Hi AllHere are my notes:- Texas Teachers Fund is the one major...

Hi All

Here are my notes:
- Texas Teachers Fund is the one major client Banner Oak Capital Partners has and PAC management have met with them to mitigate any risks associated with them leaving Banner Oak. PAC management felt risk of FUM loss is mitigated through contract terms being for extended periods (up to 8 years).
- Deal came about through an Investment Banker PAC management knew. It was a closed tender and PAC felt concentration risk would scare off a number of parties. The deal was being worked on before GQG IPO had been realised.
- Paul mentioned there are high expectations of continued FUM growth through one client and mentioned they have a high level of sophistication in the way they invest.
- Earn out fee likely to be paid out in 2025. Preferred status payment to last for a few years (high probable earnings).
- Management fees are earned on FUM of approximately $US2B and range from 50 to 80 basis points (with minimal compression over the foreseeable future). The other $US3.7B is potentially debt.
- Why performance fees were excluded? Paul responded that performance fees are not certain to be received every year, therefore it is better to not pay for them. Deals get complicated when these are included and it is easier to reach a deal. PAC would factor in discount rates and excluding performance appears to make deal easier to make.
- Deal based on 6 times earnings with US tax rate expected to be in low 20's
- GQG cash fully utilised with this deal and expectation is that debt facility will be in place soon to make similar sized deals.

Anyone else have additional notes or want to correct any of the above?

There was a noticeable increase in institutions on the call - there were three at least (and Nick McGarrigle is back)

Best of Luck
Lost