GQG Partners has lost over US$1 billion from an institutional client, contributing to funds under management (FUM) falling by US$6 billion in July.
With US$1.4 billion in net outflows for July, it was the first month of 2025 that had experienced net outflows, with FUM falling from US$172.4 billion to US$166.6 billion.
The institutional outflows came from the firm’s global equity division which fell from US$41.1 billion to US$38.6 billion as a result of US$1.2 billion outflows, although FUM in all divisions fell overall.
Smaller outflows of US$100 million and US$500 million were reported from the emerging market division and US equities division, while its largest division – international equities – was the only sector in positive territory with inflows of US$500 million.
“GQG experienced net outflows of US$1.4 billion for the month of July, of which US$1 billion was attributable to a single institutional client.”
The firm noted these flows headwinds could persist as a result of underperformance from the funds’ defensive positioning. It is the firm’s belief that it would rather accept short-term higher benchmark-relative volatility, which will allow the fund to compound capital over the long term.
For example, its Global Equity Fund has lost 2.5 per cent over one year to 30 June compared to gains by the MSCI ACWI ex Tobacco Index benchmark of 18.1 per cent.
It said: “Sticking to our discipline, we are avoiding areas where we see extreme valuation and frothiness – in our view not dissimilar to the extremes of the dotcom era. As a result of this positioning, we continued to experience underperformance across all strategies as compared to their respective benchmarks year to date.
“We recognise that relative underperformance can be a headwind for future net flows and note, therefore, that the negative net flows experienced in July could persist.”
Year to date inflows were US$6.7 billion, with the majority of this concentrated in the firm’s international equity and US equities division, down from US$8 billion for the first half of 2025.
