Ladies and gentlemen, thank you for standing by, and welcome to the Pinnacle Investment Management Group Limited Full Year twenty twenty Financial Results Teleconference. At this time, all participants are in a listen only mode. Following the presentation, there will be a question and answer session. And just please be advised, today's call is being recorded. But I will now hand the conference over to your first speaker today, Mr.
Ian McCown. Thank you, and please go ahead.
Good. Thanks, Myles, and welcome, and thanks to everyone on the call. We appreciate your time and your interest in TMI. So as Miles said, this is the 2020 financial year full year results for P and I. The clinical representatives on the call today are our Chair, Alan Watson Andrew Chambers, who is an Executive Director with particular responsibilities for institutional, including offshore distribution Dan Longan, our CFO and myself, Ian Macoun, MD.
You'll be welcome to direct questions to any of the four of us after I take you briefly through the presentation. So earlier this morning, we launched with the ASX and on our website an announcement letter setting out the highlights of our financial results, an investor presentation, which is about 40 slides altogether, our annual report, which includes our remuneration report and audited financial statements and notes and our Appendix 4E. We've also logged our corporate governance statement on our website. So I hope that everyone on the call has access to these documents. I'll be referring mainly to the presentation.
So Slide one sets out some disclaimers that we invite you to read. On Slide two, we have sought to summarize the main themes for the year as we see them. Now obviously, it is for the analysts and shareholders out there to reach your own conclusions on our results, but we thought we should share with you our own take on the year and how we see the condition of the company moving forward from here. We think our financial outcome was solid in the prevailing circumstances. You could use words such as reasonable or respectable.
We've chosen solid in the circumstances, although, of course, they are below our expectations at the start of the year and even what we were expecting at the start of the second half. There was a lot of action, as everyone knows, in the second half. We are encouraged that the period of diversity demonstrated the benefits of our strategies that we've been pursuing for some time now of increasing our diversity. So increasing the diversity of asset classes and investment strategies of the affiliates, the diversity of our client types and domiciles and the size and diversity of the performance fee potential of our affiliates, which came through nicely in the year. Now we're only partway through this process of increasing diversification and therefore the resilience of our company.
Indeed, we may never be finished that process, but it has produced valuable benefits already. And we believe we are entering the 2021 financial year poised to resume growth or able to react to any further external adversity that may come our way as we did in the 2020 financial year. And indeed, we stand ready to take advantage of any attractive opportunities that may materialize. So that was it there on Slide two, just sort of in a nutshell,
a
summary of how we see the year. So Slide three sets out the financial highlights of the 2020 financial year. Net profit after tax was $32,200,000 up 5.6% from $30,500,000 in the 2019 financial year. This translated into basic EPS of $0.01 8 sorry, dollars $0.01 $8.08 per share, up 2.7% and diluted EPS of $0.01 $79 up 4.7%. Pinnacle's share of the after tax profit of affiliates was $38,000,000 up 14.8% from 2019.
Now that includes $6,600,000 which was our share of performance fees earned by affiliates in the 2020 financial year compared with $3,200,000 in 2019. And it also includes our share of cooler bars after tax profit, which is about six point five months since we acquired the stake in the December 2019. We had cash and principal investments of $50,100,000 at June 30. Our $30,000,000 CBA loan facility was fully drawn in December and used to fund the acquisition of a 25% interest in Koolabah. And we have declared a fully franked final dividend of $0.85 per share, payable on the September 11.
That takes the total dividends for the year to $0.01 $54 the same as in FY 2019. Now there are a couple of footnotes on this slide that I would like to draw your attention to, a footnote one in particular. Now as I said earlier, it's for the analysts and the investors on this call to make their own decisions as to how to interpret our results. Of course, people are very welcome to simply look at the raw unadjusted NPAT of $32,200,000 and say it's up just 5.6% on last year. That's a legitimate conclusion.
I personally always adjust out the net return on our PIs to calculate an adjusted or you might say some kind of underlying profit. Footnote one does that, and it shows that adjusting for the net return on principal investments, our impact, excluding the $474,000 negative net return on PI that incurred this year, it would have been $32,700,000 which was up 17.6% on the equivalent adjusted NPAT of 27.8 in '19. Because in 2019, we actually had a positive net return of $2,700,000. So I actually adjust for return on PI as not being, in effect, an operating result, and our result is better if you do that. I've I've always done that in the past when it made our results look less of an increase on the previous year as well.
Then some people like to treat performance fees as in some way abnormal. And Footnote two shows that adjusting for our share of the performance fees of affiliates, our share of NPAT from affiliates would be $31,400,000, just up just 5% on the previous year. Now I personally don't make that adjustment at the current level of performance fees, which I don't believe that is extraordinary. And I don't make that adjustment given that 32% of our funds under management or $18,900,000,000 now attract performance fees, and we have diversified sources of performance fees. Now something like 10 of our affiliates have substantial performance fee potential.
So I would argue that we should receive material, meaningful performance fees each year. But I'm not looking to debate that right now. As I said, I'm just delivering the results with a little bit of interpretation, if I may, and hopefully that, that is helpful. Everyone can make up their own minds, as I said, about our results. Footnote three just points out our dividend yield.
So with the amount of dividends that we have declared, this represented a yield of 3.9%, grossed up to 5.6% for the franking benefit. That was based on share price at the close on June 30. The yield is more like 3% or 4.4% grossed up based on our closing share price yesterday. So that's just in a nutshell the financial highlights for the year. Slide four shows the financial results in a little more detail.
I'm not going to spend much time on this. At the top is Pinnacle Parents, revenues and expenses. Pinnacle Parent revenues were up 6.2% to $22,400,000 That included dividends and distributions on principal investments, which were lower this year than last year. Our expenses in Pinnacle Parent in raw numbers were up 18%. But if you look at footnotes two and three, I would say our well, I would say our true expenses are up hardly at all.
So footnote two points out that people's parents' expenses includes $400,000 of interest on the CBA loan. Now that's fine. That's in Pinnacle Parent, but the revenue from that expense, our share of Koolabah's profits, is in our share of affiliate profits, not in Pinnacle Parent. That distorts things a little bit. Also, as mentioned, the expenses of Pinnacle Parent includes the realized and unrealized gains, mark to market or losses.
So it was losses this year. So they're in expenses. Previous year, when it was a gain, it was a negative expense. So that all distorts the comparison with the previous year. If you take out just the adjustment for gains and losses on PI, our expenses increased by $1,800,000 or 7.2%.
If you then take out the $400,000 of interest and $700,000 of PLH and a bit of increase in noncash LTI, there was negligible change in principal parent expenses. That's more than enough talk of our numbers. The rest of this slide just shows some of those adjustments and is self explanatory. Slide five shows movements in our funds under management. I'll just call out the highlights here.
So our aggregate affiliate funds under management at June 30 were $58,700,000,000 This was up $4,400,000,000 on the June 30 last year or 8%, but that includes $3,000,000,000 that was acquired with Coolabar. So our sum is up just 1,400,000,000 on the year if you exclude the $3,000,000,000 acquired. And our sum was down $2,900,000,000 over the six months. And people would be aware that the drop in the market impacted our sum, and our inflows were lower as a result of the crisis, the virus crisis. Our aggregate retail funds under management are now $13,100,000,000 That was up from $11,600,000,000 a year ago, but down from $14,300,000,000 six months ago.
And again, the one year number includes 1,600,000,000 that we acquired with Koolabah. Our funds under management was, as I said, impacted, of course, by the sharp drop in equities markets in late February and March. The ASX was down 10.8% over the whole financial year, It was down 11.9 in the second half. The Mifkie World was flat over the full year, down 7.1% in the second half. So overall, we had decreases in our sum due to market movements.
And when we say due to market movement slash investment performance because we can't really split those, but it was basically market movements. That was during the financial year was down 1,600,000,000.0, our sum, on account of market movements, and a billion of that was retail. So that was during the financial year. In the second half, our total sum was actually down $3,900,000,000 on the half, of which $1,200,000,000 is retail. So we were quite seriously impacted by the market movements.
And finally, on this slide, we make the point that we have an increasingly diversified client base. Now more on this later, we believe this is a very favorable trend for our company and was very helpful during this crisis period. I'll move quickly through a few more. Slide six outlines our net inflows. We achieved, as I said, net inflows for the financial year of 3,000,000,000, billion of which was in the second half.
So it was 2,000,000,000 in the first half and a billion in the second half. Retail net inflows for the second half was just $19,000,000 so kind of tiny number but positive. And that was comprised of $68,000,000 of what I call sort of normal retail inflows and weak outflows, which were buybacks of $49,000,000. So these inflow numbers, of course, were much lower than in the comparable previous period. But at least, you know, we didn't have large outflows at all as many fund managers did.
It was pleasing that even in the half, we were marginally in positive territory. So we felt that shareholders would be interested in the pattern of the second half retail net flows just briefly. So in the second half, we achieved net inflows in January and then in May and June. The average net inflows for those three months was 117 a month. We experienced net outflows in February, March, and April, but fees were very modest except in March where we had the large net outflows of $238,000,000 in that one month of March.
So the half year was kind of our toughest half year we've ever had, but it was really quite concentrated in that month of March. And then overall for the half, it was just a tiny bit net inflow overall. And in institutional, we achieved net inflows of $2,100,000,000 during the year, 900 of which 900,000,000 of which was in the second half. So this was clearly lower than we had expected originally because a number of institutional operators deferred decision making. And I'm sure there'll be questions on this, and I'm sure Andrew Chambers would would like to take some time to speak to this later.
But just in summary, we had referrals of inflows that we were expecting, but we believe our institutional prospects currently remain strong. Pleasingly, this is from an increasingly diverse quiet steps. And although we make the point that institutional flows are lumpy and, you know, two swallows don't necessarily make a spring, It's nevertheless pleasing that the institutional net inflows were stronger again in May and June. So at the end of the year, we had quite strong net inflows. Slide seven, just a few points on affiliates, which I won't go through in detail.
We connect three new affiliates during the year. Two, Gulps or Horizon two, Reminiscent and ATSIA and one, Horizon three, which was the acquisition of 25% of Coolabar. And we were pleased that five affiliates earned meaningful performance fees for the year totaling $26,700,000 and our share of those of $6,600,000 in the 2020 financial year, and these were almost entirely received in the second half. Slides eight and nine seem to provide further explanation of the financial outcome for the year. Very briefly, our total affiliate revenues were $291,100,000 during the year, including the 26.7 of performance fees.
This was up 22.9% on the 2019 year or 19.4% if you want to exclude performance fees. The table on Slide eight traces the affiliate aggregate revenue down to aggregate affiliate after tax profits and then our share of that. Slide nine highlights the most significant components of the results. In Pinnacle Parent,
you
know, we we do had have a certain amount of success based and some base distribution fee revenue, which was held back due to the market dislocation in the second half with, as I've mentioned, certain deferrals of institutional allocations and lower retail net inflows. Our staff numbers didn't grow significantly during the year, and we did not make cuts to our core capabilities. We think that's very important. There were significant reductions in short term incentives. Our remuneration was restrained for the year.
We did achieve significant growth in our share of affiliate profits compared with the previous year, and there's been continuing investment in additional resourcing by several of our affiliates, including Metrix, Plato, Pharb, Antipodes, Palisade, and Spheria. And, the direct cost of these new affiliates that are not yet profitable is included as negative impact, but there's also our cost of servicing those affiliates are in the pinnacle parent costs. We don't charge those affiliates for our services until they're profitable. Slide 10 points on our balance sheet. I don't I won't particularly call out anything there.
I think people are aware that we record the value of our investments in affiliates on an equity accounted basis, essentially cost, not what one might consider a market value of them. Slide seven shows graphically the growth of our funds over the years. Really, slides seven to 11 are all about our fund. Slide 12 is and I should say the diversification of our fund. Slide 12 is for the analysts who like to see the fund by affiliates.
Every six months, we set that out, and that's where it should be examined. Slide five is the five year performance slide. This is the classic measure of long term performance that the industry considers should always be reported, and we always do report it pleasingly. 90% of our affiliate strategies and products that have a five year record have outperformed their benchmark. Short term performance will always vary, but long term performance is what matters most.
The next two slides, fourteen and fifteen, show the one year and more performance of all of our affiliates. You might get to those in question time. Slide 16 records the major industry awards that our affiliates win. We do very well in industry awards. Slide 17 is, yes, this major theme of our presentations of recent years, building a resilient, diversified business.
And happily, this came true for us in this difficult year. And we believe this diversification will continue to stand us in good stead, and this is demonstrated in the next seven slides, which provide further detail of this diversification. I won't go through them. Let's skip to slide 22. And just quickly, this shows how our revenue, our fund and our revenue, particularly from retail, has grown from 27% when we rolled up and the listed company became Pinnacle four years ago to 43% now.
And industry super funds, some people express concerns about, only represent 14% of our revenue. So no time to go into more detail on that, but we believe it shows a great trend in the diversification of our funds under management. Slide 23 there shows that retail funds have grown 14.6x over the past seven years, while our total sum has grown 5.4x. And Slide 24 shows the growth in sum that's eligible for performance fees. I mentioned before, 32% of our sum or $18,900,000,000 is all eligible for performance fees now and across quite a diversified range of affiliates.
So I'm almost to the end now. I better stop. I'll stop on Slide 25, if I may. This is the slide headed our response to the COVID-nineteen crisis. We believe that we've performed very solidly during this terrible crisis, as I mentioned.
And we've been saying for a long time this quote at the beginning of this slide that we believe that the reputations and future success or otherwise of investment management companies are often determined by their behavior and performance during periods of crisis. And their capacity to resume growth depends on the strength of the capabilities with which they emerge from such crises. So we think this is very important. This has been and still is at the forefront of our minds both prior to and during the crisis. And we're not making any predictions as to the future half of the crisis and the relative market conditions, but we are confident that we enter the new financial year poised to resume strong growth and able to respond to any further external adversity that may come our way as it did in the last half and able to take advantage of any attractive opportunities that may materialize.
Now apologies. I've gone on a bit too much. I will stop talking now and hand it back to Myles for questions. And again, please address questions to any one of the four of us.
Thank you. So ladies and gentlemen, we will begin that Q and A session. But we do have our first question on the line from John Hind from Wilson.
Just a couple of quick ones for me. In regards to fund diversification, has there been any material developments not evident to the naked eye in this result, which we should probably focus on? And perhaps an update on the progress of the recent additions to the distribution team? Where are we seeing the greatest traction? And I mean, is there an update on how successful the new members have been to date, please?
Yes. So look, I might just start, but Andrew Chambers, I'm sure, will have more to say on this. One thing that perhaps isn't too apparent in our slides is that we've had further growth in our offshore, some sourced offshore. And it's still reasonably early days, but we are very happy with the way that's traveling and the prospects there. Shane, do you want to talk to John's question?
Sure. So I would put in view that certainly we've seen some significant growth outside of Australia. During the course of the financial year, we received inflows from about 15 countries outside of Australia. So that's all all the three major regions of the globe. That's the Asia Pacific region, the EMEA region, and The Americas.
And you can find that of the EMEA region in particular. I'll be really noteworthy. We've added people during the course of the financial year in The Americas with Alison Maschmeyer based in New York City. And, also, with the responsibility of Japan, Hajini Kobayashi, who's who's come to us with community experience working for a major competitor institution. So with the business today, we have employees in all the major regions of the globe, but in The Americas, Asia Pacific region, and EMEA, and covering specialized markets such as Japan.
So we're very much operating in the business day of all of our investors and Allocators enabled to conduct business very actively. It's now being supported by very good flows. Of course, we've been buying in and out of those key global markets for over a decade now. So a lot of work had been done prior to people arriving, but these have been now capitalized on the opportunities that for our boutiques as they continue to globalize both their products, but also their presence in offshore markets. I should highlight that on one hand, one might assume the pandemic has pushed the world further away from us.
In many ways, I think it's brought the world closer to us as we've seen encouraging signs of work adaptation from asset owned consultants around the world, in workarounds through virtual due diligence. Once upon a time, you'd need to conduct on-site due diligence with the fund manager before making allocations. These days, many funds are moving to virtual due diligence workarounds, which brings Australia close to the rest of the world. So that's a very encouraging development. And, John, we did point out that we had some good net inflows in the last couple of months.
Overall, we had $1,000,000,000 of net inflows in the second half. As I mentioned, a lot of fund managers did a lot worse than that. There were outflows. We could spend more time on the sort of turmoil in the market during the period. And we can't predict what lies ahead, but it feels quite good to us coming out of the financial year at this stage.
I just made the observation that the net flows from the three major distribution channels, which is institutional, international, and retail ed, then flowed with the tide of government and central bank action. So obviously, you saw broad outflows in terms of cash accumulation, liquidity provisioning in February, March and April. But then in May, June and July, we observed significant cash deployment into risk assets by all three of those major channels. From an institutional perspective, what we've really observed has been the cumulative impact of deferred allocations, many of which have had up to have had multiyear sales cycles to the taxable portfolio rebalancing back into risk assets and new opportunities which have emerged since and in response to the crisis itself. I think you could write a summary.
Thank you. I think in the first half, you provided a fund from international investors that was invested in international pooled funds for that $4,000,000,000 Are you able to give us any color on how that's changed with it looks like some of the obviously, what you're talking to with some of the funds have had success especially in April? Is how how much has that changed?
So the number of hey. Did you want me to respond to that? Yes. Yes. Thanks.
Thanks. Yeah. So I guess a number of our key managers were able to source capital from offshore. I'd say, in particular, the standout during this period has been Resolution Capital. It's probably been the most advanced of all of our affiliates in terms of its globalization trend as it started from the point in which we we partnered with them back in 02/2007.
So that would be the most progressed. I would highlight that the $4,000,000,000 of fund that you would be noted included funds sourced in offshore funds as well as from offshore investors. So it includes potentially Australian based investors invested in offshore funds also. So the effects of institutional capital from offshore going into allocating to us from offshore investors has been probably larger than what you probably observed on the surface. We're seeing quite a bit of market interest in the likes of Antipity, the global long strategies and in a lot of our private capital managers as well and hedge fund strategies.
In terms of key locations, in terms of largest source fund would be, I would say, The Middle East and Africa, and Canada has been a significant market for us. And also, we'd highlight Japan, most recently, United Kingdom.
Great. Thanks, gents. I'll I'll jump back in the queue.
Okay. Once again, if you wish to ask a question, you can just press star one. But the next question in line, we've got from Nicholas McGarrigle from Ord. Please please ask your question, Nicholas.
Thanks, guys. And that was very well pronounced on my last name. It's probably best ever, I reckon, in my ten years of doing calls. In terms of flows, you mentioned that in late in the financial year, you saw quite strong flows. Can you just give us a sense on where that was flowing to in terms of the managers and any sort of trends, whether that's retail or institutional in terms of taking a bit more confidence in allocating at the moment?
Yeah. Well, again, I'll let Chamber talk to the institutional. But those last two months, we had nice inflows in both retail and institutional. As as Andrew Chambers said earlier, there was a a real pattern to the half. He said ebbed and flowed.
There was definitely, you know, quite major disruption in late February and March, and that appeared to have really somewhat reversed by May, June. Now as I said, these are reasonably short time frames, but that was a very clear pattern. But the inflows in May and June were both retail and institutional. And, Chandel, do you want to speak to sort of whereabouts of institutional? ResCap has been doing well, for example, but it was a number of affiliates.
Yeah. I'd highlight I mean, in addition to Resolution Capital, it'd be worth highlighting, signaling out Coolabar Capital in terms of receiving new allocations, Metrix Credit Partners also in receiving new allocations, Hyperion into its global strategy, which we've been talking to you about with investors for some time. So we're seeing very promising signs about new deployment. And I'd also highlight we're seeing similar flow increases in the retail market as well. So I think they're averaging a little over $20,000,000 net a month at the moment from retail investors into their global strategy.
That's actually Global Hyperion Global is is building in retail as well.
Sorry. What was that number a month? And what what is it sort of standing at now in terms of fund?
So about $20,000,000 of net flows. And I think about 22 would be that number if I took the average. And the total fund you can see in the pooled funds today is around that $400,000,000, I think, at last count.
Cool. And it seems like some of the affiliate affiliates really controlled their cost basis through through the last year because, obviously, the profit contribution was outsized compared to the revenue that we can see in the in the annual report. Was that a focus for the underlying affiliates?
No. I don't think I don't think our affiliates are excessively. I mean, obviously, everyone is being careful about cost in this environment. But now I called out quite a number of our affiliates that have actually added resources ahead of further growth where they're adding new strategies, Nick. So, no.
I think, their revenue was quite a bit higher. That caused their profits to be higher. I don't think it was particularly a cost control or cost reduction factor. Got it.
That's good. That's fine. The final the year numbers looked pretty solid across the board versus what I was expecting apart from Two Trees. Can you just give us a sense on what what's going on there? And then potentially some of the the long tail, you know, the long wave repairing, reminiscent, and high gear, what what they're sort of out of use for FY '21.
Yes. So when you said the end of your numbers, you mean the performance numbers?
No. No. Sorry. Just the thumb. The thumb and sort of a bit ahead of what I was expecting, which is great.
And then just comment on Two Trees.
Yeah. So Two Trees are systematic global macro, and they had won some very nice money early in their life, institutional money, which in that that turmoil period that Andrew mentioned, some of the big super funds were sort of taking money from wherever they could find it that hadn't been impacted by the equities market drop. So hedge funds hadn't dropped in value in the way equities did. And so they had some significant redemptions, from super funds that I think were looking to take cash and probably have subsequently redeployed into equities, which was quite bad luck. You know that whole hedge fund, that global macro hedge fund space has struggled somewhat performance wise during during the crisis.
Some of the big names have done very poorly. So they were that was a bit of bad luck for them in terms of losing that fund. We're hopeful it will come back again when things become more normal. Other look. We're very pleased chamber, we're very pleased with how Aetia and Remnant and Reperian are traveling along.
I mean, you won't win big money early, Nick, in days, but we're very happy with the way they're traveling. Yeah. And just to add to that, head to the asset class, particularly the hedge fund ones where it's lower for AUM that you win, but there's typically much higher margins. Whereas something like IKEA being long only, the allocation will tend to be larger, noting that the capacity is probably around about USD 5,500,000,000.0 for that, but the allocation will typically be higher than what you would see for the hedge fund or cash plot type strategy, such as Two Trees or Reminiscing Capital or Right Period for that matter, which has a bit more of a profile. That latter one more akin to Palisade given its mid market and focus, so can only deploy probably a couple $100,000,000 per annum.
The the the affiliates that are sort of newer to us that will win the large fund quickly are the established ones, like Coolabar and Metrix. And, you know, we're very pleased with the performance of both of those and with their prospects. There's no question that Metrix, in particular, lost pipeline. There was a lot of money ready to come into them that was deferred, and that was unfortunate. The NXT capital raise had to be pulled off because of the the impact of the process on the market.
So they're impacted, but we're very pleased with metrics we cool the bar and how they're traveling. Yeah. In fact, today, just to support you on so Metrix has has received three new allocations from a debt that would previously deferred their decisions since that period earlier in March. So people are resuming their activity prior to the crisis, if I comment. Some of that's in July, I think, would be in the numbers that we've put out.
That's great.
And Redcap's Redcap's also interesting. If you remember, I think Redcap has had tremendous delta and their asset class Redcap went up a lot pre crisis. We actually had quite substantial outflows from all the installs in Redcap over the last couple of years, but we've seen very strong inflows from offshore. And we'll see whether that trend in in domestic installs reverses somewhat as well. It remains to be seen.
It's really good to see, obviously, Coolbar as well adding $600,000,000 over the six months. Can you give us some context on that growth? And that sort of largely to the acquisition and the assistance from your distribution team? Or was that natural momentum that they had and given cash rates moving where they are, that they've seen a bit more uplift?
We'd love to we'd love to claim credit for our distribution genius being responsible for it. But but do do you wanna comment on on that again, Andrew? It's they're going well. They are they're doing very well. They're getting new clients and extra allocations from existing clients.
Yeah. I I think just to add to that, Ian, so there's always a sales cycle to to any partnership you have with an affiliate. So there was very good momentum for that business. There's no doubt about it. Most of the flows came from family offices and institutions, but also wealth management as well.
So it's a combination of self generated momentum, but also, obviously, assistance we've provided since. But it's the answer is it's a combination. Yeah.
That's great. And can you provide us a of an outlook? I mean, the the net overhead seem to be relatively well managed in light of the difficulties on distribution, but any sort of outlook into next year around some of the more main contributors to the Pinnacle parent revenue line, like things like LICs and material distribution, I guess, of some of the affiliates where you got those relationships. Can you comment on on that net over heading to next year potentially?
Yes. I mean, Ally fees, think, have a question mark over them in terms of certainly equity Ally fee IPOs. I think that will be quite challenged in the short term until the market adjusts to the government's new policy. We would hope to be able do some top ups of existing WICs such as Metrix especially, but it depends on market conditions. Look, it's hard to predict what the conditions are gonna be like over the next year, Nick.
We feel pretty good. Our Pinnacle Parent revenues, you know, have held up reasonably well, and we do have prospects for the more success based revenues there from the likes of Redcap and our retail, you know, our retail efforts especially. There were a number of
the folks who we think you're
gonna do well in retail going forward, including hot and global, recaps, cooler bar metrics, and so on, and they all pay us fees.
Great. I might let someone else ask a question. Thanks.
Okay. We do have another question in line from Tim Lawson from Macquarie. So please ask your question, Tim.
Just a point of clarity, I think you mentioned Metrix might have had some funding into July. So maybe I'll ask a more general question. Just of those sort of May and June, particularly institutional flow, I mean, how much of that was fully funded at thirty June and how much is sort of still in the pipeline to collect going forward?
Andrew? Yeah. So I I don't think we received any commitments that were undrawn during the balance of the financial year. So everything we're we're talking about was was fully drawn. So I think the ones that highlight in relation to metrics that come on this side of thirty of thirty June in July month.
So they're not they wouldn't be reflected in our full year numbers.
Yeah. No. I I appreciate that. But but sometimes you might get, you know, 50% funded, and then there's 50% to come. Is is there any balance that is effectively committed not in your numbers, but to be funded in July, August, September?
So so if I can just sort of answer it. So so we do know that, you know, there are a number of mandates that we've been told will be arriving in August, September, and so on. But, typically, we have team we, you know, we don't wanna make predictions of market conditions and, you know, make promises that we disappoint on. So we've been a bit cautious. But, certainly, you know, we said it feels very good going into the new year, And we certainly had a number of people who told us that we're gonna win money.
But the problem we have is that we've been in this position before. We talked about a pipeline, and then circumstances change and it gets deferred. So we tried to avoid doing that. So Yes. We're trying to give you a balanced response there, but we certainly do have money that we believe is coming in August and September.
Yes, that's fine.
I think the moderate word to use is we're quietly confident about the prospects ahead.
Yes. Okay. Just a second question. You called out, I think it was 32 and a touch percent in performance fee, fund that can attract performance fees. Just trying to think about how that's trended the last couple of years?
And also, probably more importantly, how much of that is sort of at or near a high watermark?
Yes. So it's been growing, Tim. I think it was 30 a year ago, 32%, but it had grown quite a lot up to that last year. So I think we have some slides there that show that it's grown, you know, in the last, say, four years. It's grown a great deal.
So that's a very good thing. Look. And I said it's across, like, 10 of our affiliates have quite meaningful potential performance fee contribution. So it's quite diversified as well. Obviously, the two largest are Antipodes and Fire Trail High Conviction, behind their high watermarks.
Of course, these things can turn very quickly, but they are behind, at this stage. But there's quite a lot of it. But the fact that we received performance fees in 20 means that those are all not behind their high watermarks. So if they produce further alpha, you know, they can get performance fees in the near term. There's another one.
It's a ResCap, which had 9% alpha during the year. Now its performance fees are all on its funds, which is about 900 odd million of funds, but it has a dual test, mainly retail investors. So it had very strong alpha, but it doesn't get paid performance fees if the absolute return for the year isn't positive, which it wasn't because the mark so much. But it goes into the new year. You know, we're carrying forward all of that alpha, which is a nice position to be entering the new year.
But it needs to would need to not give the alpha back and also to have positive absolute return in the year ahead. That that's just one red cap.
Does that positive absolute return reset to the level at thirty June, or does it have to make up what the lost performance for last year was in absolute sense?
It's a good question. I I think it just has to be absolute during the year, but I need to check that. I'm sorry. Okay. That's fine.
Previous.
Yeah. And just last question for me. The problem's fees, obviously, you preannounced that, but again again, was just slightly higher. Just trying to understand that was where that was from. Was it from one of the five affiliates you named?
Was it just just trying to understand the the the slight variance there.
Oh, the variance from what we preannounced?
Yeah.
Well, Dan, can can you help me with that? I think it's something to do with what we preannounced. We were trying to have a go at impact on Pinnacle overall as opposed to our share
of We have a couple of bits here. We obviously announced very early, Tim. A couple of those performance fees were on mandates. That pricing didn't finalize until a couple of weeks later, so we went with a fairly conservative estimate. And we also announced the $6,700,000 was the total impact on p and I, which includes some distribution fees associated with those distribution revenues.
The $6,600,000 is just purely our share of those performance fees through the Affiliate's profits.
Yeah. Okay. Thanks. That's all for me.
Once again, ladies and gentlemen, if you did wish to ask a question, you can just press star one on your telephone now. Okay. There appears to be no further questions at this stage. I might hand back to you for now to wrap up, Ian.
Okay. Thanks thanks very much, Miles. So, look, thanks for your participation, everyone. We could only do so much in in an hour. We we tried to draw out the scenes really at the beginning and the end of our presentation, and we're gonna have one on one meetings with lots of fund managers over the next few days.
So there'll be plenty of opportunity for further questions. Overall, a very tough half, obviously, for the whole world and for fund managers generally. But we think we've done okay in the circumstances. We are very pleased to see the benefits of that diversification really help us in a tough period, and we do feel good about moving forward. That kind of whatever conditions we might face, we feel as though we're in quite a strong position.
So, yes, that's really a summary of the year, and we look forward to speaking with major shareholders one on one.
Okay. Ladies and gentlemen, that will conclude today's conference call. Again, thank you for all participating today. You may now all disconnect.