Strong flows boost BT Investment Management, Pacific Current

Robert Frost

OC Funds Management

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)


Robert Frost
Head of Investments
OC Funds Management

Robert was appointed Head of Investments in 2009 and has been a Portfolio Manager since joining OC Funds Management in 2001. Robert is also an Executive Director of parent company, Copia Investment Partners.

I would like to

Only to be used for sending genuine email enquiries to the Contributor. Livewire Markets Pty Ltd reserves its right to take any legal or other appropriate action in relation to misuse of this service.

Personal Information Collection Statement
Your personal information will be passed to the Contributor and/or its authorised service provider to assist the Contributor to contact you about your investment enquiry. They are required not to use your information for any other purpose. Our privacy policy explains how we store personal information and how you may access, correct or complain about the handling of personal information.