Pinnacle Investment Management reported a solid 13% increase in funds under management to $202.5 billion despite an 11% drop in half-year profit. The company declared a 29 cent interim dividend and advanced its international expansion with key acquisitions.
- Half-year profit down 11% to $67.3 million
- Funds under management grew 13% to $202.5 billion
- Interim dividend declared at 29 cents per share, 80% franked
- Affiliate revenues surged 85%, but performance fees declined
- Strategic acquisitions in Japan and UK completed or agreed
Profit and Dividend Highlights
Pinnacle Investment Management Group Limited has released its interim results for the half year ended 31 December 2025, revealing a mixed but largely positive performance. The company reported a profit attributable to shareholders of $67.3 million, down 11% from $75.7 million in the prior corresponding period. Earnings per share fell 18% to 30.4 cents basic, reflecting a more challenging earnings environment.
Despite the profit decline, Pinnacle declared an interim dividend of 29.0 cents per share, 80% franked. This represents a 12% decrease from the previous year’s interim dividend but a 7% increase on the final dividend paid in FY25, signalling the company’s commitment to returning value to shareholders amid ongoing market uncertainties.
Robust Growth in Funds Under Management
One of the standout metrics was the 13% growth in aggregate funds under management (FUM) across Pinnacle’s Affiliates, rising from $179.4 billion to $202.5 billion over the half year. This growth was fuelled by strong net inflows of $17.2 billion, with retail, international, and domestic institutional channels all contributing positively. Notably, the Australian retail market delivered record half-year inflows, underscoring Pinnacle’s strong distribution capabilities.
The company highlighted the rapid ascent of its Horizon 2 Affiliate, Life Cycle Investment Partners, based in London, which amassed nearly $30 billion in FUM within eighteen months of launch. This success story exemplifies Pinnacle’s scalable model that supports Affiliates with distribution and infrastructure, increasingly beyond Australian borders.
Revenue and Cost Dynamics
Aggregate Affiliate revenues, including performance fees, surged 85% compared to the prior period, or 128% excluding performance fees. However, performance fees themselves declined to $13.4 million from $36.4 million, largely due to lower contributions from certain Affiliates such as Hyperion, which had delivered exceptional fees in the prior period.
On the cost side, Pinnacle increased staff expenses by 22%, driven by headcount growth and remuneration adjustments to support future growth. The company emphasised its ongoing investment in talent as critical to sustaining its competitive edge and expanding its platform.
Principal Investments and Market Conditions
Principal investments returned $3.9 million before interest expense, down from $12.2 million previously. This reduction was influenced by unrealised losses on seed capital positions amid volatile market conditions. Pinnacle continues to hedge portions of its market exposure to manage risk.
Strategic Acquisitions Bolster Global Footprint
In a significant strategic move, Pinnacle completed the acquisition of a 5% stake in Advantage Partners, Japan’s largest independent multi-strategy private markets platform, for A$92 million. This investment enhances Pinnacle’s exposure to Japan’s sizeable pension and insurance markets and aligns with its international diversification goals.
Further expanding its global reach, Pinnacle agreed to acquire a majority interest (79.2%) in Pacific Asset Management LLP, a UK-based firm, for approximately A$418.8 million. The transaction will be funded from existing balance sheet capacity, leaving Pinnacle with around $110 million in remaining capacity for future initiatives.
Financial Position and Outlook
Pinnacle maintains a strong balance sheet with net assets of $933.9 million and full utilisation of its $100 million loan facility, which is deployed in liquid funds managed by Affiliates. The company comfortably meets all loan covenants, including an interest cover ratio of 31 times and a net leverage ratio of 0.23 times.
While Pinnacle remains optimistic about its growth prospects, it acknowledges the potential impact of macroeconomic and geopolitical uncertainties on investment markets. The company continues to invest deliberately in diversifying its business across multiple horizons to build resilience and capacity for future growth.
Bottom Line?
Pinnacle’s solid FUM growth and strategic acquisitions set the stage for expansion, but profit pressures and market volatility warrant close investor attention.
Questions in the middle?
- How will the integration of Pacific Asset Management LLP impact Pinnacle’s earnings and growth trajectory?
- Can Pinnacle sustain strong net inflows amid evolving market conditions and competitive pressures?
- What strategies will Pinnacle employ to offset the decline in performance fees going forward?