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Wednesday, May 02, 2012

Is Artio Facing a "Slow-Motion Unwind"?

News summary by MFWire's editors

Artio Global Investors' [profile] assets under management have dropped 52 percent to $26.6 billion on March 31, 2012, down from $55.8 billion when the New York City-based asset manager IPOed in September 2009. Kirsten Grind of the Wall Street Journal reports on Artio's woes, pointing to the mutual fund shop's heavy focus on a single investing strategy, one that has not fared well in recent years.

According to Morningstar, Artio's signature Artio International Equity I and Artio International Equity II both remarkably underperformed their benchmark in recent years, thanks in part to the sovereign debt crisis that the market has been suffering for the past years.

According to the pub, even though first quarter results show that both offerings have rebounded, clients are still withdrawing their cash. Artio's earnings report shows a 48-percent decline in AUM year-over-year.

Tony Williams, president and chief operating officer of Artio, insisted that the company is healthy with $46.9 million in cash and a debt-free balance sheet as stated in their earnings report.

"The last three years have been very unusual in terms of our longer-term track record," Williams told the WSJ.

Yet Citigroup's William Katz and other analysts worry about Artio's outflows.. In a research report which was published in January, Katz wrote: "The persistent level of outflows raises ongoing concern questions in our view."

Improving on the firm's performance is now the priority, according to Williams. He added Artio would not consider taking the firm private or selling itself.  

Edited by: HFD

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