10 February 2017, Written by James Perkins

BLUE Sky Alternative Investments managing director Robert Shand says the company is "just scratching the surface" of its potential as the company announced a 130 per cent increase in underlying profit in the six months to 31 December.

The company revealed underlying net profit after tax (NPAT) of $10.1 million in the half year results released today, up from $4.4 million in the previous corresponding period (pcp). It is on track to grow full year underlying NPAT 50 per cent to $24-26 million in FY17.

EBITDA more than doubled to $15 million in the half year, up from $6.7 million pcp, while underlying revenue was up 53 per cent to $36.4 million.

The market has responded positively to today's announcement, and Blue Sky (ASX:BLA) is trading up 8.53 per cent at $7.380 per share at 12pm AEDT.

Shand (pictured) says the company's growth is a product of the momentum that has been building across its asset classes and pinpionts three key drivers: the mainstreaming of alternatives; institutional backers; and the company's 10-year track record - it has generated an equity-weighted composite return across its funds of 16.4% p.a. net of fees in that time.

"Long-term trends have seen investors increase their allocation to alternatives and we are benefiting from the same structural tailwinds as global alternative asset managers such as Blackstone and Partners Group," says Shand.

"Australia's funds management industry has $2.8 trillion under management, and with alternatives forecast to be our largest asset class within a decade, the opportunity in front of us is enormous."

The company now has $2.7 billion worth of fee paying assets under management, after adding $1 billion in the past 12 months, and it expects to raise AUM to between $3.1 and $3.3 billion by the end of FY17.

It is aiming to reach $5 billion AUM by 2019, and in the long-term double that to $10 billion.

The fund's institutional backers, which include Australian superannuation fund First State Super, Goldman Sachs, and LGIAsuper, have increased their investment in the company and now account for 37 per cent of fee-earning assets under management, compared to 25 per cent one year ago.

Shand says this institutional backing allows the company to move more quickly in securing new opportunities.

"These investors are world class and highly sophisticated they are about as good as it gets when choosing investments and considering what to do with them. To have them involved is a great endorsement of the team and what we do," he says.

The increase in funds under management pushed management fees up 36 per cent to $18.4 million, while performance fees grew to $9.3 million from $8.2 million.
Shand says the real highlight of the results is that they have been so broad based.

"We have good investment returns generated across our asset classes, substantial growth in investment performance and a balance sheet that is incredibly robust," he says.
Blue Sky also announced it would add two independent directors to its board by the end of February.

Business News Australia
Author: James Perkins Connect via: Twitter LinkedIn





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