GDG, formerly known as Austock, became an ASX 200 company in April as the Melbourne-based investment company’s market capitalisation soared above $2 billion. The stock’s appreciation has been so rapid that broker coverage is very thin on the ground, and this is the first time MM have considered the business, and it’s never figured in our Q&A report. This financial services company specialises in tax-effective investment solutions, with a focus on long-term savings and wealth management. The business is split into two main segments:
- Benefit Funds Management and Fund Administration: Through its subsidiary, Generation Life Limited, GDG offers investment bond products designed to support financial planning, estate planning, and wealth transfer.
- Investment Solutions, Research, and Ratings: This segment includes Lonsec, which specialises in connecting financial advisers, fund managers, and super funds with tools, data, and insights for improved investment decisions
In the 1H25, GDG reported revenue of $59.1mn, with 40% coming from the benefit side of the business. The CEO of this new high flyer is Grant Hackett, the renowned swimmer and multiple Olympic gold medal winner, who is bringing his work ethic from the pool to the office to help drive this provider of specialist financial products, mainly for retirees, and asset management and financial research services from strength to strength. The company’s shares jumped in May as they joined forces with the “big boys”:
- In May, BlackRock took a relatively small $25mn stake in GDG as the two companies formed a strategic alliance – BlackRock (BLK US) has a market cap. of ~$235bn.
This alliance with the world’s largest asset manager focuses on and collaborates with its subsidiary, Generation Life, to co-design and distribute a new products aimed at providing tailored solutions for Australian retirees. This could prove a significant move for GDG, as the alliance seeks to address the increasing demand in the local market and tackle the challenges faced by Australian retirees, seeking to provide them with greater financial security and certainty in their retirement planning. We can see this strategic move by GDG becoming an incremental step that could lead to consistent growth for GDG over many years.
However, it has not all been plain sailing for GDG. In April, the stock was hit hard when it disappointed analysts with its funds under management (FUM) numbers: They recorded FUM of $3.95 billion at the end of the March quarter, up over 23% from $3.21 billion a year earlier. The company logged record sales inflows of $238.7 million, a 55% surge from $154.1 million. The newly combined Evidentia Group’s FUM rose to $26.8 billion, up 39% year-over-year – this was the number that came in lower than the consensus. However, following the BlackRock news, all was forgotten, and the stock posted new highs in yesterday’s trade. A market cap of $2.3bn is rich for a financial company making less than $10mn underlying profit in the first half of 2025, though they are laying the foundations for greater profitability in the years ahead.
- We like the direction that GDG is taking, plus, of course, the share price appreciation, but there’s lots of good news priced into the stock ~$6.
