Specialist alternative asset manager Gresham House (GHE) posted a bigger than expected increase in assets last year thanks to strong organic growth.
Together with a sharp hike in the dividend, the news sent shares up 5% from their recent lows to 825p.
STRONG DEMAND
For the year to December, AUM (assets under management) climbed 65% to £6.5 billion due to a combination of investment performance, fundraising and bolt-on acquisitions.
The firm described its fundraising activity as ‘outstanding’, with £206 million of net new money flowing into its Strategic Equity open-ended and VCT (venture capital trust) funds.
A further £100 million was raised for Gresham House Energy Storage Fund (GRID) and £150 million raised for BSIF II, its second sustainable infrastructure fund.
Forestry assets also proved a big draw with the firm launching a new Forest Growth and Sustainability fund with £202 million of assets and investing £430 million in an Australian forestry products group on behalf of French insurer Axa.
HIGHER PAYOUTS PROMISE
Core net income increased by 51% to £61.6 million against £40.8 million the previous year, leading to earnings per share of 49.4p against 32.9p.
This in turn led to a 67% increase in the dividend to 10p per share, with management promising to raise the payout to a third of operating earnings going forward.
The 2025 AUM target was also raised to £8 billion, although at the current rate of growth it is likely to hit that level quite a bit sooner.
Jefferies analyst Julian Roberts hiked his earnings estimates on the back of the new AUM forecast and increased his dividend forecast for 2022 from 8p to 20p.
Roberts maintained his price target of £11.90, flagging the firm’s ‘strong growth, good positioning to capture allocations to sustainable real assets and positive operational gearing.’
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