Ashmore chief makes £750m from stock market debut

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The Independent Online

Mark Coombs, the chief executive of the emerging market asset manager Ashmore, was £750m richer yesterday after shares in the company began trading on the London Stock Exchange.

Mr Coombs netted £170m by selling 25 per cent of his shares in the placing at 170p and retains a further 43 per cent of the company, worth £582m. Based on last night's closing price of 192p, the entire company is valued at £1.4bn.

The company's staff, including Mr Coombs, will retain a 67 per cent stake in the group, worth £915.5m, although as part of the listing conditions staff cannot sell any shares for four years. The company's only other investor, Alchemy Partners, the private equity group run by Jon Moulton, also sold a quarter of its 7 per cent stake in the business.

Mr Coombs, originally a lawyer, has overseen a period of exponential growth since Ashmore Group bought itself out of ANZ Bank seven years ago, when its assets under management totalled about $16m.

Assets under management have doubled to $20bn in the past year, thanks to a combination of strong investment returns, few competitors and inflow of institutional money.

Ashmore has been able to deliver outstanding investment returns for its investors mainly thanks to a re-rating of emerging market debt over the past five years.

Six years ago, in 2000, only 2 per cent of emerging market sovereign debt was investment grade. Now credit rating agencies rate half of emerging market debt at investment grade or better.

According to one banker who worked on the Ashmore float, the chances of that situation reversing are very slim.

He said: "This is an irreversible trend. Many emerging economies are fundamentally stronger than EU countries but Ashmore is one of only a handful of global investors to specialise in this sector."

Although the company is keen to stress that it does not run hedge funds - all of its funds are long only - it has been able to charge investors hedge fund-style charges and features in hedge fund "fund of funds" portfolios.

Fees include 15 per cent of profits once any fund has grown by 25 per cent in a single year. Profits for the year to 30 June rose by 114 per cent to £103.9m, after revenues rose 105 per cent to £137m.

According to a source close to the company demand for the shares from institutional investors was "very impressive", and the placing is thought to have been several times subscribed.

The joint book runners, Goldman Sachs and UBS, placed shares in Ashmore Group on Wednesday night at 170p.

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