GQG Partners Inc (GQG) – Robust results

GQG Partners Inc is a Florida-based fund manager whose clients include insurance funds, pension funds, sovereign wealth funds, ultra-high net worth investors, sub advised funds, financial advisors, wealth management administration platforms, private banks, and other discretionary wealth managers. The company was founded in 2016 and is based in Fort Lauderdale, Florida.

GQG Partners (GQG) recently reported net inflows of US$1.8 billion ($2.8 billion) in March and US$4.6 billion for the March quarter, a result Ord Minnett views as an impressive outcome given the tumultuous time for markets in the first three months of the year (and since). Total funds under management (FUM) rose to a record US$161.9 billion as at 31 March but, on our numbers, the continued market volatility since then would have reduced FUM to circa US$150 billion as at 7 April.

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Pleasingly, defensive positioning meant GQG’s portfolios outperformed their benchmarks in the year-to-date in the global equity, international equity and US equity strategies. Only its emerging markets strategy lagged its benchmark. Post the result, we have cut our EPS estimates by 12%, 16% and 15% in FY25, FY26 and FY27, respectively, as we mark-to-market for FUM, which leads us to cut our target price to $3.00 from $3.30.

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Despite these EPS downgrades, however, our number still show an EPS compound annual growth rate of 9% over the CY25–CY27 horizon and a more than 10% dividend yield in CY25 and CY26. This underpins our view of GQG Partners as a high-quality fund manager that is undervalued even allowing for the current market volatility, and we reiterate our Buy recommendation on the stock.