Listed investment managers, BT Investment Management (ASX:BTT) and Pacific Current Group (ASX:PAC), each provided positive updates to the market during April and moved higher accordingly.

Funds management businesses are highly leveraged to FUM flows and when managers are winning money, performance is solid and the markets they are investing in are moving in their favour, the earnings uptick can be considerable.

BT Investment Management announced mid-month that its quarterly FUM had grown by net A$4.2 billion (or around +4.8%). As if to illustrate the leverage inherent in its business, it pointed out the FUM won in the last quarter would lead to approximately $10m incremental annual revenue (at what will be next to zero incremental cost). 

Despite an extended period of underperformance, Pacific Current may finally be getting its act together with its long overdue corporate restructure (simplification) being implemented during April.

Growth boutique, GQG, a relatively new addition to the Pacific Current stable of fund managers, added +$3.7b of net inflow over the quarter taking its total FUM to $4.6b suggesting very strong momentum in the business.

Core boutique funds, Investors Mutual and Aperio, also reported strong inflows for the quarter.

The simplified corporate structure makes Pacific Current a much easier business to understand and the stock continues to look cheap at its current share price around $5.80, trading on a FY18 PE of 9.7x, with a yield of around 5%. 

For the OC Micro-Cap Fund, Pacific Current provided a bright spot during April after reporting its largest ever net inflow quarter, with a +$5.4b increase in FUM to $57.5b. (VIEW LINK)