The 2 fund managers seeing 40% share price growth
Two active fund managers have outshone its rivals to report double-digit share price growth of more than 40 per cent for FY25, but another has lost more than 50 per cent.
Looking at the share price performance of six active asset managers over the year to 30 June, two reported an increase while four saw a share price decline.
Over the same period, the ASX 200 has returned 10 per cent.
The fund managers which saw the best performance were Australian Ethical which saw growth of 45 per cent, and Pinnacle Investment Management which returned 44 per cent.
The only other fund manager that reported positive performance was Magellan Financial Group which gained 1.6 per cent.
During the year, Australian Ethical completed the acquisition of Altius Asset Management which helped its funds under management grow to $13 billion and also benefitted from superannuation contributions.
Commenting to Money Management, Australian Ethical chief financial officer, Mark Simons, said: "Our strong share price growth over the past financial year is a reflection of consistent execution against our strategy aligning to the increase in our addressable market.
"We’ve also continued to invest in the quality of our platform, including the transition from Mercer to Grow Inc, NAB to State Street, and the successful onboarding of Charles River for our Fixed Income asset class. These transitions are underpinning improvements to our operating leverage."
At Pinnacle, the fund manager has been looking to expand its international capabilities and become more active with its overseas distribution in the UK and European market. It also acquired strategic interests in two international fund managers Pacific Asset Management and VSS for $142 million.
Share price performance of listed fund managers during FY25
On the other hand, the worst performance was seen by Platinum Asset Management which lost 55 per cent. The firm has seen a downturn in its funds under management and is now considering a deal with global long-short manager L1 Capital, which is currently going through due diligence.
A potential acquisition by Regal Partners fell through at the end of 2024 after Regal became concerned about the high volume of outflows.
It also saw the loss of two co-chief investment officers, Clay Smolinski and Andrew Clifford, with Clifford moving into a different role and Smolinski taking a six-month leave of absence from the firm.
Rounding out the pack, Pengana Capital Group lost 1.8 per cent, Perpetual lost 15 per cent, and GQG Partners lost 20 per cent.
Earlier this year, research by Morningstar said it expects traditional active asset managers will lose market share to ETF competitors. On average, active managers are expected to lose 3.1 per cent of their FUM per annum between FY25 and FY29, thanks to client redemptions.
However, those fund managers focused on specialist fixed income or private markets are likely to fare better as these are areas where it is harder for passive players to compete.
Morningstar equity analyst, Shaun Ler, said: “Among active managers, firms focused on conventional equity, fixed income, and multi-asset strategies remain at risk, given their replicability by passive vehicles. Conversely, firms specialising in less commoditised segments – such as private credit or specialised fixed income strategies – are better-positioned to grow.”
AUTHOR
Laura Dew
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