Can GDG Sustain Momentum After Major Acquisitions and Rapid Expansion?
Generation Development Group (GDG) delivered a robust FY25 performance, marked by strategic acquisitions and a surge in funds under management, positioning itself as a dominant force in Australia's wealth management sector.
- FY25 underlying NPAT surged to $30.2 million
- Funds under management reached $34 billion combining investment bonds and managed accounts
- Completed full acquisition of Lonsec and acquired Evidentia Group
- Declared fully franked dividend of 2 cents per share
- Strategic alliance with BlackRock to enhance retirement income solutions
Strong Financial Momentum
Generation Development Group (GDG) has reported a strikingly strong set of financial results for the 2025 fiscal year, underscoring its rapid expansion and deepening market presence. The group’s underlying net profit after tax (NPAT) climbed to $30.2 million, a substantial increase from the previous year, reflecting both organic growth and the impact of recent acquisitions.
GDG’s funds under management (FUM) now stand at an impressive $34 billion, split between $4.4 billion in investment bonds and $29.6 billion in managed accounts. This growth is a testament to the company’s diversified portfolio and its ability to capture market share across multiple wealth management segments.
Strategic Acquisitions Bolster Market Position
A key driver of GDG’s expansion was the completion of two major acquisitions during FY25. In August 2024, GDG acquired the remaining shares of Lonsec, transitioning it from an associate to a wholly owned subsidiary. Lonsec, a leading provider of investment research and managed account solutions, contributed significantly to GDG’s revenue and earnings growth.
Further strengthening its managed accounts footprint, GDG acquired Evidentia Group in February 2025. Evidentia is recognised for its tailored managed account solutions and has rapidly grown its funds under management to $14.8 billion. The integration of these entities has positioned GDG as a formidable player in Australia’s wealth management landscape.
Innovative Products and Strategic Partnerships
GDG continues to lead with innovative offerings such as investment-linked lifetime annuities and tax-effective investment bonds, which have garnered strong market share and inflows. The company’s investment bond segment alone grew its funds under management by 33%, capturing 57% of annual market inflows.
Moreover, GDG’s strategic alliance with global asset manager BlackRock is a notable highlight. BlackRock’s minority stake investment and collaboration on holistic retirement solutions, including the LifeIncome product, signal a commitment to innovation and long-term growth. This partnership leverages BlackRock’s global expertise and technology platform, enhancing GDG’s competitive edge.
Outlook and Market Opportunities
Looking ahead, GDG is well-positioned to capitalise on structural shifts in the wealth management and retirement income sectors, supported by favourable regulatory tailwinds. The managed accounts sector, in particular, is expected to nearly double by 2030, offering substantial growth opportunities.
GDG’s disciplined approach to acquisitions and product development, combined with its capital-light business model, suggests a sustainable growth trajectory. The company’s focus on expanding research coverage and launching new initiatives through Lonsec Research further underpins its strategy to maintain market leadership.
Bottom Line?
GDG’s FY25 results and strategic moves set the stage for continued expansion, but integration of acquisitions and execution of new initiatives will be critical to sustaining momentum.
Questions in the middle?
- How will GDG integrate Evidentia and Lonsec to maximise synergies and cost efficiencies?
- What new products or distribution channels will emerge from the BlackRock alliance?
- How might upcoming regulatory changes impact GDG’s investment bond and annuity offerings?
