PDL +8.11%: a strong first half result for the investment management firm ensured the share price was well supported against a weaker backdrop. Base fee revenue was up 35% to $317.7m and performance fees up 8% meant revenue beat estimates by at least 5%. Costs were up 20% but still came in better than expected which meant UPAT at $131m was a ~25% beat to market. Performance of FUM has dipped slightly on a 1-year view, though 38% still outperforms its benchmark over that period. They’’ now launch a $100m buyback which was announced at the time Perpetual (PPT) launched a takeover bid for the company. Pendal is trading well above the intrinsic value of that offer which now looks very opportunistic given the first half’s performance. While margins are expected to normalise in the second half, they’ll likely settle above what has been priced in.
MM are bullish PDL
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