Asset manager, Allco Finance Group (AFG) rose as much as 6% to $6.11 in early morning trade on Monday after the company said it had raised $200 million for its globally diversified transport and infrastructure fund ahead of schedule.
The broker had been on research restriction for Australian Finance Group's capital raising but returns to retain an Outperform recommendation. Funding is now in place to support book growth, the broker notes, and margin clarity has increased with funding renewal and securitisation market activity.
Australian Finance Group's residential lodgements increased 33% year on year in the March quarter and 34% in April, although the broker notes last April was benign given the bank Royal Commission and a pending election. Home loan lodgements were down -34% in April due to bank competition. Mezzanine funding has been secured to provide covenant relief.
The broker has cut its Australian Finance Group earnings forecasts by -3% out to FY25 following a review of credit, hardship and investment risk. The broker notes the company has no debt and $50m in cash.