Funds management Listed funds managers have been belted over the past 12 months in a jittery market.
They face cyclical threats from a volatile equities market, fund underperformance and funds outflow. Magellan Financial Group and Platinum Asset Management have slumped.
There are structural threats as more capital deserts actively managed funds for ETFs, and fee pressure builds.
Pohl favours GQG Partners, a US-based asset manager that listed on ASX in October 2021 at $2 a share. It has US$104 billion in funds under management.
GQG has fallen to $1.58, even though it attracted another US$1.2 billion of funds in the June quarter.
“The biggest challenge today in funds management is getting funds through the door,” says Pohl.
“GQC clearly has an excellent distribution model and has been able to turn strong fund performance into consistent funds inflow and earnings growth.”
Pohl says GQG is another of his firm’s top-five holdings.
“GQG is a high-quality business and has an attractive valuation at the current price.
“The market is bearish on funds management stocks and GQG does not attract a lot of research coverage as it is not in any of the major indices and has only been listed a couple of years. That creates the opportunity.”
GQG trades on a forward P/E multiple of just under 10 times for FY24. The forward dividend yield is about 6 per cent.
The main risk is that underperformance in some GQG investment strategies over one year continues, prompting funds outflows
GQG Price at posting:
$1.65 Sentiment: Buy Disclosure: Held
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