Hi Barny Hopefully these accounts will demonstrate a return to...

Hi Barny

Hopefully these accounts will demonstrate a return to growth and good dividends for all. Was reading back at this link on the merger in 2014 from the AFR (needs to be opened in Chrome): http://www.copyright link/business/treasury-deal-born-in-london-pub-20140808-j75zy

It goes to show you with hindsight bias what could have been for TRG/PAC with the correct strategic decision. They were looking at buying PNI for under $160 Million in 2014 before the merger. PNI today valued at $770 Million, more than double PAC.

This is history, PNI growth demonstrates the potential of PAC's business. The model of buying boutique funds with specialist managers at start up definitely works, as we have seen with GQG in US. PNI have taken some fund boutique positions in Australia over the years and is flourishing as a result. With some capital PAC is placed to grow exponentially.

This will be an exciting year in the funds management industry across Australia. The Asia Region Fund Passport is set to go live toward the end of this year, enabling Australian Funds to sell products into South Korea, Thailand, Japan and NZ by streamlining regulatory requirements in countries. This is a good opportunity for smaller boutique funds to become bigger in size due to larger market size, Japan Institutional and Retail market is massive compared to Australia. Singapore is also sitting in the wings to join, pending how the first countries go. All we need is Hong Kong and China to join. For more information find consultant report here: https://www.pwc.com.au/industry/asset-management/assets/asia-region-funds-passport-nov10.pdf

There are competitive concerns like fee pressure, however this is likely to ensure PAC board is disciplined with what they do and ensure they do not over invest in fund businesses. Also likely to reduce the risk of what happened with Northern Lights Capital Group merger. If something like that occurred again the business will be decimated.

Fingers crossed for Wednesday announcement. Hopefully the market cap for the PAC business will be approximately $600 Million in the next year or two, approximately $12 per share. Believe this is a reasonable target based on:
1) Growth of FUM this year will continue at rapid pace
2) GQG growth with the FUM revenue coming through this year (expected to add $5 M to bottom line)
3) EAM FUM earnings we all forget about, should add $2 M to bottom line
4) IML sale, if we have a large tax bill, there should be a large capital gain (roughly $2 per share is sitting in a bank account for us)
5) Alphashares FUM in ETF's has doubled in the last year, particularly the CQQQ ETF. This should add an extra $1 M. FUM has increased from under $200 M to $4o0 M.
6) Reduced costs with the US Sales Team moving to GQG
7) Aperio growing strongly
8) Another business will be purchased adding to FUM growth

Best of Luck
Lost