Pinnacle Investment Management Group said it remains confident that Metrics’ growth initiatives will accelerate further growth in assets under management and earnings, despite the substantial costs associated with the expansion activities.
Pinnacle provided an update on a number of its 18 affiliates as part of its full-year financial results, including Metrics.
The multi-affiliate investment management firm acknowledged that heavy investment in core and additional origination capabilities by Metrics has come at significant cost to the non-bank lender and had also weighed on Pinnacle’s net profit after tax.
However, Pinnacle founder and managing director Ian Macoun said Pinnacle remains fully supportive of Metrics’ growth plans given the additional growth opportunities they had created.
Metrics recently launched its consumer and business finance brand Navalo following the acquisition of Taurus Financial Group, BC Investment Group and Playright. It also intends to launch a direct origination platform which will offer investors an alternative source of financing.
The non-bank corporate lender also launched Metrics Business Finance to accelerate its move into lending for small and medium enterprises and small commercial property projects. It acquired Bigstone Finance to support the growth of its SME lending.
It is also in the process of developing asset-based lending trusts, which will soon be launched to investors.
Macoun said that Metrics had deliberately resourced ahead of the growth of each of these verticals, recognising the long-term value created for investors and stakeholders through developing deep origination and risk management expertise.
Macoun said while this had negatively impacted earnings in the short-term, it had delivered strong and consistent growth in assets under management and revenue and provides a platform for strong growth in earnings.
The expansion of these verticals means Metrics now has deep loan origination and asset management expertise across the full spectrum of asset-based financing, including commercial real estate loans, residential mortgages, auto loans, personal loans, equipment finance and debtor finance, he said.
“These are extremely large, addressable markets and will provide additional investment products for Metrics’ investors,” Macoun said.
The cost of the buildout of the asset-based financing platform and other ongoing growth initiatives for Metrics is expected to be around $16.4 million.
“We remind shareholders that this investment has been made in partnership with Metrics, demonstrating their ongoing commitment to growth and the strong degree of incentivisation and alignment to achieving those growth objectives,” Macoun said.
Pinnacle chief finance officer Dan Longan noted that some of the costs associated with the acquisitions by Metrics were one-off costs which won’t reoccur.
“The consolidation of the various platforms into a single platform will provide synergies and we expected a lot of that to happen throughout FY2026,” Longan said.
“The key earnings driver, though, will be the advent of asset-backed lending funds which will sit behind that origination capability and bring that capability into Metrics’ client channels. We think that’ll happen within this calendar year and earnings will then flow from that thereafter."
Pinnacle expects this part of the Metrics business to contribute positively to earnings and futures periods.
“Getting that origination in place was an important and major development but that’s just the beginning, we now need to do the work of raising funds based on those origination capabilities and that’s of course the agenda,” Macoun said.
Pinnacle executive director Andrew Chambers noted that the asset-based finance market already sits at around US$9 trillion and is only in its early pioneering stage.
Chambers said the fact that Metrics had built its own origination platform was a significant advantage, as the majority of participants work with originators but don’t actually own them.
“That will allow Metrics to control its own deal flow and credit quality and its deployment,” he said.
“We think that’s a real competitive edge in what’s going to become a huge market for allocation by institutional investors and wealth [managers].”
