Australian Ethical flags private markets expansion
Australian Ethical has reported a 50 per cent rise in statutory net profit after tax to $9.3 million in the first half of FY25.
In its six-month results to 31 December, the firm said statutory net profit after tax (NPAT) was $9.3 million, up 50 per cent from $6.3 million a year ago.
Total revenue rose from $48.4 million to $58.8 million, a rise of 21 per cent, which the firm said was driven by increased funds under management (FUM), positive net flows, positive investment performance, and the acquisition of Altius Asset Management in September 2024.
Funds under management (FUM) were $13.2 billion, up 27 per cent, and it recorded $0.27 billion in retail and wholesale net flows thanks to superannuation contributions and a new values-aligned channel. Superannuation made up the bulk of FUM at 68 per cent compared to 18 per cent in retail and wholesale managed funds.
Broken down by asset class, 34 per cent sat in Australian and New Zealand equities, 27 per cent sat in domestic fixed income, and 24 per cent sat in international equities.
However, the institutional channel saw $0.06 billion in outflows that the firm attributed to $58 million outflows from Australian Unity in lower margin fixed income funds. Australian Ethical also said flows had been impacted by the superannuation administration transition from Mercer to GROW Inc that took seven weeks.
“Pleasingly, Australian Ethical reported record superannuation guarantee contributions during the period which partially offset the impact of the limited service period,” it said.
It forecast continued organic growth in FUM in the medium term underpinned by expanded asset classes, new products, and the increase in superannuation guarantee contributions to 12 per cent. In addition, it plans to expand into private markets and international equities.
In October, the firm hired Adam Roberts as head of private markets to oversee its existing private markets portfolio which spans across private equity, infrastructure, real estate, private credit and venture capital, noting he will also explore additional private market product opportunities for wholesale and institutional clients.
“Our investment in capabilities and business platform enable us to further scale through inorganic opportunities,” it said in the results.
Earlier this week, ASIC released a major report into public and private markets and the implications for fund managers seeking to enter the space.
John McMurdo, CEO of Australian Ethical, said: “These are strong financial metrics that we can feel very proud of. Our growth has been underpinned by organic activity with strong results across our direct and values aligned channel as well as inorganic activity with the acquisition of Altius.
“From an operational perspective, the first half of FY25 has also seen the transitions from Mercer to GROW Inc for our super administration and from NAB to State Street for our custodian services to support the continued growth and cost efficiency of our business.
“I am excited about the period ahead of us. We are well positioned with a strong balance sheet, highly capable team, enhanced business platform, unique brand and deep ethical pedigree.”
The firm declared a dividend of 5¢ per share for the half year.
AUTHOR
Laura Dew
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