Pinnacle looks to UK for flows amid newest affiliate
Pinnacle managing director Ian Macoun has shared an update on its new UK affiliate as he flags international affiliates are a key leader of growth.
It was announced in May that the firm planned to launch a new affiliate with a team who formerly worked together at Royal London Asset Management (RLAM). UK-based RLAM has £169.3 billion ($331 billion) in assets under management.
In its full-year results, Pinnacle said the new affiliate will be called Life Cycle Investment Partners and have an initial investment team of seven staff.
This will be led by Peter Rutter, RLAM’s former head of equities, and other RLAM colleagues who are expected to join the firm include portfolio managers Chris Parr, Will Kenney, James Clarke and Niko de Walden.
Pinnacle will own 25 per cent of the firm and said its existing operational infrastructure significantly reduces the time for Life Cycle to come to market. It also intends to add further distribution resources in due course.
The investment thesis of Life Cycle will be style-neutral, long-only global equities.
“It is early days, these employees have employment restraints that they have to honour so we won’t see much activity in this calendar year. It takes time to build a new boutique and we build carefully and deliberately,” Macoun said.
“This should be a very big, successful boutique over time and we will do it at the pace that makes sense for building a quality affiliate. We will update in due course, but we tend to go slowly and carefully at the beginning.”
This is Pinnacle’s third offshore affiliate and its second in the UK. It already has Aikya, an emerging markets firm in the UK, and Langdon Equity Partners, a smaller companies manager based in Toronto, Canada. Aikya was launched in 2020 with an emerging markets team that formerly worked at Stewart Investors, while Langdon was launched in 2021.
Macoun added that Pinnacle planned to expand its presence in the UK, in the wholesale and retail market, and expand its distribution team in the country.
Offshore growth
Macoun flagged international investors had underpinned net flows, with net flows from international investors representing 70 per cent of total net flows in FY24 at $7 billion. This mostly came from the UK, North America, Europe and Japan.
The firm now has $35 billion in funds under management (FUM) in international asset classes with “significant growth momentum”.
International FUM for Pinnacle stood at $18.4 billion as of 30 June 2024, and said it saw an increase of 77 per cent in FUM during the year. This comprised net inflows of $7 billion and increases due to market movement and investment performance of $1 billion.
Total FUM was $110.1 billion, up from $91.9 per cent at the end of June 2023. This comprised net inflows of $9.9 billion and increases due to market movement and investment performance of $8.3 billion.
“We have been deliberately investing in our international distribution capability and internationally relevant product development over the past 10 years. [This is] now delivering meaningful flow success, $7 billion or 70 per cent of net inflows in FY24 was from international investors," it said in its financial results.
“Certain Australian share classes are also attractive to international investors, for example, private credit, private equity, infrastructure and real assets.”
As well as the Life Cycle affiliate, the firm has said it is “actively pursuing” international opportunities and the ability to export its Pinnacle business model overseas, and will be increasing its distribution capabilities overseas, especially in the UK.
Andrew Chambers, head of institutional and international divisions, said: “Aikya, Coolabah Capital, Metrics and Antipodes all have people on the ground [in the UK]. Having people on the ground to front investors who are in the same timezone is very powerful. UK-based investors have been investing with Australian-based firms for a long period of time and they are very comfortable with that, but it’s also about the fit.
“Managers such as Aikya have historically had a larger presence in UK wholesale/retail when they were working at First Sentier or Stewart Investors as it was so we have been able to leverage the reputation there in the private wealth channels in UK and Europe.
“We like wholesale/retail as it has higher fees than institutional so as we put the foot down internationally, we are a leading distributor in Australia so the technology that we have in Australia such as CRM can be added into the UK to keep growing.”
AUTHOR
Laura Dew
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