How this listed fund manager plans to grow AUM to $15 billion in 5 years

Elanor Investors Group (ASX: ENN) has laid out ambitious plans to grow the firm's assets under management by 138% to $15 billion over the next five years. Elanor's interim results for FY24 showed a 111% increase in AUM from $3 billion to $6.3 billion since June 30 2023, resulting in a 37% increase in recurring funds management income.

Paul Siviour, Chief Operating Officer at Elanor, says the business is beginning to reap the scale benefits of growing assets under management on their existing operations.

"We've added $8 million of funds management income; that's all recurring income, and our costs have only increased by $1.5 million. So that's driven what we call operating leverage out of an ability to show the scalability of our platform," Siviour says.

Integrating the Challenger Real Estate funds management business and new institutional mandates, including a new agreement with the Abu Dhabi Investment Council (ADIC), is fuelling this growth.

Siviour says that the green shoots of investor appetite are emerging as the headwinds of a rapidly rising interest rate environment ease. Contrary to popular belief, he also believes that there is an appetite for office real estate, with the firm raising $110 million for a 'deep value' office opportunity in December last year.

"If you've got the right assets, in the right market that meets tenant demand, we're seeing the opportunity to improve market rents," Siviour says

In this reporting season C-Suite interview, Siviour outlines Elanor's five-year growth plan, shares his insights on the office and retail property sectors, and explains why Elanor is screening cheaply relative to other listed funds management firms.

This interview was taped on Wednesday 28 February 2024.

Timestamps

• 0:00 - Introduction
• 0:25 - Key points from the interim results
• 1:26 - Growth in recurring revenue due to operating leverage
• 2:09 - Results versus expectations
• 3:35 - The impact of higher rates and inflation
• 4:21 - A closer look at the Office and Retail sectors
• 7:13 - Future growth opportunities
• 8:59 - The five-year growth plan
• 10:07 - Valuation