IOOF Holdings Limited

IFL Details
 
Acquisition of the ANZ businesses has strengthened IFL’s position: IOOF Holdings Limited (ASX: IFL) in FY 17 had delivered the exceptional organic growth due to 156% growth in the net inflows to $4.6 billion and an underlying profit of $169.4 million. Moreover, IFL had raised $539m through the Placement and SPP, to partially fund the acquisition of ANZ’s OnePath Pensions and Investments business and Aligned Dealer Groups business. The acquisition of the ANZ businesses has strengthened IFL’s position to be Australia’s leading specialist advice led wealth manager. Meanwhile, IFL stock, which rose 2.3% on November 28, 2017, is trading at a slightly high level. Based on the foregoing, we give a “Hold” recommendation on the stock at the current price of $11.17



IFL Daily Chart (Source: Thomson Reuters)
 

Magellan Financial Group Ltd

MFG Details
 
Significant increase of FUM in October:Magellan Financial Group Ltd (ASX: MFG) in October had net inflows of $1,825 million. This reflected the net retail inflows into Global Equities strategies of $1,568 million, net retail inflows into Infrastructure Equities of $39 million, and net institutional inflows of $218 million. The funds under management (FUM) are of $56.03 billion as at October 31, 2017. This is a significant increase compared to FUM of $42.2 billion as at October 31, 2016 and $51.5 billion as at the end of September 2017. The company is thus expected to post a healthy underlying profit growth for the six-month period ending December 31, 2017.
 

FUM as at October 31, 2017 (Source: Company Reports)
 
Meanwhile, MFG stock has risen 4.38% in last three months as on November 27, 2017. The group’s dividend policy for the underlying funds management business component is the payout between 75%-80% of the after-tax profit, excluding performance fees. Given the on-going momentum, we put a “Buy” recommendation on the stock at the current price of $25.65



MFG Daily Chart (Source: Thomson Reuters)
 

BT Investment Management Ltd

BTT Details
 
JOHCM under investigation:BT Investment Management Ltd (ASX: BTT) in FY17 posted 11% growth in the Cash NPAT to $173.1 million, at the back of higher average FUM, driven by strong net inflows and higher markets on average over the course of the year. The average FUM increased by 13% to $90.4 billion due to the strong global markets, with the average level of the MSCI All Countries World Index in local currency terms surging up 13%, and the average level of the S&P/ASX 300 Index surging by 9%. The Performance fees for FY17 were 51% lower to $37.9 million. The total cash operating expenses fell 5% to $281.9 million primarily due to a decrease in employee expenses linked to lower performance fee revenue. The closing FUM was $95.8 billion as at September 30, 2017, which is up $11.8 billion from $84.0 billion of last year. On the other hand, BTT is in preparation of new regulations scheduled to take effect in the coming year. This includes the reforms to the European Union’s Market in Financial Instruments Directive (known as MiFID II) that will come into effect in January 2018. In preparedness for the new MiFID II regulations, JOHCM will absorb the cost of all external research. Further, in the UK, after the industry thematic review, JOHCM is the subject of an investigation from its regulator relating to the eligibility of certain services approximating $8.6 million paid for out of dealing commissions between 2006 and 2016. There is a possibility that as part of the investigation the eligibility of other services may also get assessed. The likely outcome or consequence of this matter (including any sanctions or penalties) cannot be estimated at this time. 


FY 17 Financial Performance (Source: Company Reports)
 
Meanwhile, BTT stock is trading at a high level. As of now and given some level of uncertainty, we put an “Expensive” recommendation on the stock at the current price of $10.89



BTT Daily Chart (Source: Thomson Reuters)
 

Platinum Asset Management Limited

PTM Details

Average FUM declined by 9.6% in FY17:Platinum Asset (Investment) Management Limited’s (ASX: PTM) FUM at the end of October increased 17% to $26.5 billion, from 30 June 2017, due to the better investment returns and positive inflows in the first four months of FY18. However, PTM does not provide earnings forecasts because of the uncertainty of net fund flows and equity market performance. In FY17, PTM has posted 7.5% fall in the fee revenue to $312.5 million majorly due to an average FUM declining by 9.6%. The profit after tax also fell 3.6% to $192.6 million. On the other hand, PTM had launched two new ASX quoted managed funds in September 2017 and had launched one new website. Meanwhile, PTM stock has risen 72% in last six months as on November 27, 2017 and is trading at a high level given the ongoing challenges. We give an “Expensive” recommendation on the stock at the current price of $7.52



PTM Daily Chart (Source: Thomson Reuters)

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