Pinnacle profits up amid heightened expenses

Despite heightened expenses of $95.3 million in FY26, reflected by losses from its principal investments, Pinnacle Investment Management (ASX: PNI) saw its net profit after tax (NPAT) surge to over $30 million, with affiliates' funds under management (FUM) also gaining $50 billion, in the 12 months to June end.

Pinnacle recorded a 31% increase in NPAT to $176.7 million in FY26. When adjusting for the acquisition of Pacific Asset Management (PAM) and net gains/losses on investments, NPAT was $138 million.

Meanwhile, the aggregate of affiliates' FUM was $229.4 billion as at 30 June 2026, up $26.9 billion since December end and $50 billion over the 12-month period.

The firm tied the success to continued medium-term outperformance across many affiliates - 81% of five-year affiliate strategies have outperformed their respective benchmarks over the five years to 30 June 2026, Pinnacle said.

Affiliate fund management revenues, at 100%, grew by $251.6 million, or 28%, over FY25.

Net inflows for affiliates was $33.4 billion in FY26, while Pinnacle's domestic retail and international inflows were $10.2 billion and $12.3 billion, respectively, in the same period.

Notably, diluted earnings per share (EPS) was 78.1 cents, up 25% from 62.4 cents in FY25, while the final dividend per share was 31 cents, franked to 65%, taking total dividends for the financial year to 60 cents, in line with FY25 total dividends of 60 cents.

The group said the result reflects strong earnings performance and outlook, as well as substantial growth in capital invested during FY26 attributed to a "significant" profit on the 'step-acquisition' of the balance of PAM it did not previously own.

"There were also net overall losses on our principal investments, including interest cost, of $7.5 million, compared with net gains of $20.2 million in FY25," the firm said.

Additionally, performance fees dipped slightly in FY26 from 12 affiliates ($35.6 million) compared to the $46.6 million contributed to the prior financial year.

Commenting, Pinnacle managing director Ian Macoun said the company continues to deliver high rates of growth attributed to its business model and the 'three horizons' growth strategy.

"This platform has supported strong growth to date and provides multiple pathways for further growth, including in larger international markets where we have demonstrated that the Pinnacle model can operate successfully," Macoun said.

"During FY26, we saw that deliberate diversification working both at the Pinnacle and affiliate levels. Net inflows were robust across all three channels. The performance fee outcome was meaningful despite significant shifts in performance across asset classes and styles, demonstrating that performance fees can contribute significantly each year across cycles."

He added the acquisition of PAM positions the business for better future opportunities.

"Its high-calibre leadership team has built an impressive platform, underpinned by advanced technology. Together, Pinnacle and PAM create a larger and more flexible global distribution capability which expands both the scale of our offshore opportunity and certainty of its execution," Macoun said.