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Listed funds management holding company HFA Holdings has posted a profit of just under $1 million for the first half of this financial year, compared with a more than $570 million loss in the previous corresponding period.
HFA Holdings posted an after-tax profit of $993,000 for the six months to December 31, 2009, following a more than $570 million loss in the previous corresponding period. The group said that abnormal loss was primarily the result of non-cash impairments in its Lighthouse Partners business.
The group’s net revenue was down 44 per cent to $36.4 million.
HFA Holdings chief executive Spencer Young said the results reflected falls in management and performance fees as the group’s assets under management (AUM) fell.
At the end of December HFA Holdings had funds under management of $5.6 billion (steady from the end of June) and AUM of $5.7 billion (down from $6.2 billion at June 30, 2009). Of that HFA Asset Management (HFM AM) had $1.6 billion (down from $3.6 billion at the end of 2008) and Lighthouse had US$3.5 billion (down from US$4.7 billion over the same periods).
Young pointed to the continued deleveraging of HFA AM products during the first half as one of the reasons for the fall in AUM, adding that at the end of December there was $113 million of leverage remaining in HFA AM products. HFA AM emerged as the weaker of the company’s two businesses in terms of recovering from the effects of the crisis. HFA AM is now preparing to launch two new funds in an effort to broaden its investment base.
Young said Lighthouse saw stronger inflows in the first half, pointing to an increase in investor appetite in the absolute return space.
Lighthouse fund flows for the half were positive at $30 million, while HFA AM recorded net outflows of $167 million. The group said the majority of those were withdrawals from the HFA Diversified Investments Fund.
