ASX All Ordinaries Index (ASX: XAO) financial share GQG Partners Inc (ASX: GQG) has shown a remarkable performance this year.
Over the past 12 months, the United States-based asset manager's share price has surged by 86%, outpacing the All Ords index's modest 6% rise during the same period.
Since its initial public offering (IPO) in October 2021, GQG Partners shares traded below the IPO price of $2 for the first two years, reaching a low of $1.32 in November 2023. From there, the share price more than doubled to its current price of $2.85 as the company's assets under management (AUM) continued to grow.
What drove the strong share price growth?
GQG Partners is an active asset management company specialising in equity investments across four categories: international, global, emerging markets, and US shares. The company is led by experienced stock picker Rajiv Jain, who serves as both chief investment officer and executive chairman.
The significant increase in share price can be attributed to rapid growth in AUM. In its latest update for June 2024, GQG Partners reported a surge in total AUM to US$155.6 billion. Net inflows nearly doubled to US$11.1 billion in the first six months of 2024, compared to US$6.2 billion for the same period the previous year.
In his interview with the Australian Financial Review in February 2024, GQG Partners CEO Tim Carver highlighted its superior investment returns and its relatively low fee structure compared to its peers as key success factors.
In addition, the company boasts a high insider ownership. Company insiders, including management and employees, own more than 75% of the company. Jain is the largest shareholder, with a 70% holding.
At the annual general meeting (AGM) in May 2024, Jain said:
An important part of this is being co-investors. Not only are we majority shareholders in the business, but our team has invested meaningfully in our strategies alongside our clients.
As the largest shareholder in GQG, I remain aligned with you in my expectations that the executive team will remain completely focused on delivering value to our clients, and thereby creating long-term shareholder value.
What do experts say about GQG Partners?
Goldman Sachs rates GQG Partners a buy with a target price of $3, indicating a 5% upside from here. The broker's analysts believe GQG shares' valuations are still attractive compared to those of its peers, considering the company's strong growth.
Fund manager Blackwattle sees GQG's valuations as undemanding, as my colleague Tristan highlighted. In its portfolio update, the investment team at Blackwattle said that GQG Partners still screened cheaply compared to its peers.
The fund manager pointed out that the 10-year average price-to-earnings (P/E) ratio of listed asset management companies is 16x. At the current share price, GQG Partners shares are valued at 13x on S&P Capital IQ's FY25 earnings estimates.
The GQG Partners share price is down 0.87% at the time of writing trading at $2.85.
