BlueBay Asset Management (LSE:BBAY) dropped 20% after warning that it would miss expectations for its full year results. The asset management group said that while net inflows for the first six months of 2008 were ahead of expectations, performance fees for the full year were likely to be lower than anticipated. The net results was a revised expecation that at the profit before tax level, BlueBay would post "broadly similar" results to last year.
Bluebay also confirmed that it would shortly change the managment and performance fees of its Value Recovery Fund. The new terms will see BlueBay charge lower managment and performance fees but will prohibit redemptions from the fund until July 2009 and "significantly restrict them thereafter".
Hugh Willis, BlueBay's Chief Executive Officer said:
"Our current financial year has coincided with the worst credit market conditions seen in many years. While disappointing, it is therefore unsurprising that performance fee generation for the period has been modest. Asset growth has been very strong, however; reflecting both the appetite of investors for credit product at this point in the cycle; and the strength of the Company's specialist credit franchise. In addition, despite radically less favourable trading conditions, our profits on ordinary activities before tax for the year are expected to be broadly similar to those achieved in the previous year. While market conditions are likely to remain volatile in the near term, we continue to be well positioned to benefit both from the strong secular growth trends that have driven BlueBay's growth to date; and from the clear cyclical opportunity currently developing in credit markets."