Sum of the FUM - March 2019

Hi Everyone

Here is the breakup of PAC's FUM for the current boutiques:

	Core Boutiques					Growth Boutiques					Other Boutiques					TOTAL
1		AETHER	Carlisle Group	Seizert Capital	Victory Park		Blackcrane	ROC Partners	GQG	EAM		Alphashares	FIM	SCI	CAMG		Growth Rate
2	31/03/2019	$ 2,079,000,000.00	$ 2,364,000,000.00	$ 3,495,000,000.00	$ 3,820,000,000.00		$ 1,025,000,000.00	$ 6,528,000,000.00	$ 30,157,000,000.00	$ 1,306,000,000.00		$ 933,000,000.00	$ 546,000,000.00	$ 134,000,000.00	$ -	$ 52,387,000,000.00
3	PAC Ownership (%)	100.00%	16.00%	50.00%	24.90%		25.00%	17.60%	5.00%	18.75%		36.53%	30.89%	54.00%	20.00%
4	PAC FUM	$ 2,079,000,000.00	$ 378,240,000.00	$ 1,747,500,000.00	$ 951,180,000.00		$ 256,250,000.00	$ 1,148,928,000.00	$ 1,507,850,000.00	$ 244,875,000.00		$ 340,824,900.00	$ 168,659,400.00	$ 72,360,000.00	$ -	$ 8,895,667,300.00	5.67%
5	31/12/2018	$ 2,019,000,000.00	$ 2,021,000,000.00	$ 3,524,000,000.00	$ 3,939,000,000.00		$ 925,000,000.00	$ 6,382,000,000.00	$ 24,969,000,000.00	$ 1,064,000,000.00		$ 820,000,000.00	$ 517,000,000.00	$ 132,000,000.00	$ -	$ 46,312,000,000.00
6	PAC Ownership (%)	100.00%	16.00%	50.00%	24.90%		25.00%	17.60%	5.00%	18.75%		36.53%	30.89%	54.00%	20.00%
7	PAC FUM	$ 2,019,000,000.00	$ 323,360,000.00	$ 1,762,000,000.00	$ 980,811,000.00		$ 231,250,000.00	$ 1,123,232,000.00	$ 1,248,450,000.00	$ 199,500,000.00		$ 299,546,000.00	$ 159,701,300.00	$ 71,280,000.00	$ -	$ 8,418,130,300.00	7.77%

The true FUM growth rate based on PAC ownership is 5.67%, not the headline of all boutique FUM of 13%. This is due to the low ownership percentage of GQG Partners which is the main growth boutique.


How revenue in future years will be different to the past?
While the FUM levels have changed due to the sale of IML and Aperio, income generated in future years are much different. Despite investing in businesses with lower FUM, the level of revenue contributed to PAC is the same, if not greater and has a higher revenue growth profile to PAC than previous businesses. The acquisitions are revenue positive with cash spare to invest in pre-revenue businesses like CAMG and Independent Financial Partners Group LLC or there is enough to invest in one other mid sized boutique business (without debt).

Where the likes of Aperio with $38.5B FUM would generate circa $AUD7-8M in revenue for PAC, this business has been replaced by Carlisle which has anticipated revenue of $US6M ($AUD8.57M at 70 AUD/USD exchange rate). With PAC's investment, future years will increase Carlisle FUM from $US1.4B to over $US3B, which should in theory double revenue to $US12M ($AUD17.14M at 70 AUD/USD). The Aperio business would have to grow much quicker than Carlisle to keep pace to generate similar revenues.

It is a similar story for Victory Park replacing IML. The revenue generated by IML was approximately $AUD9.5M for PAC. Victory Park Capital is estimated to provide $US7M ($AUD10M at 70 AUD/USD exchange rate) and there was $AUD30M in difference between the two investment valuations. Being in the US market exposes Victory Park to a higher growth profile.

Best of Luck
Lost