Prime Financial sees ‘strong tailwinds’ in private markets
Prime Financial Group has announced its FY24 results, with further M&A activity and growth in the alternatives market ahead.
Announcing its full-year 2023–24 financial results, the financial advice and asset management group reported annual revenue of $40.8 million – a 21 per cent increase from $33.7 million in the previous financial year.
The firm remains on track in achieving its revenue goal of $50 million by the end of this financial year, said Prime managing director and chairman Simon Madder.
“We remain committed to our goal to deliver group revenue of $50 million in FY25, and then doubling this again to $100 million within three to five years, and believe we have the foundations in place to achieve this,” he described.
In Prime’s two key operating segments, the wealth division saw a revenue growth of 24 per cent to $18.8 million and its business revenue rose by 19 per cent to $21.8 million.
It also reported an underlying EBITDA result of $10.2 million, a growth of 18 per cent from the previous financial year. A final dividend of 0.85¢ was declared by the board, bringing the total FY24 fully franked dividend to 1.60¢ – up 7 per cent from FY23.
Speaking on an investor webinar, Madder attributed the strong revenue result to organic and inorganic growth as the firm remains equally focused on both avenues.
He remarked: “FY24 was quite an important inflection point for us. To have as much going on as we did between the organic focus and capturing as many new clients as possible, but also undertaking two really key strategic transactions – it has probably been the biggest year that we’ve had for a really long period of time.”
Prime’s recent M&A activity includes the acquisition of alternative asset management firm Altor Capital in February 2024 and Equity Plan Management (EPM), which offers remuneration and employee share plan administration services, completed last month.
“We were delighted with the EPS-accretive acquisitions we completed through FY24, being Altor Capital and EPM, both of which add capabilities, client bases, revenue and earnings to the Prime business.”
Moreover, the firm previously announced it had executed a confidential non-binding indicative offer (NBIO) for the acquisition of a Melbourne-based company that offers investment research, portfolio and asset management services. The managing director said an update on this deal will be provided in coming months.
“We’ll continue to undertake the right transactions for the right reasons and grow the business both organically and inorganically.”
Alternatives under the spotlight
Following the Altor acquisition, Prime is looking to capitalise further on the significant growth occurring in private markets and alternative assets.
“We love the alternative asset space and we think that there will be more and more allocations from clients that will go there,” Madder said.
“I see great upside from alternative assets when we look at Altor, whether it’s private credit or private equity. There’s really strong tailwinds and opportunities for the future.”
Private assets are continuing to see democratisation, with 34 per cent of global investors demonstrating interest in private investment opportunities as a service they want from their adviser, according to Natixis Investment Managers.
Research from Hamilton Lane also found that 70 per cent of advisers plan to raise clients’ allocations to the asset class. Performance and diversification were cited as the top drivers for the surge in demand for this investment area.
Moreover, Preqin recently reported that APAC is rapidly catching up with North America and Europe in its usage of private debt, which has caused assets under management to reach US$92.9 billion ($138 billion) – up from US$15.4 billion in 2014.
“We’re particularly strong around this alternative asset piece and that is where we’ve differentiated ourselves in the wealth segment,” Madder added.
The Altor deal will enable Prime to launch new products in the private markets space and pursue additional M&A deals to grow its funds under management, which stands at $1.2 billion.
AUTHOR
Jasmine Siljic
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