MAI is a pure administrator of unitised wholesale funds operating on very slim margins. It seems Linear had embraced the concept of administering funds for a set small fee rather than an asset percentage fee, for a big chunk of their FUA, which of course dragged PAS into continuing losses for years after listing, as it started the model.
The key for MGP is to increase its managed accounts business by capturing more lucrative clients, such as Shaw Stockbroking. Both the Linear and MGP arms have some of these type of clients, but Hub has stole the show since 2013. However Hub has never solved options processing. Linear, via IRESS, sort of had a solution, and while international trading is now normal, I don’t think anyone caters for option writing over existing and managed account portfolios. But I think MGP might be working on that, as there is a hint of it in their reporting.
Obviously someone is currently selling a few, and with no real buying around, the share price is drifting lower. To my mind, it looks a better risk than Hub for relative MC, but MAI would not be (and is not) on my watchlist.
MGP Price at posting:
20.5¢ Sentiment: Buy Disclosure: Held
