GQG Partners experienced US$11.1 billion of positive net flows during the first six months of the year, the global investment boutique confirmed in its half-year results on Thursday.
In a report to shareholders, GQG chief executive Tim Carver noted that these results exceeded the expectations it had set for the business over the past several years.
“We believe these flows reflect clients’ trust in our approach, driven by the consistency of our long‑term returns,” Carver said.
On the back of these flows and gains in global equity markets, GQG’s funds under management (FUM) increased by 49.5 per cent on a year earlier to sit at US$120.6 billion as of 30 June.
This comes after the firm saw its FUM surpass US$150 billion for the first time in May, less than a year after it crossed the US$100 billion threshold at the end of June 2023.
Moreover, net operating income increased 54.9 per cent from $176.4 million in 1H23 to $273.2 million, with GQG citing its continued investment in talent and the overall business,
Net revenue in the first half of 2024, meanwhile, was US$363.1 million, an increase of 53.1 per cent over the previous corresponding period.
The firm clarified that it earns revenue primarily from management fees that are based on a percentage of FUM. Management fees represented 94.6 per cent of GQG’s net revenue during the half, which it suggested created stability in the revenue stream, particularly during periods of volatility.
“As in prior periods, our revenue is overwhelmingly derived from asset-based fees, with only 5.4 per cent of our revenues for the first half of 2024 coming from performance fees. We expect this revenue mix to remain stable over time, contributing to what we consider to be a high-quality earnings profile,” Carver said.
“Our financial results were driven in large part by our investment performance over the long-term. As at the end of June 2024, our strategies continued to generate solid relative returns with lower volatility compared to their benchmarks, which we believe provides the foundation for continued business success,” he added.
Subsequently, in the year to 30 June, GQG Partners Global Equity outperformed its benchmark, the MSCI ACWI, with a return of 36.96 per cent, while GQG Partners US Equity returned 38.52 per cent, outperforming the S&P 500 by 13.96 percentage points.
Meanwhile, its international equity strategy more than doubled the performance of the MSCI ACWI Ex USA benchmark, with a return of 29.68 per cent versus 11.62 per cent, and its emerging markets equity strategy returned 33.2 per cent, outperforming the MSCI EM Index’s one-year return of 12.55 per cent.
Noting that its investment performance “underpins the entire business”, Carver reiterated GQG’s focus on perpetuating this performance.
“Of course there will be periods where we underperform, but we believe our culture of focus, drive, and adaptability can help us right the ship when we trail markets, steering us in a direction that will help us achieve our goal of long-term outperformance.”
The firm’s board declared a quarterly interim dividend of US$0.0335 per share, representing 90 per cent of distributable earnings for the quarter ending 30 June 2024.
