InvestSMART brings $16 million Intelligent Investor sale to the brink

Intelligent Investor sale moves toward shareholder vote

InvestSMART Group Limited (ASX:INV) is preparing to put its proposed sale of Intelligent Investor to shareholders, with the company expecting to sign a formal agreement with Teaminvest Private Group Limited (ASX:TIP) before the 30 November annual general meeting. The transaction has a headline cash consideration of $16.0 million, payable in full at completion, but the final amount will be reduced by subscription revenue received in advance and adjusted for working capital, net debt, funds under management, subscription revenue and costs.

The advance subscription deduction is currently estimated at approximately $2.5 million. The three adjustments linked to funds under management, subscription revenue and costs are capped at $1.0 million in aggregate, with either party able to terminate if the relevant amount exceeds that threshold. Completion is expected in the first quarter of 2027 and remains conditional on shareholder approval and other conditions precedent. The proposed transaction was first announced in the May Intelligent Investor sale, which included the publication businesses and management rights to four ASX-listed active ETFs.

Revenue holds up as operating loss widens

InvestSMART’s quarterly operating income rose 1% from the June quarter to $2.468 million. Insurance commissions provided the clearest lift, increasing 18% to $281,310 as policy renewals fell into the period, while subscription income was broadly flat at $1.172 million. Subscription average revenue per user rose to $702 from $686, partly offsetting a decline in subscribers to 6,664 from 6,742.

That revenue growth was not enough to cover costs. Operating expenses increased 4% to $2.635 million, producing an operating loss of $167,477 compared with $86,764 in the previous quarter. InvestSMART said the September result included higher employment costs from the payment of FY26 staff bonuses. The figures are management-prepared and unaudited, and the operating result excludes interest income and non-recurring corporate legal and transaction costs.

Funds under management retreat across both platforms

Total funds under management stood at $734 million at 30 September, down from $753 million three months earlier. The Professionally Managed Accounts platform accounted for $469 million, compared with $479 million at the end of June, while Intelligent Investor’s four active ETFs fell to $266 million from $274 million after net outflows and weaker returns in September. ETF funds under management had recovered to approximately $274 million by 26 October, according to the update.

The movement matters because InvestSMART identifies growth in PMA and active-fund FUM as its primary focus. The earlier FY26 loss and sale plan reported FUM of $753 million at June, meaning the latest quarter has given back some of that position while the company prepares to separate the Intelligent Investor business.

WealthBuilder replaces Fundlater for smaller investors

InvestSMART launched WealthBuilder during the quarter, lowering the minimum PMA investment to $1,000. The board has also decided to close Fundlater to new loans, with the company saying that moving small-balance investors onto a single product should simplify operations. InvestSMART invested $650,000 in August in the Eureka Asset-Backed Loan Fund to facilitate the buy-out of its remaining loans, which are expected to be paid over the next 18 months.

Cash at bank declined to $6.86 million from $7.78 million, principally because of staff bonus payments and the Fundlater-related investment. Against that backdrop, the next material tests are whether shareholders approve the transaction, what consideration remains after completion adjustments, and whether WealthBuilder can grow the platform without adding another layer of operating cost.