Ladies and gentlemen, thank you for standing by, and welcome to the Pinnacle Investment Management Group Limited full year FY 2021 financial results teleconference. At this time, all participants are just in the listen-only mode. Following the presentation, though, there will be some time for a question and answer session today. To ask a question, you'll just need to press star one on your telephone. Just please be advised that today's call is being recorded. Without further ado, I'll hand the conference over to our first speaker for today, Mr. Ian Macoun. Thank you, and please go ahead, Ian.
Thanks, Miles. Welcome to everyone who's joined us on the call this morning. Thank you for your time. We appreciate your interest in PNI. As you've heard, this call is to discuss our results for the 2021 financial year. We posted with the ASX last night our formal results announcement, our annual report, audited financial statements, Appendix 4D, and importantly, our investor presentation. We'll be speaking to the presentation this morning or rather to a few parts of it. The colleagues with me on the call are Alan Watson, our Chairman; Andrew Chambers, Executive Director with particular responsibility for institutional and international distribution; Ramsin Jajoo, who leads our retail distribution function; Dan Longan, our CFO, who besides finance and accounting, Dan's responsible for IT, middle office, back office, offshore vehicles and operations, and a range of other major infrastructure functions.
You'll hear later that we've done a lot of work enhancing our capabilities in preparation for further major expansion. I'll simply call out our main themes and highlights of our results, and briefly elaborate a few aspects that we feel are particularly important for analysts and for shareholders. The presentation is far too detailed for us to fully cover in the call of this duration. We make it this extensive to enable people to review as much detail as they wish in their own time. We'll of course, go into more detail in one-on-one meetings with larger shareholders. The presentation's arranged in self-contained topic sections and is easy to navigate. We'll leave plenty of time for questions. You're welcome to direct to any of the Pinnacle representatives on the call any questions that you have.
As you can see on agenda slide three, there are sections where the relevant executive will be Andrew or Ramsin or Dan rather than me. Slide two is a disclaimer that is important and we'd ask you to read this at your leisure. Slide three is an agenda. Slide four is titled "2021 Financial Year Themes." This sets out our opinion of the major themes for the year. Now, we recognize and strongly believe that it's for our guests on this call, analysts and shareholders, to form their own opinions on our performance and on the outcomes that we're delivering. We always value feedback from you, by the way. Nevertheless, people do ask us for our view, our opinion on how things are traveling. We're happy to do this to the best of our ability and in good faith.
You'll see that our view of the themes this year is very upbeat and confident. We are indeed very proud of what has been achieved by our company this year. We'll strive to always be objective and fully realistic, and to seek to place our results in context. This year's themes are quite different from our opinion of the themes when we released our 2020 full-year results. At that time, we said we felt we had delivered a solid financial outcome in the prevailing circumstances, although below expectations at the start of the year. Our profit was higher than in the previous year, but not by as much as we would have expected in the absence of the COVID crisis. I'd like to make one particular point about the context of our very strong results for this year.
Now we are reporting extremely strong growth in profits, buoyant share markets, record funds under management inflows, and our strongest ever increase in funds under management. We'll be saying that our status as a high-growth company remains intact. Indeed, it has been further enhanced this year, and we've fully recovered from the virus and market challenges of FY 2020. We want to make it clear that in our excitement and confidence about the future for our company, we humbly, acutely are aware of how fortunate we are. This virus has not been fair. Some have prospered, while so many have endured enormous difficulties. We are very respectful of this fact. Our company's mission is enabling better lives through investment excellence.
We know that money itself cannot cure the ills of the world, but it can be an enabler of better lives. We must all do whatever we can to help in times of adversity. Of course, none of us knows what lies ahead with certainty. With that caveat and context, our themes for this year are as set out in slide four. A strong financial outcome and the resumption of strong growth in profitability, in funds under management, and in net inflows. We've enjoyed continuing benefits from the growing diversity of our asset classes and the investment strategies of our affiliates, of the types and domicile of our clients, and of our performance fees exposures. Happily, we are entering the new financial year very confidently anticipating further growth.
Our funds under management at the start of the financial year are more than 20% ahead of the average funds under management throughout the financial year that these results relate to. We do recognize the possibility of further external adversity, but we have weathered adversity, major adversity, in 2020 and proved ourselves to be resilient. We are well prepared for and actively seeking further meaningful expansion opportunities, both organic and inorganic, in Australia and offshore. Slide five sets out the financial highlights of the 2021 financial year. Net profit after tax of AUD 67 million, up 108% from the 2020 financial year. Basic earnings per share of AUD 0.382, up 103%. Diluted earnings per share, AUD 0.365, up 104%. Our share of the net profit after tax from Pinnacle affiliates was AUD 66.4 million, up 75% from FY 2020.
This included our share of performance fees earned by Pinnacle affiliates after tax of AUD 19.5 million in FY 2021, compared with AUD 6.6 million in FY 2020. We had cash and principal investments. Principal investments are basically investments in affiliate funds of AUD 155 million at the 30th of June. Our CBA facility was increased in order to provide dry powder for potential business investments. Additional funds are deployed meanwhile in liquid strategies managed by our affiliates. We paid a fully franked final dividend of AUD 0.17 per share, and we've declared that dividend. That's up 100%, or double the FY 2020 final dividend, and it takes total dividends for the financial year to AUD 0.287, up 86% on the financial year. There's one important footnote here, footnote one. Adjusting for the net return on principal investments, our NPAT is up 98% on the year.
That's the comparison that we focus on in assessing how much our profit has grown from one year to the next. For those who are interested, footnote two adjusts also for our share of performance fees. I should emphasize that we don't make that adjustment ourselves. We regard performance fees as an important component of our profit. Look, in simple terms, our profits and EPS were approximately double the previous year. Slide six shows a bit more detail on the financials. Slide seven shows the rates of growth in our net profit after tax, earnings per share, and dividends over the five years since we rolled up. Since we became a pure play listed Pinnacle. 63% per annum NPAT growth, 47% per annum EPS growth, and 54% per annum dividend growth.
Our growth has been consistently strong, except for FY 2020, which was the year of the COVID stock market slump, when we only grew earnings by about 5% or 6%. As slide eight shows, we have really caught up on the slower FY 2020 growth and restored our high-growth record. On average, over the two-year period to the 30th of June 2021, which encompasses the entire crisis period to date, NPAT grew just about 60% per annum over the two-year period on average. Diluted EPS 56.7% per annum on average over the two-year period, and FUM growth was 32% per annum over the two-year period. Slide nine shows our funds under management highlights. The aggregate affiliate FUM was AUD 89.4 billion at the 30th of June. Now, we pointed out in footnote two that Plato won an exceptionally large low-fee mandate in April of AUD 3.9 billion.
We're effectively inviting you to exclude that. If you're using our FUM numbers, for example, to estimate the run rate revenue growth starting in FY 2022, you're using for that purpose, maybe you exclude that. If you're looking for a kind of normalized rate of FUM growth and inflows for FY 2021, you might exclude that AUD 3.9 billion. This AUD 89.4 billion was up AUD 18.9 billion or 27% over the six months from December, or AUD 15 billion or 21% excluding that low-fee mandate. Our FUM was up AUD 30.7 billion or 52% over the 12 months, or AUD 26.8 billion or 46% excluding the Plato mandate. Aggregate retail FUM, this is really important, retail FUM, is now AUD 20.3 billion. We're delighted to have hit AUD 20 billion in retail. That was up 22% from AUD 16.7 billion a year ago.
Oh, sorry, six months ago in December, AUD 16.7 billion, up 22%, and up 55% from June a year ago. The AUD 30.7 billion increase comprised increases due to net inflows of the AUD 16.7 billion or AUD 12.8 without the Plato, which is still a record by a long margin. AUD 4.5 billion of that was retail, also a record for retail by a large margin. We also got a AUD 14 billion increase due to market movements and investment performance. We make the point we have an increasingly diverse client base, that's important. Our closing FUM of AUD 89.4 billion is 28% higher than the average FUM through the FY 2021 year or 23% higher excluding the Plato mandate. This gives us a strong starting base for revenue and profit growth in FY 2022 over the FY 2021 level.
Or if you prefer, it gives us a healthy buffer against any stock market or economic growth adversity that might come our way. Slide 10 shows the size of our inflows during the period. We had record inflows, as I mentioned. Total net inflows, AUD 16.7 billion, or in footnote one, AUD 12.8 billion excluding the Plato mandate. AUD 12.8 billion for the year. AUD 7.3 billion in the second half, excluding the Plato mandate. Again, still record inflows by a large margin. Retail at AUD 4.5 billion was AUD 1.9 billion in the first half and AUD 2.6 billion in the second half. Hyperion, Coolabah, ResCap, Metrics, Firetrail, and Solaris all growing strongly in retail. Our institutional net inflows for the year, AUD 12.2 billion, AUD 8.3 billion excluding the Plato one-off, AUD 3.6 billion in the first half and AUD 8.6 billion in the second half, or AUD 4.3 billion, including that one-off.
Recognizing that institutional flows can be large and uncertain, we are delighted by the results for the year and the momentum with which we enter FY 2022, both within Australia and offshore. I'm sure you can ask Andrew Chambers about the insto pipeline and Ramsin about retail. Slide 11 sets out some affiliate business highlights. Slide 12, some further detail on the financials. Slides 13 and 14 provide some detail on our performance fee growth, and there's further detail on performance fees later in the presentation as well. Slide 15 outlines significant components of the Pinnacle Parent component of the financial results. Slide 16, balance sheet details. Slide 18 records our history of FUM growth over the years.
Slide 19 is one that many shareholders look for, which shows the funds under management by affiliate. The first row across the top shows the 30th of June 2021 sum for all of our affiliates. It is very pleasing to see ResCap at AUD 16.3 billion, Hyperion at almost AUD 12 billion, Solaris and Plato both above AUD 10 billion, and strong growth in other affiliates, especially Coolabah and Metrics. Slides 20, 21, and 22 show the overall continuing strong investment performance of our affiliates. 80% of strategies with a track record exceeding five years have outperformed their benchmarks over the five years to 30th of June. That's a classic measure used for medium-term performance, five years. You'll also see the long-term since inception numbers in the right-hand column. Now, I'd like to spend just a few minutes on slide 26, and then we'll go to questions.
Slide 26 is headed growth and resilience. You'll notice our focus on growth throughout the presentation. We spoke quite a lot about resilience during 2021 and 2020, and we're delighted that our business has proved resilient to the sharp, albeit fairly short-lived so far as it turned out, FY 2020 market downturn. We retain our vigilance and preparedness to face any adversity that might come, but we're also now very focused on growth ahead. We've shown in slide seven that we managed EPS growth of 47% per annum over the five years since we rolled up. Over the past two years, EPS grew by 57% per annum. We are very focused on continuing to be a high growth company. Our strategy in this regard is to be careful, that is not to seek to grow by taking excessive risk and to have multiple sources of growth.
That both increases the likelihood of strong growth irrespective of challenges in any particular market or affiliate. It also increases the size or quantum of our growth. You'll hear us talking more, a lot more about offshore markets, offshore Horizon 2 and 3 opportunities, retail expansion, further affiliates, and so on. Without spending even more time, I apologize for going on. Let's go to questions, please, Miles.
Certainly. Ladies and gentlemen on the phones, again, if you'd like to ask a question, it's just by pressing star one on your telephone keypad and then just waiting for your name to be announced. We do have a couple of questions in queue, though. I'll first go to Scott Murdoch from Morgans. Please ask your question, Scott.
Good evening. Well done. Great result this year. Just start on the offshore strategy. Clearly, that's a focus you've signaled offshore for a while now. Maybe can you just give us a bit of a picture of the five-year expectation? Obviously, distribution, a massive part of the Australian business. Are you thinking that you can replicate your distribution capability that you have here in offshore jurisdictions?
Thanks, Scott. I'll start off answering that, but then I might ask Andrew Chambers, who's responsible for our offshore distribution, to make a comment. You're right that we've been signaling this for some time. I'm also delighted that Adrian Whittingham, who built our retail capability and then handed over so successfully to Ramsin, is back full time, charged with the responsibility for building and growing our offshore Pinnacle International. That is a significant initiative that we're taking. We started with distribution offshore, and we're having a lot of success there. That's going great. We are signaling that we are very interested in doing the Pinnacle model offshore. I can't give you a five-year forecast, of course. We're telling you that we have ambition offshore. We probably would have done more by now if it wasn't for our inability to travel over there.
We think the Pinnacle model has a lot of good prospects for offshore. We're not going to be silly. We're not going to take big risks, but we think there's good opportunities offshore. Chambers, would you like to say something about distribution offshore?
I'd just highlight that we've been quite modest today in our investment offshore, relative to the payoff. If you think about our offshore business today, it represents about 10% of our total AUM as a firm. In the last 12 months, we've sourced AUD 3 billion of our total net inflows from international investors, which we've sought from 26 countries outside of Australia, 40% from the U.S. across Antipodes, ResCap, and Hyperion. 28% of that was from U.K. across Aikya, Antipodes, and ResCap, and 32% from the rest of the world across effectively six affiliated firms. Very good momentum internationally, and we expect that to continue looking into the future. In fact, the early signs in this new financial year are pretty positive across a number of affiliates underlying to those which raised capital last year.
The consultant ratings are very much in place with the global consultants for a lot of our global equity, global real estate securities, global emerging market equity managers, which gives us confidence about our capacity to continue to compound that momentum we've built to date. We intend to continue investing in offshore distribution in terms of adding more people on the ground, both in the U.K. and in the Americas, representing our efforts in the Americas from Canada through to South America, and also out of London for the Europe, Middle East, and Africa region. Of course, we look after Japan from Australia with our Japanese sales team here.
Okay. Thank you. That's great detail. Thanks. Probably steps into a question on flows. You've sort of called out there in the presentation that the insto pipeline remains strong still. Obviously, a lot came through in this half and in this year. Just interested in sort of the quantum and the quality of the insto pipeline, as it stands now compared to, say, 6-12 months ago.
That's also one for Andrew.
Yeah. I would say that the pipeline is as strong as what it's been before. The thing that I can't ever anticipate in advance is the timing of when things will actually crystallize, which is always the great challenge in the institutional market. The size and quantum is the same as what it's been, and I expect it to actually increase as we continue to add more distribution professionals to the team. If you think about the context for where the assets were raised in the last 12 months and where I think it'll be raised in the next 12 months, if you look at the last 12 months, AUD 10 billion of that money was sourced from public markets, in public market asset classes, AUD 2.2 billion in private markets.
AUD 7.4 billion was sourced in domestic-facing asset classes and AUD 4.8 billion in global asset classes. I think if we look forward into the next 12 months, Well, I think we'll retain our growth in credit-based strategies, given where base rates are around the world, both across Coolabah and Nexus. The leadership on the equity side will move from Australian equities and global real estate securities to global equities and global emerging markets, recognizing the fact that both Resolution Capital and a number of our Australian equity managers are up against capacity limits and may be going through periods of recycling into retail.
Okay. Ian, thanks. Great detail. Thank you. Just, I know the last on retail flows while I'm here. Obviously, retail flows can be influenced by, I guess, sentiment in the market, and that's been pretty positive. I guess if you attempt to strip that out, which is probably impossible, what you sort of expect in terms of, is there anything under the bonnet there that can sustain this elevated retail flows that we're seeing in the last six months?
We'll throw this to Ramsin , I would just make the comment. Scott, we haven't been reliant on positive sentiment in the retail market for our flows. We've had some periods of pretty significant negative sentiment when the market's tanked and so on. We're taking market share, we're growing in retail irrespective of the sentiment of retail investors, albeit that is becoming quite strong and positive again. We don't need total system to be growing for us to keep getting retail inflows. Our retail inflows are across quite a large number of affiliates. That's another reason that gives us such confidence. We've also built strong momentum in a number of our affiliates in retail. Ramsin , would you like to comment further?
Just a quick comment. The biggest driver of success in retail is momentum in terms of flows. Once you actually get onto APLs, Approved Product Lists, or once you get into many managed portfolios, model portfolio programs, the tap turns on, momentum becomes a key driver of future success. To Ian's point, we do have a good support base across many strategies in retail. Unless there's some massive market dislocations from here on in, which even in those cases, we do take market share, there is some confidence in our retail future pipeline.
Okay. Thanks, Ramsin. Thanks, Ian. Just one last one, I'll hand it over to someone else. Just on Horizon 3, obviously acquisitions, you've got the capital base there. Just interested that capital position, would you prefer to leave that as it is until you're sort of able to look at something offshore? Is Australia still on the horizon in terms of Horizon 3 opportunities?
Yeah. It's always difficult for us to comment too specifically about Horizon 3, Scott. We've said we're having lots of discussions and we have ambition to do some Horizon 3 and there are opportunities in Australia as well as offshore. It's very difficult to be too specific. We took on this extra CBA money to have dry powder. We love having dry powder because it creates optionality and puts you in a stronger position in negotiating any potential acquisitions. We want to tell the market that we're actively looking. We don't want to promise something. I don't want people asking me every day, "Where's your acquisition?" We're trying to strike that balance and just signal that we have the wherewithal now with over AUD 100 million of capacity there.
We have said to the Commonwealth Bank, if we deploy that with acquisitions, we would seek to top it up probably with equity. It all depends on the circumstances.
Okay. Thanks, Ian. Thanks a lot for the detail. I'll pass to someone else.
Okay. Once again, star one if you did want to ask a question. The next one I'll hand to Nicholas McGarrigle from Barrenjoey. Please ask your question, Nicholas.
Thank you. Hi, team. My question will probably extend on Scott's a little bit. I know that in the past you've been hampered in terms of executing on acquisitions in global markets. Can you talk about potentially the capacity of the team to be comfortable with due diligence in a post-COVID world and if that's going to impede progress, or do you feel like you've solved for that in a way?
Yeah. That's a crucial point. I would say we have been impeded. You can do a lot. We've been working on laying the groundwork for offshore, really for a number of years. Our Chairman has a lot of offshore experience, and we've been sort of laying the groundwork. I would probably say we would've done more offshore by now. You can't say for certain, but the inability to travel, because the way we operate, when we partner with people, we seek to get to know them very well before we partner, because we put so much store on, are these people the real deal? What's their character? You can do a lot with video conference, and we have had many, many, many dozens of video conferences with people offshore who we're contemplating partnering with, either Horizon 2 or Horizon 3.
It's difficult to make a big move without meeting people. We have been held back. Who knows what lies ahead with the vaccine. We're getting ready for post-COVID.
Yeah. The commentary in the presentation talks to Horizon 2 and Horizon 3 opportunities. Can you help us understand what the shape of those that are most prospective may look like? I think there's a comment about additional investment maybe through the OpEx line into more Horizon 2 opportunities and maybe where some of those options are for you at the moment.
Yeah. It's easier to do Horizon 2 than Horizon 3 remotely. Adrian's done a lot of terrific work, but we could do some of what you see, what we've always done in Australia, building a new affiliate or a new capability from scratch, working with talented, experienced people. You could see us, I don't want to go forecasting things. You could see us doing Horizon 2 offshore before we're able to travel. You can get pretty comfortable on those things, and it's not very risky. We're not outlying a lot of money. Harder to do Horizon 3. Yes, we are looking in Australia and overseas at both Horizon 2 and 3.
In terms of, I think, just turning to the Pinnacle Parent level, there was some really good success-based revenues and some, I guess, retail revenue sharing in the Pinnacle Parent. How should we think about the way that evolves into next year? You obviously made a small profit at the parent level. How does that evolve over time?
That revenue is a bit of a mixture. As you mentioned, some of it is success-based. We got something of a boost this year by, for example, very strong inflows into ResCap. Quite a lot of it is trailing. Quite a lot of it is a percentage of revenue, especially retail revenue or so many basis points. That will be ongoing. Certainly, our revenue in Pinnacle Parent has grown to a higher level, which is sustainable, at least in part. We don't target to make a profit or a certain loss in Pinnacle Parent. We've always been happy to invest off our P&L in Horizon 2 and we could do some more of that. Can't give you a lot of visibility on it. It won't move enormously a little bit above or potentially somewhat below zero, breakeven.
Sure. In terms of I think looking through some of the operating leverage, there was some really strong margin improvements for some of the managers and probably less so for others, but potentially that's driven around investment in future capability. Can you talk through maybe the top three investments that have been made in the affiliates to power new strategies that have yet to sort of see material distribution success?
Yeah. Clearly there is major operating leverage in our affiliates. That's the nature of the beast. You have to put the resources in place ahead of growth. Once the fund grows and grows strongly, the operating leverage kicks in very strongly. Our affiliates are a mixture of maturing ones, where that operating leverage is really coming home to roost, and investment in new strategies. Even in some of our more mature affiliates, we are investing in new strategies, which means adding some people to build new strategies. I can't think of a single one of our affiliates that isn't building new strategies. Of course, that retards the profitability of the affiliate and makes it less operating leverage than there otherwise would be.
You look at a Hyperion, for example, they invested in global, some people, and now as the global fund comes in, you'll see the operating leverage just keep growing there. All the suspects, Nick, you can see which ones are having operating leverage kick in. The bigger growth managers, well, you can see it in the fund table, who's grown the most, ResCap, Hyperion, et cetera. Newer affiliates haven't yet kicked in, but they will over time. You'll see Longw ave and Aikya starting to kick in. I expect flows into them this year. Does that more or less answer it for you?
Yeah, that's definitely useful. It's interesting to see that there's strategies being invested in that haven't seen flows. For instance, ResCap, who built out a real asset strategy that most of the flows have been to the global REITs fund, which is longstanding. There's upside-
Correct.
There, which is good to note. Maybe a question for Andrew.
Sorry. I was just saying, if we had time, we could go through all of them. They are all adding extra strategy.
Yeah.
Firetrail.
We can do that tomorrow in our session.
Yeah.
Great. This is maybe a question for Andrew, and then I'll give one else a chance, just around Metrics and Coolabah's ability to distribute their fixed income, fixed interest type products into low-rate jurisdictions, and what the impedance is there. I know that certain Australian managers have had good success distributing it to Japan, for instance. What are some of the cracks in the dam wall that we need to see for that to start to be material?
Yeah. You're absolutely spot on, Nick, in terms of the low rate settings around the world. That's really providing a large conundrum for most asset owners. Traditional fixed income strategies, long duration fixed income strategies in particular, are particularly challenged. All attention and focus is turning to building defense by unconventional means. That's where areas like private credit strategies or more absolute return type public markets credit strategies such as Coolabah come into the picture. In terms of offshore interest, we're seeing quite a bit out of Japan for both Metrics and Coolabah, given the rate settings over there. Also given the trade relationship between Japan and Australia, there's a lot of comfort around Australia as a destination point for both managing money, but also the financial settings here.
We're also seeing interest from other parts of the world, such as the major insurers in parts of continental Europe, given that they're trying to solve equally for liability matching purposes, but also the endowment of foundation market in the U.S. and the big Canadian funds as well, which see outsized risk-adjusted returns being earned in areas like private credit in Australia relative to the rest of the world. Even on a risk-adjusted basis, what you can earn in real estate direct lending, for example, or LBO-sponsored debt direct lending also, relative to what you might earn in, say, the U.K. or U.S., is very attractive. It becomes much more opportunistic in nature and more targeted at particular market segments, which are either there for liability matching purposes or just simply yield enhancements as well. It's quite targeted in terms of the approach.
That's great. Thank you for taking the questions. I'll let someone else have a go.
Okay, we've got another question in queue. I'll next throw to Shaun Ler from Morningstar. Please ask your question, Shaun.
Hi, good morning, everyone. Clearly very fast growth everywhere and excellent job. I just want to point to a similar firm called, I think Pacific Current. At one point, they had about 18 boutiques in the estate. Similar to Pinnacle, grew very aggressively, eventually, the downfall came from making the wrong investments, many write-downs, excessive impairment. I guess for Pinnacle, would you mind giving more detail on what mistakes from your peers are you trying to avoid, plus how are you going to grow more sustainably, I guess in a risk-adjusted manner, especially as you look to grow overseas?
Thanks, Shaun. That's exactly the right question to be asking. I try hard not to compare us with others too much. We say constantly amongst our sort of leadership team and within Pinnacle that it's all in the execution. We must never be complacent. We must always look after our existing affiliates and protect the golden goose. As we grow, we will always be careful and we will always respect what we already have. We've said we won't take excessive risk to grow. As you can see, we're a high-growth company, right? Just Horizon 1 on its own, doing nothing else, we're a high-growth company. We don't have to do the Horizon 2 and Horizon 3. We want to do them because our platform is strong, lends itself to this kind of growth, and we believe we can grow in a fairly low-risk manner.
I can't say a lot more to you except that we are very aware of the risk and we're not going to go taking silly risks. We've got something that is too valuable to go placing at risk.
All right. Thanks for that, Ian. I guess my follow-up question to that is, what are you trying to do differently to your competitors, like Fidante? Clearly, historically, you guys have grown some faster than them, Fidante, for example, they've recently gained some momentum, winning the 2020 Distributor of the Year and recently took on Platinum Asia's ex-PM in a new EM boutique. I was just curious, what's their secret sauce to staying ahead, both domestically and overseas?
Yeah. We have enormous respect for Fidante. We think they're one of the two best multi-affiliate managers, based in Australia, and they've certainly grown extremely well with Ardea more recently and so on. What I would say, we don't need for Fidante to do poorly for us to do well. There's a huge market out there and we can all do well. What we do, we just stay focused on excellence. We stay focused on all of our affiliates being excellent and us doing a great job for them in distribution with the quality of our infrastructure, et cetera. There'll always be good competitors out there. I say to our people constantly, "Don't go focusing too much on the competitors." If we do a poor job, there'll always be competitors to take the business instead of us.
If we keep doing an excellent job, we will win more than our fair share of the business.
Ian, it's probably worth highlighting, if I can make a comment just very quickly. If you think about the context of Fidante and what they've achieved with Ardea and the billions of dollars of growth they've had in the last 12 months, at that same time, with credit-based strategies both across Metrics and Coolabah constitute over 1/3 or around about 1/3 of our total net inflows for the financial year. We've succeeded concurrently with them. It hasn't had to be a binary outcome.
Yes. All right. Thank you. I guess my final question is just in regards to the dividends. The payout ratio of 79% is slightly lower than historically. I am just curious, is this a one-off thing or will this be somewhat of a more sustained level going forward?
Yeah. We still think it's a high payout ratio, Shaun.
Yes.
It's no secret we're sort of accumulating a bit of capital. We like to have this strong balance sheet. We think it gives us optionality and negotiating strength. I would argue it's still a high payout ratio and we have stayed faithful to our discipline of paying out quite a high portion of our profits. Then if we want capital, we'll go to the market and ask for it. I guess I'd probably disagree a little bit with your statement that it's low. It's quite high.
Thanks for that, Ian. Thanks, everyone.
Okay, we have just one more question for now from John Hynd from Wilsons. I'll throw to you, John.
Morning, Ian. Thanks for your presentation and congratulations on such a strong result.
Thanks, John.
Perhaps if we could just touch on the affiliates. I noticed there was some consolidation amongst one or two of them that were noted in the presentation. Can you perhaps explain some of the drivers there and if we can expect, I guess, where you start to look at benchmarks for further consolidation amongst some of the affiliates?
Yeah. I think we've sort of explained that Omega and Plato were talking for quite a while about the prospects of them getting together. They are very complementary. They both do great quant research and can benefit from each other's, if you call it, IP. It did make quite a lot of sense. As it turns out, there was an extremely low fee, quite large mandate that has been lost in August, which, it's kind of good that they're getting together given that, although it wasn't the majority of their revenue. Look, we have very big ambition for quant within the Pinnacle Group. We think it will be a major area of active funds management going forward as we start to talk more about AI and so on. We're delighted with Plato getting through AUD 10 billion.
It's a great success, and we think we'll be doing more in quant generally. You could think of Two Trees also being systematic or quantitative. I'm not going to go foreshadowing anything, but it wasn't driven by a desire for us to consolidate affiliates. It was more there was a lot of sense, a lot of logic to Omega and Plato getting together. What I would foreshadow more than anything is major growth of quant funds management within our group. That's likely to be within Plato, although not necessarily.
Great. That's some good color, I guess leads to my next question around, they took on a larger mandate, that is obviously a lot of fees. How do you think about the quantitative strategies and then the quant affiliates and their fee profile going forward? Will it essentially lead to an adjustment on an average level at some point across the affiliates? Do you think the growth that you're seeing in the active managers like Hyperion provide an offset?
Yeah. Overall, our average fee rates have been modestly floating up. I think FY 2021 is about the same as FY 2020. We don't target a particular fee level, John. What we do is, for every piece of business, we negotiate with prospective clients, and we get the best fee we can for that strategy, and they vary enormously. Some of our strategies have very high base fees and performance fees. Others have modest fees, but they're still good business. Who knows how it all works out on average? Our fees have been somewhat going up because of retail. We've been growing retail a lot. In FY 2021, as it turns out, we grew retail a lot, but we grew insto by even more. That affects your averages. Offshore money tends to pay higher fees than domestic, all else being equal. That's all helpful.
In terms of the quant businesses, they have a very big range. Plato has some high fees business. It does very well, for example, out of its equity income, especially in retail. They have some quite high fee business. They also have some areas where that might be very large FUM at low fees, but it's still very good business because it doesn't take up much capacity in those low tracking areas. They'll do that business if it makes sense. Plato also will have some quite high fees, pieces of business being added going forward. It's quite a mixture.
Yeah. Okay. I think it's briefly touched on earlier, obviously there's a lot of leverage displayed this year, with revenue up 45 and EBITDA up 90. Are you able to perhaps, in your eyes, break out the most important buckets there and how we think about that specific leverage going forward? What can it look like in three or five years' time?
Thanks. There's no question that there's a range of our affiliates there that are fully resourced for what they are planning to do now, including new strategies. As their FUM just keeps coming in, they keep, if you like, harvesting the capacity of their capabilities, that operating leverage is very strong. If we had time, I can read out what eight strategies, major strategies that we're winning substantial FUM in. That operating leverage is there. That will be ongoing. It's a permanent feature of our kind of business. Sort of offsetting that is the investment that affiliates are making, adding people and adding cost ahead of additional strategies. That is somewhat offsetting. Really in terms of magnitude, the investments they're making tend to be pretty modest compared with the revenue they're now earning.
Yeah. Okay, thanks. Last one from me, just a more of a housekeeping. Incentives were up reasonably year-over-year. I'm assuming that's driven by some mandate wins. How should we, I guess, think about that next year if you're as successful in growing FUM as you were this year?
We've paid out what we think of as sort of full incentive this year. A great many of our people got the maximum that they could be eligible for, and you'd expect that, I'd hope, given the success across the board in our company. Yeah, that amount that we've paid out this year, that's very full. I hope that we can do the same next year, and I'll be delighted to be paying out those levels of incentive because it'll mean we've had great success in distribution and across the range of our functions in our company. Last year was very restrained. Last year was the COVID year. Our profit grew, but not by as much as you would have expected, and it was a very restrained year. That's why it's increased so much this year.
I'm delighted that we paid out as much as we did this year. It was well-deserved, and I think shareholders got very good value for it. Going forward, I'd be delighted if it's a similar kind of amount to this year and even floating up a bit as the number of people slowly increase.
Great. Thanks very much, Ian.
You're welcome.
With that, there's no further questions at this time, I might just hand the conference back to you for now, Andrew, Ian, sorry, for any concluding remarks.
Look, thanks, Miles, and thanks to everybody who took the time to come onto the call. I think we've made the major points that we wanted to make. We're delighted with the year we've had. We're looking forward to further growth and working hard on growing in a range of ways, but in a low-risk way. I guess, look, the only other point that I would make is a lot of terrific work has been undertaken within the company over the last couple of years to grow our people. Obviously, this sort of success doesn't come about by accident. You've got a lot of people working very hard to bring about this kind of success, and I'm so grateful to our people for the work they've done. If you look at Alan Watson's letter at the front of our annual report, Deb Beale's letter introducing our remuneration report.
We are calling out the quality of our people and how resilient they've been and the absolute brilliant job they've done in very difficult circumstances. I've worked hard on building succession in the company, and a whole range of younger people have grown. They've continued to grow, and the quality of our infrastructure capabilities under Dan, the quality of our distribution under Ramsin and Andrew. We've done a lot of work to be ready for high quality and further growth, so we feel very good about the shape that the company's in. Thanks to shareholders for supporting us and for your interest in the company.
Ladies and gentlemen, that does conclude today's conference call. Once again, thank you all for participating today, but you may now all disconnect. Thank you.