One of the risks in this market is access to bank lending. The...

One of the risks in this market is access to bank lending. The company said it was close to a substantial facility a few months ago. It will need this to grow as it does not generate enough cash to reward shareholders, maintain the cost base and have capacity for investment. The facility has not been announced. This suggests there may be issues. The risk premium that banks will place on lending to fund managers in this market must be increasing and many may not even want exposure to this type of industry. I think shareholders may be tapped again for capital which at the current price will be a poor capital outcome.

The erosion of capital through ongoing impairments is highlighting a significant risk in acquiring goodwill. The level of cumulative impairments over the years may be as high as the value of the current market capitalisation of the company.