Has MFG Hit Bedrock ?, page-24

fundamentals. on face value, even id be tempted in the $7's. truly would. BUT
negatives:
- mkts heading south (had to eventually) - nvr good for any AM
- the continued fall implies the mkt knows something about the direction of flows, a few mandates pulled and heaven help you.
- BB will drain any excess funds you have left. Its been the single mechanism shielding the sp for years now. You only return excess ca$h when mngt have no idea how to earn a greater ROE on it, idiots shouldve bought fum or diversified elsewhere
- margins being squeezed as clients exit. 16% exp to rev is now >39% due to massive mngt fee fall from grace
- reputation is shattered
- funds do NOT overperform in any 1,3 or 5 year category (so how will they ever grow or be recommended?)
- high retail fees + underperformance = more retail outflow - who cares about insto, its almost worthless
- limited investment options/funds in attrition

positives
- $800m+ cash and investment will help cushion any further dramatic falls (terminal value)
- minor barra benefits, but fwd growth may be constrained. barely profitable but has potential
- Vinva?
- cash balance (depleting daily)
- NTA ~$5.17 p/s

expected outcome based on current FUM is probably tilted to the upside. Its all contingent on client flows and near term mkt (trump-onomics). further loss off major fum (particularly retail wehich continues at -$200m a month!) will cause further sp slide....but looks close to a "fair value" bottom in the absence of anything major - unfortunately Feb/Mar/April mkts will likely be.....