PNI : main reasons why it still looks interesting

PNI share price had a strong performance since the beginning of the year (+ 47 % since 31/12/20).
However, it still looks interesting given 2 main elements :
- strong net inflows (15.4 bn FYTD at the end of April 21),
- a level of risks/volatility which looks lower than most of the other asset managers.

YTD, PNI affiliated AUM has increased by 45 % to 85 bn.
This is mainly explained by organic growth (+ 26 %).
Also interesting to look at the details of these net inflows, driven by 3 elements :
- retail inflows are at record level (3.7 bn so far this year), coming from different affiliates (mainly from Hyperion, but also Coolabah, Firetrail, Metrics, Recap and Solaris during H1 FY 21)
- domestic instos inflows were also robust (some catch up effect vs last year),
- offshore instos begin also to be a significant part of their business (1.2 bn of net inflows for the period January-March 2021), while the company shows more and more confidence for this part of this business, where the potential is significant.

The level of risks/volatility also looks quite low.
First, it has been tested with the covid period and the company has experienced a limit level of outflow during that period.
More interesting is the diversification of the company which gives a real confidence that they can grow even when market conditions are tough :
- diversification of their assets (domestic equities, international equities, bonds, property)
- diversification of their strategies (ex.value and growth for equities)
- diversification of their customers (retail, domestic instos base which keeps increasing, international instos).
What's also a bit unique with this company in terms of risks : the low level of failure so far with their affiliates (16 affiliates now).
That is a major difference with other companies which tried the same business model.

As indicated in other posts, it is still difficult to see what's the limit to their growth.
That's a major point, as the share price of fund managers tend to reach a peak, when the market thinks that they have reached a peak in terms of net inflows, as we have seen it with Platinum.
Of course, in the short term, they depend on the growth of their respective markets (shares, bonds...).
But, in the medium term, PNI has still a significant potential to increase its AUM, thanks to 2 elements :
- its ability to attract good managers and participate to their growth at a very initial stage,
- its great distribution which enable it to increase the potential markets for their boutiques.

Main risks I can see :
- still dependant on the growth of their markets in the short term and the correlation of the different assets,
- the ability to make this business model work in the long term, which probably depends a lot on Ian Macoun (I mean that the loss of Ian would probably be a real problem, given that he has been the founder and had a remarkable track record so far with Pinnacle).