group will continue to look to expand the network into new markets with attractive demographics, accessible regulatory frameworks, and supportive macroeconomics and savings industries. In terms of the key financials, while assets grew 13%, this growth was more than offset at the net revenue level by a weaker U.S. dollar and a lower level of performance fees, resulting in a reduction in adjusted net revenue of 7% year-on-year.

[Tom Shippey, Group Finance Director at Ashmore Group]

As noted, returns across EM were strong, notably in equities, but also in fixed income, with Ashmore delivering outperformance. These index returns drove an aggregate 28% investment return on the group's seed capital and delivered profits in the year of GBP 82.5 million, notably from equities and in external debt. In keeping with the group's consistently applied approach of redeeming seed capital once the scale or performance objectives have been delivered, a high level of recycling was achieved, realizing life-to-date gains on the seed book of GBP 61.8 million. Operating costs therefore increased 7% in the year, largely driven by the increase in variable remuneration generated by the seed gains. While the VC accrual rate was reduced from 35% to 30%, given the seed gains, the P&L charge increased by 15%, broadly consistent with the growth in profit before tax.

[Tom Shippey, Group Finance Director at Ashmore Group]

Therefore, as a result, adjusted EBITDA reduced to GBP 35.7 million, and the operating margin compressed to 26%. Excluding the impact of seed capital, the underlying operating margin increased to 40% from 37% year-on-year. Ashmore's cash balances provided GBP 11.4 million of interest income, lower than in the prior year period due to lower prevailing rates and lower average cash balances. In aggregate, profit before tax increased 17% to GBP 126.9 million, and diluted EPS up 28% to just over 15 pence per share. The group has continued to maintain its substantial financial resources of approximately GBP 610 million, significantly in excess of its capital requirement. Given the momentum in the business and the continued strength of the balance sheet, the board has recommended an unchanged final dividend of 12.1 pence per share to give a total DPS of 16.9 pence for the full year.

[Tom Shippey, Group Finance Director at Ashmore Group]

Looking at revenues, average assets increased 4% in the year, but the impact on net management fees was offset by U.S. dollar weakness and a one-basis-point reduction in the group's net management fee margin compared with the prior year period. As usual, a number of factors were behind the move in the margin, including a positive mix impact with inflows and asset growth in equities and across the local market businesses, offset by higher average overlay assets, which naturally increase in a period of strong underlying asset class performance. Higher margin private equity realizations in the prior year impacted alternatives. It is, however, noticeable that the group's average fee margin over the last 12 to 18 months has been relatively stable, with the entry rate, average rate, and exit rate all being approximately 34 basis points.

[Tom Shippey, Group Finance Director at Ashmore Group]

Industry-wide pressure on management fee margin remains, however, but the group's strategic growth objectives in higher-margin products such as equities and alternatives, including across the local offices, together with an increase in intermediary retail channel assets, provide support over the medium term. Performance fees reduced to just over GBP 1 million in the financial year, consistent with guidance. The reduction was the result of fewer asset realizations from alternatives compared with the prior year. Including alternatives, which are inherently hard to predict, and based on current market levels, I would expect performance fees for the current financial year to be no more than GBP 5 million, broadly consistent with the average of recent years. Finally, other revenue doubled in the year to GBP 5.8 million, predominantly due to a high level of transaction fees.

[Tom Shippey, Group Finance Director at Ashmore Group]

Total operating costs increased by 7% given the variable compensation consequence of the seed capital gains, with limited increases in the other operating cost lines. Operating costs before VC increased by just 2%, with a 3% increase in salary costs driven by a rise in average head count, largely from expansion in the local offices, and a 13% increase in depreciation, predominantly owing to the London office move. I would expect the forward-looking depreciation charge to be broadly consistent with the current year. In recognition of the improvement in the group's performance, the delivery of net inflows, strong ongoing investment performance, and the realization of profits from the seed portfolio, variable remuneration increased to GBP 45.6 million. As a proportion of profits, this represents 30%, down from 35% in the prior year period.

[Tom Shippey, Group Finance Director at Ashmore Group]

Looking ahead to FY27, we will continue to maintain a strong focus on controlling expenditure globally while investing in key medium-term growth and efficiency initiatives, including the use of AI where appropriate. Overall, I would expect non-VC like-for-like operating costs to increase at approximately 2% to 3%. Ashmore's well-established seed capital program has been supporting growth in AuM and delivering investment returns for shareholders for over 15 years now. To date, it has delivered nearly GBP 300 million worth of investment gains, of which GBP 225 million have been realized, and the program has helped to establish new products and distribution channels, which have added over $6 billion to assets. Mark-to-market profits in the current year were GBP 82.5 million, twice the level achieved in the prior year. Consistent with the broad-based investment performance delivered for clients across Ashmore's themes in the period, there were positive seed returns across all themes.

[Tom Shippey, Group Finance Director at Ashmore Group]

Equities delivered approximately 40% of the mark-to-market gains while representing approximately 30% of the group's seed capital exposure. The remaining gain was split across other investment themes with meaningful contributions from both external debt and alternatives. As usual, once seeded funds meet their return on scale targets, we look to recycle the seed back onto the balance sheet to make the capital available for future growth initiatives. Over the first six months, the value of the seed increased to almost GBP 400 million with mark-to-market gains of GBP 55 million and new investments of GBP 38 million, offset by GBP 47 million of recycling. In the second half, given the continued strong returns and the increase in client subscriptions, a further GBP 126 million was able to be recycled, meaning in total, almost 50% of the opening value was redeemed over the 12 months.

[Tom Shippey, Group Finance Director at Ashmore Group]

This represents an increase from the historic average levels of approximately 30%. Approximately 40% of the total recycled came from equities, consistent with the increase in client flows. The higher level of recycling crystallized GBP 61.8 million of gains versus GBP 5.2 million in the previous financial year. As at 30th of June, as yet unrealized gains totaled GBP 69.8 million. Looking into FY 2027, I would expect the level of recycling to return to closer to the historic average of 30%, obviously being dependent on factors such as continuing performance and third-party client subscription levels. The group will continue to use its balance sheet to support strategic growth initiatives, notably, as mentioned, into private equity investment opportunities in support of growth and alternatives such as healthcare.

[Tom Shippey, Group Finance Director at Ashmore Group]

I therefore expect the alternatives allocation in the overall seed book to continue to increase both in absolute terms and as a proportion of the whole. Finally, in terms of the other P&L items, the interest earned on the group's cash was GBP 11.4 million, compared with GBP 20 million in the prior year. The reduction was the result of a lower interest rate environment, coupled with lower average cash balances. Current deposits are earning just over 4%, with sterling term deposits being placed at a similar rate. The group's effective tax rate came in at 15.4% below the U.K. rate of 25% and lower in the year owing to an increase in the value of deferred tax assets relating to share-based remuneration and certain of the seed capital gains not being taxable in the U.K.

[Tom Shippey, Group Finance Director at Ashmore Group]

In terms of guidance for the current financial year, the geographic mix of profits continues to imply a tax rate of approximately 22%. Finally, a quick recap on the balance sheet. Ashmore Group continues to be well capitalized with total financial resources increasing in the year to approximately GBP 610 million, significantly more than the assessed capital requirement of GBP 88 million, implying excess capital equivalent to GBP 0.73 per share. The group's financial resources remain liquid with approximately GBP 355 million of cash in deposits. Of the GBP 323 million of seed capital investments, more than 70% are in funds with at least monthly dealing opportunities. In terms of the cash flow, the group's cash balances increased by approximately GBP 15 million over the year.

[Tom Shippey, Group Finance Director at Ashmore Group]

The group's operations, including interest and net of tax, generated approximately GBP 42 million, while realizations from the seed capital portfolio generated cash of GBP 109 million. The EBT bought shares worth GBP 14 million to satisfy employee equity awards. In summary, therefore, Ashmore's continuing financial strength enables investment in support of the group's strategic objectives, underpinning future AuM and profit growth. With that, I will pass you back.

[Mark Coombs, CEO at Ashmore Group]

Thank you. Thanks, Tom. Outlook. Nothing particularly revolutionary here. We talk about the debt and the equity piece on the right. The global investment cycle is going to carry on. It is going to be AI, maybe at different pace, energy security and defense big time, and supply chain resilience. Yes, that is all going to happen. EM has parts that will benefit and parts that will not, but broadly, there are places to invest in EM that benefit from all of that, be it critical mineral provision, be it need for manufactured goods, et cetera. None of that is really changing for us. The macro, as I say, EM growth is going to be double DM. We are still at a big equity index discount to develop market indices. You can argue the develop market is too expensive, but still a 52% discount is a big gap.

[Mark Coombs, CEO at Ashmore Group]

Real yields substantially higher than DM and less indebtedness generally on average. There is more upside available in the fixed income space from spread compression as well. The third point is obviously what the hell is the U.S. going to do? Everything looks better relative when things look a little bit crazy in terms of the U.S. leadership or not. Very interesting time in terms of what happens to the U.S. dollar from here. U.S. rates need to go up. Big and growing political pressure not to do that. Extremely important to see what the Fed, what policymakers in the U.S. do to maintain credibility and what that will do to flows which have been massively pro-U.S. for the last 10, 15 years. That is important. Obviously, geopolitics, fighting people is kind of a big issue too.

[Mark Coombs, CEO at Ashmore Group]

We all want what is going on in the Middle East to settle down. It would be nice if the Russia-Ukraine thing did as well, but we are kind of dealing with it. The Middle East is a very important factor that none of us can really judge other than it going on is painful in terms of inflation globally, and that gets reflected in the U.S. and puts U.S. under pressure and eventually puts U.S. equity assets under pressure as well as U.S. bonds. Very interesting next three months. The next three months is going to be about being a relatively good outperformer. Might be quite hard to be a massive upside performer if markets are difficult, but being relatively good, holding on to your outperformance.

[Mark Coombs, CEO at Ashmore Group]

It does mean that you get some interesting opportunities that genuinely diversify from that, and EM tends to be a place to do that. We think there's one or two things we can be doing in EM that are uncorrelated except in a crisis to the U.S. There we go. We talk about upside spread from spread compression. There's some room there. EM equities has done pretty well relative over the last 18 months. We think if anything, that might continue to improve. That's quite a big number here. That's quite a big amount of outperformance against the S&P. We've done well in the market this year, absolute and also relative. Tick. We're okay with that. Wearing our Ashmore hat. Yep. Okay. Subs are up as we would hope they would be. We seem to have hit the bottom in terms of the sub-cycle.

[Mark Coombs, CEO at Ashmore Group]

Lower redemptions is showing net inflows across all three sets of what we do. Great. Strategically, our equities business is growing as we had hoped it would. We could always do better in it. I'd love to see all three core components of it growing as the local businesses are growing. One of the three core businesses growing nicely, the other two not so fast. We'd like to see that do better. The local office network I think will continue to expand. We're always keen to do that in a way that makes profits though, so we don't go piling into places unless we feel we can raise assets and make money pretty much straight away. We'll have other things to do there. Seed capital has been great this year. Thank you very much for that. That was good. That's been an increase in profits.

[Mark Coombs, CEO at Ashmore Group]

We have lots more to do as we grow the core business. Relative macro should underpin further what EM does. I like where we are relative macro. I think that's about it, unless there are any questions. I'm hoping there are thousands. Oh look, Q&A. I'm hoping there are thousands of them. Yes, please.

[Analyst]

Thank you. Two questions if you don't mind. First, I guess you said you want alternatives to be a bigger factor. I was just wondering if you had anything in the pipeline and what you're doing to kind of invest into that platform. Then second, I know summer months are typically slow in terms of client conversations, but any color on what you're getting from clients over the past two months relative to previous summers? Thanks.

[Mark Coombs, CEO at Ashmore Group]

In terms of the alternative space, obviously we have a balance sheet that we use for seed, and we have used and will continue to use that for alternative assets where we see opportunities to build things. Particularly focusing in the spaces that we like, which tends to be build out EM infrastructure. Within that, power, education, healthcare, all those kinds of things. We will use our balance sheet to do that. We are looking at how else we might bring other assets in to help us there. But initially, let's say balance sheet is the main driver of that. In terms of summer flow or summer conversations, I would say the conversations, there is kind of two things going on.

[Mark Coombs, CEO at Ashmore Group]

Obviously, when the activity in Iran happened, everybody sort of stopped and started staring at the wall going, "Now what?" That kind of conflict lowers activity generally. Q1, the first thing people do is they either panic and dive behind the sofa and take all their money home, and if they get over that moment, they then tend to do nothing for a bit. In terms of conversation, I would say we are kind of seeing two things. The people who are already invested in EM, and not all of whom are our clients, sadly, that is the market to chase, but we are now having much more dynamic conversations with them about doing more in EM. As a precursor, what tends to happen when people are thinking about that is the first thing they do is they look at their existing sort of slate of managers.

[Mark Coombs, CEO at Ashmore Group]

We are seeing a lot of institutions sort of refreshing their slate, saying, "Let's do a new set of comparisons. Are all our managers great? If we are going to commit more capital, are we sure we got the right managers to do it?" What we tend to see in that situation is if we are doing well, we get some switch money. Somebody fires somebody and hires us. As the first stage, and then the second stage, they add more capital probably across the whole slate. I would say the switch stuff was behind some of our equity assets this year, and I would say those kind of conversations are ongoing. I think for me, that is kind of a leading indicator of people wanting to put more money to work. But we, with a small market share, say, in equity, can be a beneficiary of that.

[Mark Coombs, CEO at Ashmore Group]

Fixed income may have a larger market share, it is harder. But even within fixed income, from Europe and Asia, we are seeing interest to put more money to work. The U.S., not much. The Americans are mostly equity investors anyway, and so they are thinking that way. The good thing for us is that we are now in a very good place vis-à-vis the U.S., and we have now got a track record, we have now got the product available. I would say conversations versus other summers, it is just a different time in the cycle. Different time in the cycle. Pretty good conversations. Of course, what will help us massively is everything settles down in the Gulf. That will pick up things really quite quickly. But we are seeing inflow despite that, the people who are already in emerging market investing.

[Mark Coombs, CEO at Ashmore Group]

The more sweaty things get in the U.S., the more we're seeing a bit more interest in increasing EM allocation. The sell-off in tech helps. U.S. rates might not initially help the bond space, but might not make much difference because it just encourages people to think, Christ, if they're so indebted and if the interest costs are going up so much, what does that mean long term for the dollar, even if it's short term positive, a rate rise? I think we got enough U.S. It's annoying people are fighting. Let's get the right EM managers phase. I don't know if that answers the question.

[Analyst]

It does. Thank you.

[Mark Coombs, CEO at Ashmore Group]

Please.

[Hubert Lam, Analyst at Bank of America]

Hi, it's Hubert Lam from Bank of America. Three questions. Firstly, just wanted to clarify what Tom said on Japan Post. You think there's a $1 billion mandate, right? There's another two thirds coming? Just wanted to check if that's correct.

[Tom Shippey, Group Finance Director at Ashmore Group]

Yeah. So they committed to invest an incremental $1 billion over 12 months. They've invested just under a third of it by June. So there's another, you can do the math, $600 million and something.

[Hubert Lam, Analyst at Bank of America]

And just remind us which asset classes is that?

[Tom Shippey, Group Finance Director at Ashmore Group]

Could be in anything that we do.

[Hubert Lam, Analyst at Bank of America]

Okay, good. A couple other questions. Firstly on, you mentioned retail.

[Hubert Lam, Analyst at Bank of America]

Bouncing from the lows of 3% up to five now. Can you just tell us where the flows are coming from in terms of type of product? I assume it's mainly what, in the U.S. or your clients as in the past, or is it different?

[Mark Coombs, CEO at Ashmore Group]

It started a little bit in the U.S.

[Hubert Lam, Analyst at Bank of America]

Yeah

[Mark Coombs, CEO at Ashmore Group]

in equity product. U.S. tends to buy equity. Otherwise, Asia, a little bit in Europe. Bit here, actually, U.K. To be fair, actually, U.K. we've seen some flow in retail.

[Hubert Lam, Analyst at Bank of America]

In equities or?

[Mark Coombs, CEO at Ashmore Group]

Across the piece. Bit of equity, bit of fixed income.

[Hubert Lam, Analyst at Bank of America]

Okay. And final question is on the U.S., because Americas today is what, 15% of your total client base?

[Mark Coombs, CEO at Ashmore Group]

Probably.

[Hubert Lam, Analyst at Bank of America]

Okay.

[Mark Coombs, CEO at Ashmore Group]

Do you have the number?

[Hubert Lam, Analyst at Bank of America]

Yeah, it is about 15.

[Mark Coombs, CEO at Ashmore Group]

About 15.

[Hubert Lam, Analyst at Bank of America]

So-

[Mark Coombs, CEO at Ashmore Group]

Thank God somebody knows.

[Hubert Lam, Analyst at Bank of America]

You are saying you are seeing increasing interest from U.S. investors, but-

[Mark Coombs, CEO at Ashmore Group]

For equity.

[Hubert Lam, Analyst at Bank of America]

For equities, okay. But fixed income still-

[Mark Coombs, CEO at Ashmore Group]

Not much. I mean, I say that, somebody will shoot me later, but not much. Much more equity, which, fine. I mean, U.S. is obsessed with equity, so at least we have equity product, which 10 years ago we didn't really have to sell them. Now we have it.

[Hubert Lam, Analyst at Bank of America]

Are they the main drivers of your inflows in equities or just?

[Mark Coombs, CEO at Ashmore Group]

No. No, they're not. Not yet, no. We've seen inflow and equity across the piece here, and Europe, and some in Asia. Less in Asia at the minute. U.S. a little bit, yes, but we would expect to see more inflow in U.S. equity in the next 12 months in this financial year.

[Hubert Lam, Analyst at Bank of America]

But not as optimistic on the fixed income side, despite.

[Mark Coombs, CEO at Ashmore Group]

I just think Well, the numbers will probably be relatively reasonable sizes. I just think the U.S. is an equity market. They like to buy equities. Lady behind you.

[Analyst]

Hi, just have a couple of questions for Tom. The first one is the fee margin of equities. Would you mind reminding us what was the decrease that we saw there year-on-year, the effects on that? Also, how should we think going forward about the VC comp ratio? Because it was 30%, last year was 35%, but of course, this year you had all these seed capital gains. So how should we think about this going forward? Thank you.

[Tom Shippey, Group Finance Director at Ashmore Group]

Sure. The equities revenue margin, the move there is the scale effect coming through. As we're building momentum, what we're seeing is larger allocations in segregated accounts alongside the existing mutual fund business. So there, the new capital is being priced on the size basically. So that's what you see in terms of the movement. Then in terms of the VC percentage, look, we're a couple of months into the year. We accrue at the half year and adjust in the summer.

[Tom Shippey, Group Finance Director at Ashmore Group]

I would assume a reasonable rate is between 30 and 35 on the operating profits. Then hopefully I've given you enough data points to think about what might happen in terms of the life to date gains for the rest of the year, if you think about the typical recycling percentage and the value of life to date gains that was accrued in the books at the June balance sheet date.

[Analyst]

Thank you.

[Mark Coombs, CEO at Ashmore Group]

Anybody else? Please.

[David McCann, Analyst at Deutsche Numis]

David McCann from Deutsche Numis. Just one very quick question. Just on the less than GBP 5 million performance fee guidance that you gave, Tom. Any reason that is not ticking up a little bit with improved, certainly nominal returns that you are making and a reported improvement in the investment performance? I appreciate it is a relatively small part of the book now that can generate them, but-

[Tom Shippey, Group Finance Director at Ashmore Group]

That is the point.

[David McCann, Analyst at Deutsche Numis]

still a relatively small number, just wondered why you're-

[Tom Shippey, Group Finance Director at Ashmore Group]

Yeah

[David McCann, Analyst at Deutsche Numis]

a bit more optimistic there.

[Tom Shippey, Group Finance Director at Ashmore Group]

So relatively small overall proportion of the book. The funds that can generate performance fees tend to be alternatives focused rather than liquid assets focused. While the liquid asset performance has been strong, an even smaller percentage of that book of business can generate performance fees. And of those that can, they're not necessarily just 12-month simplistic 20% over hurdle rate type fee structures that were prevalent 10 years or so ago. They'll have multi-period averaging, high water marks, et cetera. So the GBP 5 million is the max that I can see based on that proportion and those fee structures. Now, it could be that the alternatives piece could move it. So if we are able to realize assets from some of the older alternatives vintages, that could increase that. So the GBP 5 million is just on the liquids book, but as a realistic guess.

[Mark Coombs, CEO at Ashmore Group]

Anybody else? Let me grab the mic. Any other questions from anybody? Great. Well, thank you very much for coming. Thank you for your interest. Thanks for listening to us. We much appreciate it. Look forward to seeing you again, I hope, in a few months. Thanks very much, everybody. Thank you.

Participants

Executives

• Mark Coombs, CEO
• Tom Shippey, Group Finance Director

Analysts

• Analyst
• Hubert Lam, Analyst at Bank of America
• Analyst
• David McCann, Analyst at Deutsche Numis