Hi All
Looking through various SEC announcements there has been some positive announcements in this final quarter, the increase in the markets and the reduction in the AUD/USD exchange rate should see some serious increase in FUM for the US business. With the news hopefully we have turned the corner, however there are some risks to keep in mind.
Following are in my opinion the good key points for Pacific Current in the last quarter: EAM Global Investors LLC
EAM Global Investors LLC announced on the 19/12/2016 via the SEC that they have successfully raised $USD103.45 Million via a capital raising from other Pooled Investment Funds. The minimum average investment allowable was $24.75 Million.
Link: https://friscofastball.com/2016/12/19/newest-form-d-filing-eam-emerging-markets-small-cap-fund-filing-derek-gaertner-submitted-dec-19-form-d/
This potentially increases FUM to $AUD654.28 Million from $AUD520 Million at the end of Sep 2016 Quarter. Aperio Group LLC
The increase of ownership in the business from December 2016 will increase revenue attributable from the beginning of 2017. These guys have had numerous reports of increasing stakes in companies in current holdings of 10% on average. Seizert Capital
There has been a steady flow of news in this fund from SEC. They have increased existing holdings by about 3% on average and this does not include their performance. Hopefully this indicates a change of direction for this fund. Some of the links as follows: https://www.com-unik.info/2016/12/22/seizert-capital-partners-llc-has-21657000-stake-in-goldman-sachs-group-inc-gs.html https://www.com-unik.info/2016/12/22/mckesson-corp-mck-shares-bought-by-seizert-capital-partners-llc.html https://www.thecerbatgem.com/2016/12/21/seizert-capital-partners-llc-has-2979000-position-in-northfield-bancorp-inc-nfbk.html https://www.com-unik.info/2016/12/21/chubb-corp-cb-shares-bought-by-seizert-capital-partners-llc.html GQG Partners
Goldman Sachs distribution agreement should see an increase in FUM rapidly for this business. Looking forward, hopefully they should have at least $250 Million in FUM by the end of next year. US exchange increases since the 1/10/16
With President Elect Trump almost in the white house, since he was announced the market has increased by 10.5% (since beginning November). Since the beginning of the quarter the Dow has increased by 9%.
If the US FUM increase in line with market we are looking at an additional $3 Billion boost. The AUD/USD Exchange Rate
The previously reported FUN Report was with AUD/USD exchange rate at 0.7674.
With AUD/USD exchange rate at approximately 0.72, the FX impact should be positive by approximately $3 Billion excluding increases in FUM.
Looking forward what other announcements are likely to be made in 2017:
Increase in GQG Partners percentage ownership from 8% to potentially up to 15% (this is hopeful)
Very good increase in FUM of at least 10% from the US business announced in January/February 2017. Estimated to be $3 Billion positive for FUM.
Further deterioration of the AUD/USD exchange rate, but should never forecast this as it is too difficult. Estimated to be $3 Billion positive for FUM.
If US market has truly turned around we should see a continuation of net Fund inflows. Last quarter was $AUD 1.46 Billion across all funds.
What good things do you guys see?
The biggest risk is further write-downs of investments in Funds. From @Tocqueville’s PR News stories looks like Nereus Capital is possibly going to be written off and there is still a risk of Seizert Capital going down the gurgler. The goodwill values are:
Nereus Capital - $5,259,498
Seizert Capital - $42,340,493
What other risks does everyone see for 2017?
Best of Luck
Lost
PAC Price at posting:
$4.20 Sentiment: Buy Disclosure: Held
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