(Sharecast News) - RBC Capital Markets upgraded alternative asset services firm Sanne to 'outperform' from 'sector perform' on Monday, lifting the price target to 730p from 600p.
RBC said that while it continues to forecast slightly slower organic growth in 2021, reflecting some impact on new business wins and the pace of onboarding, medium-term structural drivers in the alternatives segment are robust.
"We expect the trend in outsourcing, increased regulation, the growth in allocation to alternatives and the growth in assets under management to continue to drive high single digit organic growth rates.
"The bigger players should be in a position to take a disproportionate share, given the ability to add structures and services in multiple jurisdictions, as well as being able to invest in technology that potentially reduces cost to serve and provides a better customer experience."
The bank also said that cost issues at Sanne look to have been put to bed and the business looks in good shape to continue its strong organic profit growth trajectory "with M&A on top".
"With a shortage of genuine growth names in the sector at reasonable valuations, we move to outperform," it said.
At 1100 BST, the shares were up 9% at 680p.
9 Sep 2020 07:35
Sanne hikes interim dividend after decent first half
(Sharecast News) - Sanne reported net revenue growth of 9.5% in its first half on Wednesday, to £83.9m, which ot said reflected the "resilience" of its client book, as well as the second quarter Covid-19 related slowdown in new fund activity.
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