I am not a holder, but am following the story closely and have...

I am not a holder, but am following the story closely and have had a model running for the past 6 months to guide me on valuation.

I think there is an interesting crossroads coming up re share price / enterprise valuation. Assuming they complete the full buyback, I estimate that (after paying out FY23 profit via dividends), they will have circa $850m of assets (cash + equity interests) on the balance sheet. The annual returns on that portfolio is currently very low (about $8m?).

Then you have the actual funds business which, on my analysis of current FUM, is probably generating about $145m NPAT - but it continues to see FUM declines with an average loss of $2.5bn per month since July. As their core funds continue to underperform, I think there is every chance the total FUM could bottom out in the low $40b range, which I calculate would translate to a run-rate NPAT of circa $110m in the absence of significant cost reductions. Note I have factored in stable retail and institutional margins for the balance of FY23 - so that could be another revenue pressure point as the year unfolds.

So, the crossroads question.... If you look at a "sum of the parts" valuation and apply a multiple of, say, 8x to the funds business and then take the balance of assets, you end up with a theoretical share price that equates to where it currently sits. But at that share price, the business is trading at a forward PE of over 15x which is high for a beaten-up business. Unless they can get the $850m balance of assets working harder, there is every chance that the actual share price will not represent a "sum of the parts" but be more based on a (lower) PE pricing - say 11x = $7.30 share price.

How this plays out will be interesting, but at the moment I continue to sit and watch as I feel there is every chance that the share price can drift significantly lower yet. The "game changers" would be an earlier stabilisation of FUM losses followed by a couple of months of new inflows (and that will be all about reversing the underperformance of returns on FUM) or that they can start to demonstrate pathways that would see much higher earnings from their current portfolio of cash + equity holdings.