By Pinnacle Investment Management, an Australian financial-services company, experienced a decline in its shares recently due to challenging business conditions impacting new business flows in the sector.
Share Performance
The shares of Pinnacle Investment Management dropped by 4.6% to AUD 9.30 (USD 6.16), reaching a low point of AUD 9.11. This decline places the company among the worst performers on the ASX 200.
Performance Fees
In fiscal year 2023, Pinnacle’s nine affiliates generated A$58 million in performance fees, with A$54.8 million earned in the second half of the year. Pinnacle’s share of these fees after tax amounted to approximately A$14.6 million, A$13.6 million of which was earned in the second half of the fiscal year.
Comparatively, fiscal year 2022 saw Pinnacle’s performance fees totaling A$57.8 million from 10 affiliates, and its net share after tax reached A$16.6 million.
Business Challenges
Pinnacle recognized that money managers, including itself, have encountered significant business challenges. Despite overall market improvements in the second half of the financial year, business conditions remained difficult and continued to impact new business flows, particularly in the retail sector. As a result, certain affiliates also experienced financial effects.
Market Impact
The selloff also affected other fund managers. Magellan Financial Group dropped by 4%, Platinum Asset Management lost 3.4%, and Australian Ethical Investments experienced a decline of 2.2%.
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