Canaccord stays at 'buy' for Gresham House on 'strong' outlook
By Alexander Bueso
Date: Friday 18 Sep 2020
(Sharecast News) - Analysts at Canaccord Genuity have reiterated their 'buy' recommendation and 839.0p target price for shares of Gresham House, the alternative fund manager, given its focus on Environmental, Social and Governance issues and "strong" long-term outlook for the business.
At the half, the fund manager posted a 16.7% jump in assets under management, led by 10.0% increase in organic AuMs while total core income rose 33.3% versus the year before to reach £17.8m.
The Canadian broker labelled the results as "very robust in the midst of extremely challenging markets".
Its interims also showed good progress towards Gresham House's five-year targets, namely achieving a 15% return on invested capital, growth in AuM to over £6bn and operating margins above 40%.
Gresham had also unveiled plans for new fund raisings in the backhalf of 2020 centred on areas such as Forestry, Housing, New Energy and Sustainable Infrastructure.
"The outlook statement reads positively, for both H2'20 and beyond, thus our view that the risk to our forecasts is to the upside in the short term.
"We continue to favour alternative asset managers, who are riding a wave of increased allocations. When coupled with the sustainability exposure that GHE offers, we believe the medium to long-term prospects are strong."
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