GQG Partners, an asset manager headquartered in Florida, actively manages a range of global equity funds. The firm generates most of its revenue from management fees, calculated as a percentage of its funds under management. The fund manager shed over $10 billion in funds last month, following Chief Investment Officer Rajiv Jain’s surprising pivot into chip stocks, a strategy complicated by renewed tensions in the Middle East. GQG’s total asset pool has now plunged by $US23.7 billion, nearly 14 per cent, from its peak of $US172.9 billion recorded in late February.
Mr. Jain, known for betting against consensus, had previously warned that tech companies had created a bubble larger than the dotcom bust. Earlier this year, he described the booming artificial intelligence trade as “dotcom on steroids,” leading him to avoid tech stocks for a period. However, last month, GQG aggressively cut exposure to “old world” industries like utilities to invest heavily in technology shares, including Alphabet, Microsoft, Amazon, Apple, and Nvidia, which now constitute about a quarter of its flagship Global Equity Fund. This pivot coincided with market sell-offs in some of these tech giants and a rout in the semiconductor sector.
The latest monthly update revealed that GQG’s funds under management fell to $US149.2 billion. Net outflows contributed $US4.3 billion to last month’s $US7.2 billion decline, while investment performance added losses of $US2.9 billion. GQG chief executive Tim Carver noted that some investors chasing performance were now reversing course as the firm’s relative performance lagged. This stretch of underperformance saw GQG earn just $US630,000 in performance fees in the first half of the financial year, a 95 per cent drop from the prior corresponding period. Shares in GQG tumbled nearly 7 per cent on Friday to below $1.15 and are down 36 per cent for the year, significantly below its 2021 ASX offer price of $2.
