Market movements in FY22 drove the fall in funds under management.
Pinnacle has reported a 6 per cent decline in aggregate affiliates’ funds under management (FUM) to $89.4 billion in its results for the financial year ending 30 June.
While the firm recorded net inflows of $600 million over the period, this was offset by a decrease of $6.2 billion attributed to market movements and investment performance.
Retail FUM was up by 4 per cent with net inflows of $3.6 billion and decreases due to market movements of $2.8 billion.
“Following the record retail inflows in the first half of the 2022 financial year, net inflows for the second half fell below our expectations as we confronted difficult market conditions and industry-wide pressures,” said Pinnacle MD Ian Macoun.
“We have continued to invest in our distribution capabilities, particularly retail and offshore, to ensure that we are well positioned to continue to grow and broaden our market share.”
The firm noted that its gross FUM had grown at a CAGR of 23.7 per cent over the past ten years and 25.8 per cent over the last five years.
Net profit after tax of $76.4 million was reported, up 14 per cent on the previous financial year.
Pinnacle also posted an 8 per cent increase in diluted earnings per share of 39.5 cents and a 22 per cent uptick in total fully franked dividends to 35 cents, including a final dividend per share of 17.5 cents.
“Whilst these growth rates are not as high as anticipated earlier in the year, they were unquestionably affected by the market context of current geopolitical tension, war, elevated inflation and sharply rising interest rates,” said Pinnacle chair Alan Watson.
“Nevertheless, we plan to continue our strategy of further increasing the diversity of asset classes under management, and the diversity of sources of funds under management (particularly international) and retaining a healthy percentage of funds under management exposed to performance fees, thereby further increasing both the resilience and growth potential of Pinnacle.”
Pinnacle’s share of affiliates’ NPAT was $75.7 million, an increase of 14 per cent on the last financial year, including performance fees from affiliates of $16.6 million.
“The aggregate performance fee revenue amount was moderated as none of our ‘large performance fee FUM’ strategies, other than Palisade, produced performance fees this year. We look forward to contributions from those strategies in future years,” Mr Macoun said.
Resolution Capital ranked as Pinnacle’s biggest affiliate by FUM as of 30 June ($18.3 billion), followed by Hyperion ($12.4 billion), Plato ($12.1 billion), Metrics ($11.9 billion) and Antipodes ($11.0 billion).
Jon Bragg is a journalist for Momentum Media's Investor Daily, nestegg and ifa. He enjoys writing about a wide variety of financial topics and issues and exploring the many implications they have on all aspects of life.
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