Pinnacle expects much lower net share of performance fees

Oksana Patron

12 December 2022

Pinnacle Investment Management Group has advised that it expects its net share of performance fees to be potentially less than $1 million compared with $6.4 million for the corresponding period ending 31 December, 2021.

In the announcement to the Australian Securities Exchange (ASX), the firm said that “several strategies which had potential to produce performance fees during the six month period outperformed their benchmarks but earned nil or lower performance fees as they entered the period behind the relevant high-water marks”.

“In some cases, style-related performance below benchmark was the reason performance fees have not been earned,” the firm said.

“Performance fees are expected to be higher in the second half as additional strategies have the potential to deliver performance fees over the full 12 month period.”

The update followed a review of affiliate investment performance relative to benchmarks and high-water mark levels as at 30 November for those strategies that have the potential to deliver performance fees during the first half each year.

Pinnacle also emphasised that the performance fees estimates were preliminary, formed without the knowledge of performance during the majority of the month of December, 2022.

“Shareholders should note that performance can vary significantly over short periods of time. From a longer term perspective, over the five years to 31 October, 2022, 85% of Pinnacle affiliate strategies which have a track record exceeding five years have outperformed their benchmarks.”