GQG Partners (GQG) H1 2024 earnings summary

Executive summary

• Funds under management (FUM) reached $155.6 billion as of 30 June 2024, up 49.5% year-over-year, driven by $11.1 billion in net flows and $23.9 billion in capital appreciation.

• Net revenue rose 53.1% year-over-year to $363.1 million, and net operating income increased 54.9% to $273.2 million.

• Net income after tax was $201.2 million, up 56.4% year-over-year, with diluted EPS up 75% to $0.07.

• All flagship investment strategies outperformed benchmarks on one-, three-, and five-year bases, with top decile alpha and Sharpe ratios and lower volatility than peers.

• Strategic expansion included the launch of the Private Capital Solutions (PCS) business, acquisition of boutique interests, and operational expansion into Abu Dhabi.

Financial highlights

• Average FUM for the period was $139.5 billion, up from $95.2 billion in 1H23.

• Distributable earnings totaled $209.9 million, up 53.7% year-over-year.

• Dividends paid amounted to $167.8 million, with dividend per share paid at $0.0566 and declared at $0.0641.

• Operating margin for H1 2024 was 75.2%, up from the prior year.

• Management fees comprised 94.6% of net revenue, providing stable earnings.

Outlook and guidance

• Management anticipates continued positive net flows in 2024, supported by a robust pipeline of client demand and ongoing investments in distribution and infrastructure.

• Private markets business (PCS) is not expected to be material to group financials in the near term but is seen as a long-term growth driver.

• Management expects continued fee pressure in the asset management industry but believes its fee structure is sustainable.

• No specific guidance on PCS modeling or capacity, but management is confident in ample capacity for current strategies.

• Revenue mix is expected to remain stable, with asset-based fees comprising the majority and performance fees accounting for 5.4% in 1H 2024.