Australian Ethical sees outflows from Altius acquisition
Australian Ethical’s funds under management (FUM) grew by $3.5 billion during FY2024–25, an increase of 34 per cent, according to its full-year financial results.
The increase in FUM comprised $1.05 billion in investment performance, $593 million in organic net flows and $1.93 billion from the Altius acquisition. There were also negative outflows from Altius of $71 million which it attributed to fluctuating capital requirements and seasonality of Altius’ institutional clients.
Australian Ethical managing director, John McMurdo, said the firm had grown more than threefold over the past five years, from $4.05 billion in FUM at 30 June 2020 to nearly $14 billion now.
McMurdo said the strong growth in FUM also contributed to a 19 per cent increase in revenue and a 29 per cent increase in underlying profit after tax.
Australian Ethical generated an underlying profit after tax of $23.8 million for FY24–25.
Net profit after tax (NPAT) attributable to shareholders also saw significant growth, jumping to $19.9 million, a 68 per cent increase on the previous financial year.
“Momentum across our business over the last five years means we have grown more than threefold, from $4.05 billion FUM at 30 June 2020 to nearly $14 billion today, with underlying EPS growing at a 20 per cent compound average growth rate over this period,” McMurdo said.
The investment manager is forecasting a further uplift in profits and growth in funds under management, and said the increased superannuation guarantee rate and the focus on retention and engagement of the member base is expected to continue to drive further organic FUM growth.
“Australian Ethical sees potential for new revenue capture through the recent asset class expansion in private markets and fixed income, and future potential in international equities,” the investment manager said.
“The investment talent, product expansion, and systems that it continues to build sees it well placed to deliver, while further incremental fee reductions are expected to result in a modest decline in FY26 revenue margin.”
McMurdo said the completion of new superannuation and investment management operating platforms would unlock further growth across both business lines as they strengthen their member and investor experience and enhance market position.
“We are confident that we can continue to grow both organically and periodically inorganically and also deliver further operating leverage improvements over time,” he said.
“While we expect the market and economic volatility experienced in FY25 to continue, we are very well-positioned with our high-quality capability, long-term investment performance, strong balance sheet, enhanced business platform, brand trust, channel breadth, and our deep ethical pedigree.”
Recommended for you
“Challenging flow patterns” at J O Hambro Capital Management have led to $16.2 billion in asset management outflows for Perpetual in FY25, as its CEO admits the firm can gain new assets but then has problems retaining them.
Income Asset Management is set to launch two managed accounts of investment grade assets and syndicated loans in FY26, responding to adviser demand.
Pengana Capital Group has detailed the impact of its move into private credit, with chief executive Russel Pillemer describing plans to “become a force in the non-institutional market”.
Investment partnership firm Perennial Partners has entered a binding agreement to partner in the development of Ziller Funds Management led by former Maple-Brown Abbott deputy portfolio manager, Joseph Ziller.
