Which asset manager has returned 143% over five years?
Shares in Pinnacle Investment Management have risen 143 per cent over the last five years to 19 December.
This triple-digit performance comes at a time when most of its rivals are experiencing losses over the long term. Over the same period, Platinum Asset Management has lost 71 per cent, Magellan has lost 55 per cent and Clime Investment Management has lost 27 per cent, for example.
Since the start of the year, the investment manager has returned 19 per cent, making it one of the best listed fund managers of the year, compared to returns by the ASX 200 of 8.4 per cent.
It also reported inflows of $200 million in the first quarter of FY2023–24 compared to outflows by other players, bringing retail funds under management to $23.5 billion as of 30 September 2023.
Pinnacle’s business model distributes funds run by its affiliate partners, which include Hyperion Asset Management, Firetrail Investments, Plato and Resolution Capital, and holds equity interest in them. The firm was founded by Ian Macoun in 2006, and now has 15 different affiliates.
Speaking at the firm’s annual general meeting in November, Macoun said: “Retail net inflows were resilient with notable inflows in private credit, private equity and fixed income. International momentum is continuing to build with positive net inflows, particularly in global emerging markets and global equities and ongoing growth of our internationally based affiliates.
“The Australian institutional market remains challenging with asset class rebalancing and fund consolidation presenting both an opportunity and a risk.”
In an analyst note from Morningstar, Pinnacle was said to have “bright prospects” for the future and flagged higher inflows to come.
“As an incubator, distributor and back-office services provider, its services are in demand from boutique managers who lack the infrastructure and capital to grow amid a highly competitive and regulated asset management landscape.
“A well-known brand and extensive diversification (across managers, asset classes and client cohorts) strengthen Pinnacle’s ability to attract and hold on to FUM across market cycles.
“We expect Pinnacle will experience net inflows averaging mid-single-digit rates of FUM over the five years to fiscal 2028. This is underpinned by the strong investment performance of its boutiques and comparatively lower fees, helping it to capture market share from other poorer-performing competitors when industry fund flows recover.
“A stabilisation of interest rates, possibly by the end of fiscal 2024, is also likely to revive investor appetite for risk assets and lead to new fund inflows.”
AUTHOR
Laura Dew
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