Ann: Australian Investment - Judgment, page-20

That is helpful and a generally well-written piece; unfortunately, the valuation is nonsensical. The issue is that the majority of IMF's earnings are carry/performance fees, whereas the behemoth fund managers to which IMF is compared (on p41 of the presentation) derive the majority of their revenues from base fees. Base fees are longer duration and lower volatility, ergo from a first principles standpoint are necessarily valued at a much lower discount rate (i.e. higher earnings multiple) than carry/performance fees.