Up 75% in 12 months. How much longer can this small cap stay under the radar?

A bit over 12 months ago, I spoke with the CEO of a little-known funds management business on the ASX. Since then, the stock has rallied more than 75% as investor awareness grows and management executes on its strategy.

The company is Navigator Global Investments (ASX: NGI), the only pure-play alternatives stock on the ASX, holding minority stakes in eleven mostly global investment managers. It’s a model that has drawn comparisons to Pinnacle Investment Partners after its rapid rise.

But success for ASX-listed fund managers is hardly guaranteed. This is an industry where earnings swing with markets and fund flows, and history is littered with firms that have ridden the highs and endured the lows.

Navigator’s CEO, Stephen Darke, joined in late 2023 and has been steadily re-engaging with local investors. His focus: growing funds under management and partnering with new alternative asset managers.

Navigator’s partners today oversee close to US$90 billion in assets, with Navigator’s ownership-adjusted share at around US$30 billion. Darke has told the market he plans to double earnings over the next five years to more than US$200 million by FY30.

UBS has a ‘buy’ rating on the stock and recently lifted its price target to $3.85 from $3.40, with NGI shares trading at $2.94.

I recently sat down with Darke to get an update on the business, the trends he’s seeing in alternative asset management, and his long-term ambitions for Navigator.

Bringing investors back to the Navigator story

One of Darke’s early priorities was cleaning up the balance sheet. Navigator raised equity in early 2024 to extinguish a large liability tied to strategic partner Blue Owl, a major point of uncertainty that overshadowed the investment case. 

He then set about simplifying the message. Navigator’s structure and underlying managers weren’t well understood by many investors. Improved disclosure, a clearer narrative and more detail on the portfolio have helped shift that.

“It was about simplifying the narrative and providing investors with more information to allow them to assess the stock.”

A critical point of difference for Navigator is the economics of alternative asset managers. In traditional long-only funds, management fees are lower and performance fees hinge on beating an index. Alternatives are different: they aim to deliver non-correlated returns, with hurdle rates usually tied to cash and performance fees typically higher.

At first glance, that runs against the broader trend of fee compression in asset management. But Darke says that pressure isn’t emerging in alternatives.

Crucially, Navigator’s share of performance fees is far less volatile than in traditional asset management. That stability and predictability is clearly resonating with investors.

Growth tailwinds

A major theme from the conversation is the rising global appetite for alternative assets. Demand is broad — wealth platforms, advisers, private banks, family offices and insurers are all increasing allocations.

“There is increased demand from retail investors, ultra-high-net-worth investors, family offices and wealth platforms for alternatives, and we are seeing it in the US and Europe as well.”

Several structural trends are driving this:

• Wealth platforms are broadening their available strategies.
• Insurers want return profiles that match long-dated liabilities.
• More companies are staying private for longer, creating demand for specialist capital.
• Hedge funds are back on the radar as volatility returns after years of strong equity markets.

Darke believes Navigator is well placed to benefit. Its model — the “flywheel” — is to take minority stakes in established managers with room to scale. Navigator provides growth capital, distribution support and access to Blue Owl’s business services platform, which offers help with succession planning, technology, procurement, data science and product development.

Navigator currently owns stakes in eleven managers and sees scope to grow to more than twenty over time. The company is actively assessing opportunities across Europe, Asia, private credit and real assets.

To fund this, the board has suspended the dividend, redirecting capital toward acquisitions. The plan is to complete one or two transactions a year using operating cash flow. 

“We have the opportunity to self-fund. Our model is built on organic growth, net inflows and performance that convert into cash flow, which we then reinvest into additional alternative firms. We believe this approach is the best way to create value for our shareholders.”

Navigator’s share price performance over the past year has put it on the radar of index-aware investors, with some brokers tipping ASX300 inclusion in early 2026. 

For Darke, index inclusion is a by-product of execution rather than a goal. His focus remains on attracting new alternative managers and supporting existing partners to grow their funds under management. It's a clear strategy and professional investors are buying into it.