GQG Partners experienced net inflows of US$20.2 billion in calendar year 2024, almost double the US$10.2 billion seen in the year prior.
In a statement to the ASX on Friday, the investment manager revealed it ended the year with US$153 billion in funds under management (FUM).
As a result, GQG was trading more than 5 per cent higher on Friday afternoon at $2.48.
According to GQG chief executive Tim Carver, GQG’s result reflects both net flows and investment performance, which increased by 26.9 per cent on 2023.
“The growth in FUM reflects strong performance from our investment team and another great effort from our business team,” Carver said.
This increase led to net revenue growth of 46.9 per cent to US$760.million during 2024, the company confirmed.
Moreover, net operating income increased 50.4 per cent to US$577.9 million during the same period. This, the CEO said, was driven by an average FUM increase, but was partially offset by an increase in expenses as GQG “continues to invest in talent and overall business activities”.
“Our financial result is driven in large part by our investment performance over the long term. As at the end of December 2024, our strategies continued to provide solid long-term performance as compared to their benchmarks,” he added.
Subsequently, in the year to 31 December, GQG Partners Global Equity outperformed its benchmark, the MSCI ACWI, with a return of 20.17 per cent, while GQG Partners US Equity returned 28.47 per cent, outperforming the S&P 500 by 3.45 percentage points.
Meanwhile, its international equity strategy saw a slim outperformance of the MSCI ACWI Ex USA benchmark, with a return of 5.77 per cent versus 5.53 per cent.
However, its emerging markets equity strategy returned 6 per cent, while its benchmark, the MSCI EM Index’s one-year return was 7.5 per cent.
All four core strategies did, however, outperform their respective benchmarks on a three-year, five-year and 10-year basis.
These results, Carver said, provide the “underpinnings of continued business success”.
“Our focus on strategic growth opportunities remains vigilant. Accordingly, the board of directors has approved an expansion of the range of the targeted dividend payout ratio of distributable earnings to 50 per cent–95 per cent, providing flexibility in the use of GQG capital,” he said.
As such, diluted earnings per share increased 52.3 per cent from US$0.1 in 2023 to US$0.15 in 2024. The board also declared a 4Q24 final dividend of US$0.0378 per share, a 90 per cent payout ratio of distributable earnings.
Moving forward, Carver said that GQG continues to deliver what it believes to be “very attractive” fees compared to its competition. Namely, its weighted average management fee for the 12 months ending 31 December 2024 was 49.6 basis points.
“As a result, we may be less likely to face margin pressure in the future relative to peers with higher average management fees,” the CEO said.
Moreover, more than 96 per cent of the company's revenues last year derived from asset-based fees, which it expects. Less than 4 per cent was derived from performance fees.
“GQG continues to see solid business momentum in a variety of geographies and across channels.”
“As I look forward into 2025, I see strength in the key measures of health for our business. Of course, given volatility in markets, changes in asset allocation by investors, and the overall geopolitical environment, we may well face headwinds, but we will fight the headwinds and continue to invest and reinvent ourselves.
“I am delighted with the efforts from our team. I believe our culture is strong, and our clients have enjoyed solid performance in their GQG portfolios. We see substantial opportunities for the business in the years ahead and are energised to try to capture them,” Carver said.
Last month, JPMorgan unveiled its “Super 7” stocks for 2025, which it believes offer more than 10 per cent upside potential and included GQG on the list.
JPMorgan said it sees a potential upside of 26.5 per cent. Despite a challenging Q4 2024, marked by declines linked to Adani-related companies, it said the US-based global asset manager has delivered a three-year annualised outperformance of over 4 per cent across its core strategies.
Similarly, a recent note from Morningstar flagged GQG as one of the companies offering the greatest value out of its covered asset management firms.
“For GQG, these are its strong long-term track record, below-peer average fees, widespread presence on recommended product lists and good team stability,” equity analyst Shaun Ler said at the time.
“Past underperformance was short-lived as chief investment officer Rajiv Jain tends to make swift portfolio changes, meaning we don’t see it suffering from style headwinds as acutely as typical ‘value’ or ‘growth’ managers,” Ler said, adding there are no reputational fallouts that warrant mass redemptions, as was the case with Magellan.
“The sheer size of GQG’s FUM (US$153 billion) means it is capable of earnings growth from the compounding of portfolio returns even if net flows are challenged.”
