Navigator Global Investments (ASX:NGI) executives highlighted strong first-half FY2025 financial performance, driven largely by higher performance fees at wholly owned subsidiary Lighthouse, while reiterating expectations that full-year earnings will exceed FY2024, subject to market conditions and the timing of cash distributions.
Portfolio scale and alternatives focus
CEO Stephen Darke said Navigator is “the only ASX company focused exclusively on partnering with leading alternative asset managers,” with 100% of revenue attributable to alternatives. The company provides growth capital and strategic engagement to 11 partner firms.
First-half FY2025 results: revenue up 28%, adjusted EBITDA up 16%
Management reported that ownership-adjusted AUM rose 3% during the half to $27.1 billion (an 11% increase in local currency). That increase helped lift first-half revenue 28% to $92.3 million. Group adjusted EBITDA for the half was $41.4 million, up 16% from the prior corresponding period.
Darke and CFO Amber Stoney said the key driver of the revenue and EBITDA improvement was Lighthouse, supported by strong 2024 investment performance and a material increase in performance fees. Stoney said first-half adjusted EBITDA was about $41.1 million and noted that Lighthouse delivered $31.7 million of performance fee revenue in the half, up $25.4 million on the prior comparative period.
Revenue mix, performance fees, and fee rates
Executives emphasized both management fee growth and the portfolio’s ability to generate performance fees across market cycles. Darke said 2024 produced a 30% increase in “underlying revenues” from the prior year, with record underlying management and performance fee revenues. He added Navigator is not seeing fee compression in average management or performance fee rates.
On Lighthouse, Stoney said the business’ average management fee rate remained steady at 54 basis points. She also outlined the performance fee “set-up,” noting:
- 22% of Lighthouse AUM is able to earn performance fees.
- 95% of that performance-fee-eligible AUM is at or above high watermark.
- The average performance fee rate is 12%.
In Q&A, Stoney said Lighthouse’s Mission Crest product has a “performance fee only” structure (no base fee), while North Rock’s performance fee is the higher of 50 basis points or the performance fee. She attributed the increase in performance-fee-eligible AUM partly to the growth of North Rock and the launch of Mission Crest.
On the NGI Strategic portfolio, Darke said the firms’ aggregated metrics show an average performance fee rate of 17%, with about 79% of AUM able to earn performance fees. Stoney also said partner firms generally distribute approximately 90% to 95% of profits.
Segment performance, distributions timing, and valuation movements
The company reported a significant first-half step-up in Lighthouse profitability. Darke said Lighthouse contributed $26.4 million to adjusted EBITDA, up 74% year over year. NGI Strategic Investments contributed $14.7 million to adjusted EBITDA, which management attributed to the timing of distributions rather than underlying business performance.
Stoney said NGI Strategic’s first-half result was 25% below the prior period largely due to distribution timing and because the prior period included carried interest from one private markets firm, which she said is expected “on a roughly biennial basis.” She added that adjusted EBITDA margins in NGI Strategic remained strong, with adjusted EBITDA representing 92% of revenue in the half.
Management also discussed balance-sheet and valuation impacts. Stoney said the period benefited from fair value gains on partner-firm investments as AUM increased and market multiples improved. She said partner-firm values increased by AUD 68 million for the period based on valuation ranges from an external valuer, with AUD 44 million recognized in the P&L. She reiterated that management focuses on adjusted EBITDA as a cash-focused profitability measure.
After the 31 December reporting date, Darke said Navigator received “over $10 million” of additional distributions not included in the half-year numbers. Stoney later added that as of the call date, the company had received AUD 27.1 million of distributions year-to-date for FY2025.
Outlook: higher FY2025 earnings expected; acquisitions targeted
Darke said management expects “higher net inflows” across NGI’s firms in 2025, citing strong 2024 performance, recent and prospective product launches, positive allocator sentiment, and an improving fundraising environment. He also referenced a “recent Goldman survey” indicating strong support for hedge fund allocations and improved fundraising conditions in 2025.
Management reiterated that FY2025 earnings are expected to be higher than FY2024, while noting that revenue receipts—particularly in NGI Strategic—depend on the timing of cash distributions and market conditions.
On capital deployment, Stoney said the company maintains a strong balance sheet, supported by operating cash generation and an AUD 100 million credit facility with four years to maturity. She said new partner-firm investments are expected to be funded from existing cash flow and debt sources.
Darke said management is pursuing “measured acquisitive growth,” targeting 1–2 new partner firm investments per year that meet NGI’s criteria and can contribute earnings in the near term while adding diversification and scale.
In Q&A, CIO Ross Zachary said the pipeline remains active but competitive, with current focus areas including specialized private equity and private credit. He also described two recent opportunities NGI did not pursue: one due to price and another where the target addressed its objectives without selling equity. Zachary said the company remains optimistic about its private markets investments, noting Marble at $3 billion AUM and Invictus at $4 billion AUM, and said both are entering another fundraising cycle.
Executives also addressed media reports about Lighthouse and Fortress. Darke said the Bloomberg reporting used “merger” language that he viewed as misleading, and described the initiative as a potential joint venture tied to a new multi-manager product targeted for later in the year. He said the initiative was not yet documented and it was too early to determine its success or financial impact.
About Navigator Global Investments (ASX:NGI)
HFA Holdings Limited operates as a fund management company in Australia. The company, through its subsidiaries, offers open-ended products and structured products to retail, wholesale, and institutional investors. HFA Holdings is based in Sydney, Australia.
