Broker snap: Jefferies downgrades asset managers Schroders, Henderson and Jupiter

5th Apr 2013 09:51

Jefferies has downgraded its ratings for three asset managers, Schroders, Henderson and Jupiter, in a review of the sector following the strong equity markets and re-ratings seen so far this year.Unsurprisingly, given the year-to-date stock-market surge year seen across the globe, Jefferies says that the best performing asset managers in 2013 have been those with the highest equity exposure - Schroders, Henderson, Jupiter and Aberdeen.Meanwhile, the bond plays (F&C Asset Management and Ashmore) have not really moved and nor has the hedge fund manager Man Group.As such, the broker said that price-to-earnings multiples are now at highs ("excluding those times when earnings are falling fast").Jefferies said: "For the share rally to be sustainable therefore we need to see further upgrades during the course of the year, and those will come either from higher markets, accelerating inflows or both. "With financial uncertainty continuing to loom over the European landscape we feel this is less likely than a pause or retrenchment and so are easing back on our ratings."Schroders and Jupiter have both been cut from 'buy' to 'hold', but Henderson has been downgraded from 'hold' to 'underperform' "as we do not believe its lacklustre flows performance deserves a similar multiple to its peers and because its earnings will be held back by a higher tax charge and a larger share count".'Buy' ratings have been left for both Ashmore and F&C. Aberdeen is still a 'hold', while an 'underperform' rating has been retained for Man Group.BC