Shares in Bluebay Asset Management have slumped 29% to 70.75p after it warned on revenues and decided to close down an emerging market fund which has lost 53% of its value over the last year.
It also announced that Simon Treacher, portfolio manager of the fund concerned (the emerging market total return fund) had resigned after "a breach of internal valuation policy." This apparently was "recent, limited and resulted in no material impact on the net asset value of the fund." Nor was it the reason for the fund being closed, the company maintained.
The fund - estimated to be around $1.2bn - accounted for 6% of Bluebay's overall assets under management, and its closure will mean revenues for the year will be below market forecasts. Still, nice to see the company stress that this mess will "not affect in any way our commitment to emerging markets."
Singer Capital Markets said:
"The management fee on this fund would have been 2% so the full year revenue impact would be $24m and reduce current year revenues by around half this in dollar terms.
"Since we last struck our estimates the dollar has strengthened against sterling which will benefit the sterling reported results although fund performance has been negative across the funds (around -15%).
"The net effect of this is likely to be a reduction in estimates in the current year ending June 2009 of around 10% (due to this fund closure and negative fund performance offset by the dollar strength).
"For year end June 2010, our estimates are likely to be reduced by 5% given the full year impact of the fund closure offset by dollar strength."
