Performance fees are increasing as a component of the Pinnacle Investment earnings, to 33% from 17% in FY16. Macquarie suggests the earnings capacity and outlook are under appreciated.
In respect of institutional mandates the company pursues a deliberate strategy of favouring performance fee structures over a base fee only mandate.
In addition, Macquarie expects growth from existing affiliates can support upside. Outperform retained. Target rises to $10.11 from $9.48.
Sector: Diversified Financials.
Target price is $10.11.Current Price is $9.00. Difference: $1.11 – (brackets indicate current price is over target). If PNI meets the Macquarie target it will return approximately 11% (excluding dividends, fees and charges – negative figures indicate an expected loss).