The ‘sunrise’ opportunity identified by GQG Partners

26 August 2024
| By Laura Dew |
image
image
expand image

GQG Partners has identified how private credit is a “sunrise” part of the asset management industry as it sets up its own private credit solutions business.

It was announced in March that the firm would be acquiring minority interests in Avante Capital Partners, Proterra Investment Partners, and Cordillera Investment Partners for an aggregate cash consideration of US$71.2 million from Pacific Current Group.

These form the foundational investment in the firm’s new GQG Private Capital Solutions (PCS) division and operate separately from its global equities business.

The acquisition was completed in May and saw PAC chief executive Paul Greenwood move over to GQG to work alongside GQG managing director Mike Daley to co-lead the PCS business and investment team. 

On a shareholder call for its FY24 results, chief executive Tim Carver shared details on why private markets are attractive for the business to invest in.

“We are always looking for what we call the ‘sunrise’ parts of the market. Where within the asset management industry are we seeing growth? Where are seeing talent flow to and where do we want to position our own business?

“Private markets clearly embody this and in doing the transaction with PAC, we were able to bring on board not only three great investment boutiques but also a team that we know quite well and has one of the longest tenures and deepest track record in the industry. 

“We also know that our distribution infrastructure that we invest in can be leveraged to distribute high quality products to our current investors and future potential investors will find value added in their portfolios.”

Investment managers in closed-ended vehicles can provide relatively predictable, contractual management fees versus open-ended equivalents, and asset managers in the space typically have capital-light business models which result in high profit margins at scale, he said. 

Those established asset managers also generate profits with minimal reinvestment requirements, offering an opportunity for high cash yield.

Carver added that GQG’s differentiation with the acquisition is that it is able to “catalyse growth” of its boutique interests with its existing institutional and retail distribution platform.
 

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

GG

So shareholders lose a dividend plus have seen the erosion of value. Qantas decides to clawback remuneration from Alan ...

2 months 1 week ago
Denise Baker

This is why I left my last position. There was no interest in giving the client quality time, it was all about bumping ...

2 months 2 weeks ago
gonski

So the Hayne Royal Commission has left us with this. What a sad day for the financial planning industry. Clearly most ...

2 months 2 weeks ago

A Sydney-based financial adviser has been banned from providing financial services in the interest of consumer protection after failing to act on conduct concerns. ...

3 weeks 6 days ago

Insignia Financial has made four appointments, including three who have joined from TAL, to lead strategy and innovation in its retirement solutions for the MLC brand....

1 day 9 hours ago

ASIC has cancelled the AFSL of a $250 million Sydney fund manager, one of two AFSL cancellations announced by the corporate regulator....

3 weeks 4 days ago