Hi PViews.I see management have certainly taken as much fat out...

Hi PViews.

I see management have certainly taken as much fat out of their structure to reduce costs.

I ran the numbers over EFG again....and in my mind, the key question is still around how are they going to grow AUM?

As you pointed out, cash at bank today equates to 7.56c per share. EBITDA will take a further step down with the loss of SunSuper at the end of this month, with AUM then reducing to $620m...this is not really enough AUM to make any real return for shareholders IMO.

I guess their plan is to establish a new fund, and market it to increase AUM. Without a new manadate of cornerstone investor, they have no choice but to use some of the cash balance...then give it some time to get some decent returns, then get the ratings houses to rate the fund, then start marketing it to financial planners.

The companies previous strategy involved friends of BNB, contributing large swags of cash...this is now history.
The route I outline requires a whole new marketing and distribution channel....and plenty of TIME. Unless they win some new manadates I cant see how they will continue being cash flow positive(depending on redemptions)...15 staff, drop in AUM...how much will they lose???? anyones guess.

I compare this business to HFA, and well, you know how I feel about that...so no need to go over old ground again.

The market is making a great recovery, and many that were priced for destruction have performed nicely.

Best of luck with your holding....but I'd still bet selling EFG today and buying into HFA, will still result in a far better return over the next 12 months.

Kiril.