Australian Asset Managers: Some Rerated, Others Did Not; All Face the Same Headwinds

Average earnings for the seven asset managers under our coverage—Challenger, GQG, Insignia, Magellan, Perpetual, Pinnacle, and Platinum—will likely improve over the near term to fiscal 2025, but moderate thereafter. This is partly due to our expectations for continuing net outflows, on average. While potentially lower rates in fiscal 2025 could lead to a cyclical flow uplift, any benefits may be short-lived, as asset class rebalancing activity subsides. Given the cohort’s largely average peer-relative returns, we expect their FUM share losses to exchange-traded funds and industry funds to persist. Competitive pressures are also likely to weigh on fees and earnings.