GQG Partners (ASX:GQG) executives used the company’s 2025 full-year earnings call to emphasize what they described as a resilient business model and diversified strategy set, even as some flagship strategies lagged broader equity benchmarks during a market environment dominated by cyclical and AI-related leadership.
Funds under management rose despite net outflows
CEO Tim Carver said the firm ended 2025 with about $164 billion in funds under management (FUM), up just over 7% from the prior year. Carver added that, based on internal unaudited figures through the close of U.S. markets the prior day, FUM was around $172 billion, near the record level the firm reached in June 2025.
Management framed positioning as an intentional shift away from late-cycle AI exposure
Chairman and CIO Rajiv Jain described 2025 as a “fascinating year” in markets and geopolitics and said the past two years saw a clear shift toward cyclicals and AI-driven themes. Jain said GQG had meaningful exposure to those areas but began reducing it in the second half of 2024 and “very aggressively” in the first quarter of 2025—moves he said were “a little premature” in hindsight.
Jain argued, however, that the “underpinnings” of the AI theme had worsened and highlighted what he sees as late-cycle behavior and vulnerabilities, including what he described as double and triple ordering in memory markets. He also said defensives were “fairly attractively valued,” noting that some defensive sectors have underperformed for several years even as early signs of improvement have emerged.
Jain said the firm is meaningfully overweight consumer staples, utilities, and healthcare, and underweight technology. He also discussed concerns about the concentration of tech-related weights in equity indices and pointed to what he characterized as rising stress across parts of software and other areas linked to AI enthusiasm.
Executives linked asset resilience to client expectations and diversification
Carver said the firm has long told clients and consultants not to expect GQG to “participate in runaway markets,” and that the objective is to outperform over a full market cycle with lower volatility and better downside protection. He said this framing helps explain why assets remained near record levels even with relative underperformance in certain strategies over the year.
Carver also pointed to the firm’s strategy mix. He said nearly half of the business—over $70 billion—is in an international equity strategy that returned “north of 20%” last year. Adding emerging markets, Carver said more than $110 billion delivered better than double-digit returns. He noted U.S. equity, where relative performance was weakest, is the smallest part of the business.
Global Head of Distribution Steve Ford reinforced this point, saying GQG consistently communicates a goal of “high single-digit, low double-digit compounding” over a full cycle and that clients generally understand the firm is less likely to outperform in “runaway and frothy markets.” Ford added that, over three years, the firm’s “worst strategy” compounded client capital at 13% annualized, and he said the performance picture improved through the end of January versus month earlier.
Financial results: revenue, income, and margin increased
CFO Charles Falck reported 2025 net revenues of $808.3 million, up from over $760 million in the prior year, which he attributed to higher average AUM of $164.3 billion (up 10.8% year over year). Falck said net operating income was $622.5 million (up 7.6%) and net income was $463.3 million (up 7.3%).
Falck said the operating margin increased from 76% to 77% and described the firm’s profitability as strong. He cited a net revenue compound annual growth rate of about 11% based on the company’s historical progression.
He also noted a small decrease in fee realization, to 48.4 basis points from 49.6 basis points, which he attributed to mix shift into lower-fee vehicles and slightly lower-fee strategies. On expenses, Falck said general and administrative costs fell $6.2 million (down 14%) due to a “prudent approach” to projects and operating expense management. Compensation and benefits increased $4.9 million (up 4.9%) while average headcount rose to 240 from 212. In a later Q&A exchange, management said compensation per employee declined primarily due to hiring more junior, lower-compensated staff rather than broad changes to pay levels for the existing team.
Falck said the effective tax rate moved slightly higher to 26.7% from 26.5%, remaining within what he described as a range of 26% to 28% since 2022. He added that the firm had no debt outstanding during 2025.
Dividend maintained at 90% payout; distribution expanded product access
Management said the board declared a fourth-quarter dividend of AUD 0.0365 per share, representing a 90% payout ratio of distributable earnings. Falck said the aggregate fourth-quarter dividend payment totals about AUD 108 million, and that full-year dividends paid were $439.3 million. Distributable earnings were reported at $477 million, and diluted earnings per share were $0.16.
On distribution, Ford said platform access and ratings remain intact, and he emphasized ongoing expansion in the wholesale channel. In response to a question about product development, the team said recent vehicle additions included U.S. ETFs and collective investment trust (CIT) products aimed at the 401(k) market. Management said early responses were positive, while also noting that new vehicles typically require time to build track record and platform access.
During Q&A, executives discussed flows and noted that outflows in the back half of the year were largely tied to clients reacting to shorter-term performance. They also referenced seasonality tied to annual performance reviews, while cautioning against overgeneralizing patterns. Management declined to provide detail on gross inflows versus gross outflows and said there had been no performance-related fee discounting.
About GQG Partners (ASX:GQG)
GQG Partners Inc operates as a boutique asset management company worldwide. It manages equity portfolios for investors, including insurance funds, pension/superannuation funds, sovereign wealth funds, ultra high net worth investors, sub advised funds, financial advisors, wealth management administration platforms, private banks, and other discretionary wealth managers. The company was founded in 2016 and is headquartered in Fort Lauderdale, Florida. GQG Partners Inc is a subsidiary of QVFT LLC.
