PACIFIC CURRENT GROUP LIMITED (ASX:PAC) - Ann: Dividend/Distribution - PAC, page-20 - HotCopper | ASX Share Prices, Stock Market & Share Trading Forum

Originally posted by lost: ↑

Hi Porto

I think the investing public are looking for high growth stories in this space and PAC historically has not had these. They do now and market will realise eventually.

The reason I believe it will take a while is that other fund managers like Magellan are in the papers a lot here talking to journalists and communicating through podcasts to spruke their businesses. That is why they have PE Ratios in the high twenties. PAC has similar % growth in every ratio (DPS and EPS) as Australian Ethical (AEF), but AEF has close to 60 times PE Ratio, PAC has three times the FUM growth. When Magellan was growing fast they were out there telling everyone they were the fastest. They have been discounted by some institutional investors for that (see when they bought Airlie Funds Management, the Airlie business lost a few billion dollar mandate from some Industry Super Funds). As always teflon coated no business impact in the news, but it is one of many reasons why MFG's FUM growth is slowing. MFG's target market in Australia is maturing and they are reaching their market peak so are investigating other fund management products.

PAC doesn't go out to spruke itself and talk to journalists/podcast presenters (just commsec interview everytime a result is released). I read a good article in the AFR Monday where they interviewed IOOF's CEO (another CEO in the news). He mentioned that there will be a handful of large industry participants in Australia with over $500 Billion in FUM/FUMA and then there will be a few minnows. Fund Managers that focus on Australian market will have much tighter margins in the future and a company like PAC will be perfectly placed.

PAC's boutiques in the news here are predominantly Victory Park (funding Zip here and likely to in overseas expansion) and GQG is easily the fastest growing Global Fund Manager. If GQG was a listed company it would attract the same market capitalisation of MFG ($10B) by the end of this year when GQG exceeds MFG FUM. Do the math and PAC has a $500M asset value in one of its holdings, current market cap is $300M. Current share price and underlying value just doesn't make sense.

To add to the above, the markets PAC's botiques participate in are global (US, UK + Australia) and I can see the day when PAC aggregated FUM is well over $500 Billion, with a lot of this in higher margin boutiques. Carlisle could grow into a $15B-$20B FUM Fund Manager before it reaches market capacity. Victory Park and Proterra can grow into $80B FUM Fund Managers easily over the next 7-10 years. Similar company in Australian market only would struiggle to get to $8B FUM. The potential provides PAC a long runway to move to $300B FUM in that 7-10 year period.

Historically Mike F would take Insitutional Invetors to the football and deals would get done (there is only so many people he could take to the Grand Final so the larger clients won the seats - tongue in cheek). The PAC business has now changed to a sustainable model where performance and capability trumps network and spruiking, they have put a lot of detail into this years report and is available for everyone to read. Investors will find PAC when they want to invest in a high growth business that doesn't cost too much money. PAC has changed and it will take time.

Have seen some companies like SIQ take a couple of years before market realised its high growth capability, before then was a great time to accumulate. Similar was AfterPay, was low price for a couple of years before it really hit its straps once it showed growth (PAC isn't going to grow like APT has). PAC with continued high growth will eventually re-rate, it is inevitable.

Best of Luck
Lost

Expand

I think SIQ's rise was due to getting Macquarie Equities coverage, but when the Chairman is an old boy of the Macquarie network you would expect they would.
More broker coverage wouldn't hurt. They should see the $300M fund raising to buy other fund managers as a possible capital raising opportunity.
Best of Luck
Lost

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(20min delay)
Last $10.22		Change -0.050(0.49%)		Mkt cap ! $527.0M

Open	High	Low	Value	Volume
$10.30	$10.34	$10.18	$285.2K	27.82K


Last $10.22		Change -0.050 ( 0.68 %)
Open	High	Low	Volume
$10.30	$10.34	$10.18	4558
Last updated 15.59pm 28/05/2024 ?

Ann: Dividend/Distribution - PAC, page-20

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