Jefferies analysts downgrade Henderson on Brexit fears

Jefferies analysts Phil Dobbin and Sophie Woodward-Fisher wrote in a note on June 30: “It is a statement of the obvious that £19.3bn of retail European AUM looks more perilous than it did a week ago, and is likely to have higher churn than UK retail clients or institutional clients.”

They pointed out that Henderson has enjoyed “super-normal” inflows to its Luxembourg-based mutual funds, of £9.4 billion between 2013 and 2015, and that they were downgrading the stock from “hold” to “underperform” thanks to “a more difficult investment environment post-Brexit”.

Henderson, whose chief executive Andrew Formica was among the business leaders who came out for Remain in the final days before the referendum, said in its first-quarter trading statement in April that Brexit risk was weighing on investor appetite even then.

Henderson’s share price has declined 13% since the referendum, from 267.2p at the close of trading on June 23 to 204.8p as of 10:09am BST on June 30. Jefferies’ analysts said their price target for the stock was now 172p.

Henderson did not immediately respond to a request for comment.

In contrast, Jefferies said in a separate research note it was maintaining a “buy” rating on rival UK fund manager Jupiter Asset Management, even though it also reduced its price target for the firm’s shares. Dobbin and Woodward-Fisher cited Jupiter’s unusually-stable and largely British retail investor base.

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