Pinnacle Investment Management Group H1 Earnings Call Highlights

Pinnacle Investment Management Group (ASX:PNI) used its half-year FY2026 earnings call to emphasize strong underlying growth and record net inflows, while also detailing plans to acquire full ownership of UK-based Pacific Asset Management (PAM). Managing Director Ian Macoun said the business continued to execute on its growth agenda, pointing to expanding international distribution, the rapid rise of Lifecycle Investment Partners, and a broadened set of performance-fee opportunities across the affiliate platform.

Half-year earnings: headline decline driven by performance fees and seed investment returns

Pinnacle reported half-year net profit after tax (NPAT) of AUD 67.3 million, down 11% from AUD 75.7 million in the prior comparable period (H1 FY2025). Diluted earnings per share were AUD 0.301, down 18% year over year, and the interim dividend was AUD 0.29, down 12%, with a payout ratio of 96% and franking of 80%.

Macoun spent significant time framing the year-on-year decline as largely the result of two “unusual” factors. First, performance fees were materially lower than the prior comparable period, which included an unusually large contribution (particularly from Hyperion). Pinnacle’s share of affiliates’ performance fees after tax was AUD 13.4 million in H1 FY2026 versus AUD 36.4 million in H1 FY2025. At the affiliate level, aggregate performance fees were AUD 59.3 million (100% basis), down 47% from AUD 111.9 million.

Second, the company cited a “very low” overall return on principal investments used as seed capital for new affiliate funds, which Macoun said it viewed as a one-off outcome that could reverse in future periods. The company indicated some analysts may choose to adjust for these factors when comparing underlying earnings.

Despite the performance-fee volatility, Pinnacle highlighted several measures of core growth. Macoun said:

• Pinnacle NPAT before performance fees was 37% higher than the prior comparable period and 11% higher than the second half of FY2025.
• Aggregate affiliate base fees were AUD 487.3 million, up 47% from AUD 330.5 million.
• Aggregate affiliate funds management revenue (100% basis) was AUD 546.6 million, up 24% year over year.

Record inflows lift FUM above AUD 200 billion

Pinnacle reported closing affiliate funds under management (FUM) of AUD 202.5 billion at 31 December 2025, up 13% from AUD 179.4 billion at 30 June 2025. Total net inflows were a record AUD 17.2 billion, compared with AUD 6.7 billion in the prior comparable period.

Management broke down the net inflows as:

• AUD 7.0 billion in Australian institutional net inflows
• AUD 6.8 billion in Australian wholesale and retail net inflows (17% of opening wholesale and retail FUM, Macoun said)
• AUD 3.4 billion in international net inflows

Aggregate retail FUM was AUD 46.7 billion, up 18% from AUD 39.7 billion. Pinnacle ended the period with AUD 55.4 million in cash and AUD 384.2 million in principal investments, totaling AUD 439.6 million.

Investment performance and performance-fee opportunity set

The company also underscored sustained investment performance across its affiliates. Pinnacle said 86% of affiliate strategies with a five-year (or longer) track record outperformed over the five years to 31 December 2025, up from 82% in the prior comparable period.

Macoun highlighted that Pinnacle continues to build a diversified set of strategies with performance-fee potential. Aggregate affiliate performance-fee FUM was AUD 55.6 billion, up from AUD 50.4 billion at 30 June 2025. Management noted 31 strategies had the ability to generate material performance fees in the full financial year on roughly AUD 56 billion of FUM, and 8 affiliates contributed performance fees in the half (versus 9 in the prior comparable period).

While acknowledging earnings volatility, Macoun argued that performance-fee business is an important contributor and said Pinnacle budgets conservatively for a minimum level each year, with upside in stronger periods.

International expansion and Lifecycle’s rapid growth

Management described international growth as a major feature of the half. Pinnacle reported AUD 57.8 billion of FUM from clients outside Australia, representing 28.5% of total FUM, spanning more than 50 countries. Macoun also said AUD 67 billion of FUM was now managed by affiliates located outside Australia.

The call repeatedly returned to the pace of growth at Lifecycle Investment Partners, which Macoun called Pinnacle’s fastest startup on record by FUM growth and speed to profitability. Lifecycle’s FUM grew to AUD 29.94 billion at 31 December 2025 from AUD 15.4 billion at 30 June 2025, less than 18 months from the business’s effective start, according to management.

Pinnacle also referenced recent international investments and initiatives, including a Horizon 3 investment in Japan’s Advantage Partners. Macoun said the initial 5% investment, valued at AUD 92 million, was completed in January 2026.

Pinnacle to buy remaining stake in Pacific Asset Management

The company’s other major announcement was its agreement to acquire the remaining equity in PAM, after purchasing an initial 25% stake in November 2024. Macoun said PAM’s run-rate EBITDA had grown to GBP 17.9 million as at 31 December 2025 and that EBITDA had increased 91% over the 14 months since Pinnacle’s initial investment.

Under the agreement, Pinnacle will acquire the remaining 79.2% of PAM (75% pre-dilution for staff long-term incentives) for total consideration of GBP 212.4 million (about AUD 419 million). Management said the price represented 15x run-rate EBITDA. The consideration will be a mix of cash and scrip:

• GBP 120.6 million (about AUD 238 million) in cash
• GBP 91.8 million (about AUD 181 million) in Pinnacle shares issued at AUD 17.16 per share (5-day VWAP), totaling 10.5 million shares, or 4.6% of outstanding capital

Management said the transaction is subject to regulatory approvals and is expected to complete in the first half of calendar 2026. Matthew Lamb will remain CEO of PAM, and Pinnacle stressed the deal was not a cost-synergy transaction, with both businesses intended to continue operating independently while collaborating where it makes sense.

In Q&A, Macoun and executives said full ownership would improve PAM’s access to capital, expand Pinnacle’s offshore distribution capabilities, and support collaboration across distribution, affiliate origination, and product innovation. The company also highlighted PAM’s technology, including its Advisor Lab platform, as an area that could potentially enhance services to Pinnacle’s retail client base.

Elsewhere in Q&A, management addressed Metrics, saying media and market scrutiny had been a headwind, but that portfolios were meeting target returns and that the business had “come out with flying colors” following regulatory review. Executives also discussed demand trends across wholesale, retail, and institutional channels, including continued retirement-income interest, robust private credit demand, and heightened institutional demand for core and style-neutral equities, including long-short and quantitative strategies.

About Pinnacle Investment Management Group (ASX:PNI)

Pinnacle Investment Management Group Limited operates as an investment management company in Australia. The company offers third party distribution, and fund infrastructure and support services to its affiliates and various investment managers. It also operates as a corporate trustee and responsible entity for retail and wholesale investment trusts. The company was formerly known as Wilson Group Limited and changed its name to Pinnacle Investment Management Group Limited in August 2016. Pinnacle Investment Management Group Limited was founded in 1895 and is based in Sydney, Australia with additional offices in Brisbane, Australia, Melbourne, Australia, and London, United Kingdom.