Key Highlights

• Adjusted NPAT, which excludes the one-time accounting gain on Pacific Asset Management (PAM) and principal Investment gains and losses, was A$138.0 million, up 21% from A$114.2 million.

• International FUM was A$74.9 billion, up 45.6%, and retail FUM was A$50.7 billion, up 27.9%.

• Pinnacle's share of affiliates' NPAT was A$136.0 million, up 5% from A$129.7 million, and affiliate performance fees were A$35.6 million to Pinnacle from 12 affiliates, down from A$46.6 million.

• The final Dividend was 31.0 cents per share, 65% franked, bringing total FY26 dividends to 60.0 cents, 72% franked, unchanged from FY25, when the franking level was 79%.

How did a multi-boutique Fund Manager lift affiliate funds under management by more than a quarter in a single year? Pinnacle Investment Management Group (ASX:PNI) reported on 4 August 2026 that affiliates' funds under management (FUM) reached A$229.4 billion at 30 June 2026, up 27.9% from A$179.4 billion a year earlier, helped by net inflows of A$33.4 billion in FY26. Net profit after tax attributable to shareholders was A$176.7 million, up 31%, though part of that came from a one-off accounting gain.

The FY26 numbers

Reported NPAT was A$176.7 million against A$134.4 million. Adjusted NPAT, which excludes the one-time accounting gain on Pacific Asset Management (PAM) and principal investment gains and losses, was A$138.0 million, up 21% from A$114.2 million. Diluted EPS was 78.1 cents, up 25%, and adjusted diluted EPS was 61.0 cents, up 15%.

The gain came from Pinnacle reaching full ownership of PAM on 24 April 2026: a step-acquisition produced a non-cash accounting profit of A$46.2 million, net of transaction costs. PAM contributed A$6.5 million of profit from 24 April to 30 June. Principal investments recorded net losses of A$7.5 million, including interest costs, against net gains of A$20.2 million in FY25. Distinguishing reported from adjusted profit is essential here.

Flows and funds under management

International FUM was A$74.9 billion, up 45.6%, and retail FUM was A$50.7 billion, up 27.9%. Of FY26 net inflows, A$10.2 billion came from domestic retail and A$12.3 billion from international sources.

Five key affiliates, about 62% of FUM, grew encouragingly, led by Lifecycle, now the largest. This concentration is worth noting because a slowdown at one affiliate would affect group flows.

Why the result was described as messy

UBS called the result messy. The reasons cited included rising parent costs, performance fees paid to affiliates' staff, and a lower share of affiliate profit than of FUM. Pinnacle's share of affiliates' NPAT was A$136.0 million, up 5% from A$129.7 million, and affiliate performance fees were A$35.6 million to Pinnacle from 12 affiliates, down from A$46.6 million.

The dividend

The final dividend was 31.0 cents per share, 65% franked, bringing total FY26 dividends to 60.0 cents, 72% franked, unchanged from FY25, when the franking level was 79%. The dividend was flat even though adjusted EPS rose, and franking declined, which affects after-tax income for investors who value franking credits.

Strategy: PAM, AVI and affiliates

Canaccord, as cited by FNArena, expects a full year of PAM ownership to be the largest year-on-year profit driver in FY27. That Acquisition is by PAM, not directly by Pinnacle.

Pinnacle's model is to take Equity stakes in boutique managers and provide distribution, operations and capital, so growth comes from the success of those managers. Its competitors include other multi-affiliate groups and large fund managers. The model reduces key-person risk at the group level, but exposes Earnings to the performance fees of a handful of affiliates.

Quality of the profit mix

In FY26 the equity-accounted share of A$136.0 million is the core, recurring element, since it follows affiliates' fee income on FUM that has grown encouragingly. Principal investment gains and losses swing from year to year and can distort reported profit, which is why the loss of A$7.5 million this year against a gain of A$20.2 million last year matters when comparing results. The PAM step-acquisition gain of A$46.2 million is similarly non-recurring. Readers should focus on adjusted measures to understand the underlying trend, but should also remember that adjusted figures are company-defined and not audited in the same way.

Risks and what to monitor

Risks include market falls that reduce FUM and fees, flow reversals particularly in fast-growing affiliates, concentration in a few affiliates, Credit conditions affecting private credit managers such as Metrics, volatile performance fees, rising costs, regulatory change, and integration of PAM and AVI. Macquarie noted that 18 of 35 performance-fee-capable strategies were at high water mark, covering 67% of eligible FUM, which helps the fee outlook but depends on markets.

Developments to watch include quarterly or half-year FUM updates, the half-year result expected around February 2027 on the usual timetable though unconfirmed, the AVI completion, Metrics' earnings and Loan quality, the pace of flows into Lifecycle and international strategies, and any changes to dividend or franking. Readers should also review each affiliate's own disclosures where available, because Pinnacle's results depend on their fee income and costs, and should compare the company's FUM updates with market movements to judge how much of any change comes from flows rather than from investment returns. Investors can also track whether flows into Lifecycle slow as expected, since that would change the growth trajectory.