PNI is a clear winner in a difficult asset management industry,...

PNI is a clear winner in a difficult asset management industry, where few companies can get net inflows. Since its creation more than 10 years ago, PNI had a regular growth of its FUM. Like a couple of other local managers, PNI had also a good resistance during Jan-March 2020 without any significant outflow. Historically, their growth has been driven by 4 elements : growth of the stock market, outperformance of their funds, net inflows and acquisitions. Thanks to these elements, they got an increase of 32 % for their FUM for H1 20. In January-March 2020, their AUM decreased by 15 % due the decrease of the Australian stock market. But it has already been largely discounted in their share price. PNI looks cheap at the moment, with a ratio market cap/AUM of 3.3 % (just by taking their share in the AUM of their affiliates) vs 10.7 % for Magellan. This is partly justified as Magellan is able to charge higher management fees and benefits from a better operating leverage. Going forward, I expect the difference between these 2 fund managers will decrease as PNI increases its margin thanks to a better customer mix and a higher operating leverage. It will mainly depend on PNI's ability to grow its AUM, where the company has a great track record. Of course, the main risk is another severe correction for the stock market.