PNI is a slightly different story as it invests in a bunch of boutique investment managers and adds value through offering distribution, marketing, and back office services which allows the respective fund managers to focus on their core business. The company has invested in firm such as Hyperion, Plato and Coolabah with aggregate FUM up 33% year on year to $93.6bn for the last calendar year, the main question being does it deserve to trade on a PE of 21.7x when many sector players are under 10x?
We believe it should trade at a premium given it’s a more diversified business model (more managers and greater diversity in asset classes), however the trend in the broader sector needs to turn for PNI to come back into favour. MM has owned PNI in the past, and it is once again on the radar for our Emerging Companies Portfolio.