L1 Group’s funds under management rose to $19.3 billion in the September quarter, marking a fourth consecutive quarter of net client inflows. Growth was strongest in Long Short strategies and Gold, although Platinum outflows continued and a new Global Long Short capital raising is still in progress.
- FUM rose 1.3% to $19.3 billion for the September quarter
- Underlying growth was 3.5% excluding a returned $400 million mandate
- Net client inflows continued for a fourth consecutive quarter
- L1 Gold Fund raised $375 million in September
- Platinum strategies recorded $173 million of net outflows
FUM climbs despite returned mandate
L1 Group Limited (ASX:L1G) ended September with $19.3 billion in funds under management, up 1.3% from $19.06 billion three months earlier. The increase came despite the return of an approximately $400 million Industry Fund mandate by the Catalyst Fund in July.
Excluding that mandate, L1 said FUM increased by 3.5% over the quarter. The company also said the returned mandate represented less than $1 million in annual management fees, limiting its stated revenue impact.
The result extends the sharp expansion reported in the previous quarter, when FUM reached $19.1 billion. The latest figure is also supported by positive investment performance, particularly across L1’s Long Short strategies and the L1 Gold Fund.
Gold and Long Short strategies lead flows
L1 recorded its fourth consecutive quarter of net client inflows. The September quarter benefited from a $375 million capital raising by L1 Gold Fund Limited (ASX:LGF), building on the fund’s earlier L1 Gold Fund IPO, which raised $950 million ahead of its ASX debut.
L1’s Long Short strategies recorded net client inflows in every month of the quarter. Their FUM rose to $9.33 billion from $8.87 billion at June, making the strategy group the largest contributor to the company’s reported asset base.
Platinum outflows narrow but remain a drag
Platinum strategies remained the weaker part of the portfolio, with net client outflows of $173 million. That was an improvement on the $308 million outflow recorded in the June quarter, but the direction remained negative.
The segment-level figures also reflect internal changes in how some mandates are reported. Two Platinum International strategy mandates worth $445 million were transferred to L1 International during the quarter, while $112 million from the PXC Advisors Dynamic Return Fund moved into L1 Affiliates.
Global Long Short raising adds next FUM catalyst
After quarter end, L1 Global Long Short Fund Limited (ASX:GLS) announced a capital raising of up to $483 million. Its retail entitlement offer is scheduled to close on 23 October, with quotation and normal trading of new shares expected to begin on 2 November, although the dates are indicative and may change.
That raising could provide another source of asset growth for the group, but the eventual proceeds and their effect on reported FUM are not yet known. The more immediate question is whether Platinum outflows continue to moderate while the Gold and Long Short franchises maintain their contribution.
Bottom Line?
The headline FUM number is encouraging, but the next update will show whether growth can broaden beyond Gold and Long Short strategies.
Questions in the middle?
- Will the Global Long Short entitlement offer reach its maximum size of $483 million?
- Can Platinum strategy outflows continue to narrow after falling from $308 million to $173 million?
- How much of future FUM growth will come from client inflows rather than market performance or capital raisings?