Ann: Institutional Inflow, page-27

I have assumed a a 10bp fee cut on existing FUM for FY18 which is smaller than recent years. My understanding is they are now getting closer to where they need to be so future cuts can be more incremental rather than the large chunk cuts of the last few years. For the recent insto mandate, I've assumed margins 50% lower.

I've also assumed FY18 ending FUM of $2675m for average FY18 FUM of $2450m. On that, I'm at revenue of $34.5m for FY18.

H2 17 expenses seem to have blown at far more than I expected based on recent guidance. I think total expenses excl tax for H2 17 may be in the order of 12.75m. For FY18 I'm working on $27.5m.

So EPS of around 445cps. PE at $115 approx 26. No value there in my view but still priced under PNI which has had comparable FUM growth for the year

I like to compare AEF with my favoured wealth play, FID. It's a financial planner that manages fund of funds. FUM grew 24% for F17 vs 37% for AEF but some of FID's growth was by acquisition where's AEF's is all organic. FID is trading at around 13x FY18 NPATA.

AEF deserves a high comparable rating for its organic FUM growth but FID has a much better handle on cost growth and is therefore growing earnings much faster.