UBS downgrades asset manager Ashmore, prefers Henderson

14th Apr 2014 10:22

Ashmore and Henderson are the two most expensive asset managers, according to UBS, which downgraded its rating on the former from 'buy' to 'neutral' on Monday.UBS said it remains positive on the emerging markets-focused group's fundamentals, though "the valuation is now demanding for an asset class that we feel has stabilised but continues to have a subdued short-term outlook".The bank said that the stock trades at a 13% premium to the sector.Henderson, however, remains a 'buy' and stays on the bank's Most Preferred list as it continues to be in the "sweet spot" with flow momentum positive in Europe."Consensus continues to expect a rapid normalisation of flows at Henderson, but our data suggests a repeat of Q4 - i.e. a +15% flow to opening AUM. We are 7% ahead of consensus for the financial year ending 2014."Meanwhile, UBS sees opportunities for UK-exposed assets managers from pension reforms in the latest budget. It said that changes to the annuity market will open up a £12bn-a-year pot that would "uplift aggregate UK retail flows by 15% if just a quarter of the opportunity was captured by asset managers".Schroders is seen as the best positioned to exploit this opportunity due to its "strong capabilities in the multi-asset and targeted outcome products that will likely sell well". The stock is rated 'neutral' but has been removed from the Least Preferred list.Elsewhere, the bank has kept a 'buy' recommendation for Aberdeen and a 'neutral' stance on Man Group.BC