Investing in (ASX) shares is one of the best things Australians can do for their long-term wealth. We can do it with as little as $500 – it's not like buying property which usually cost a minimum of tens of thousands of dollars to make an investment (not to mention stamp duty, legal fees and so on).
For someone just starting out with ASX shares, there are a wide range of potentially attractive opportunities such as ASX blue-chip shares and exchange-traded funds (ETFs).
But, if I were given $500 to invest I'd likely choose a slightly different option – I'd pick an individual company with good growth prospects. I'm excited by the potential of quite a few S&P/ASX 200 Index (ASX: XJO), including the one below.
Pinnacle Investment Management Group Ltd (ASX: PNI)
Pinnacle is a company that's heavily involved in the funds management industry. It takes minority stakes in affiliates (fund managers) and helps them grow. It only chooses to partner with affiliates that can demonstrate growth potential and whose management teams have strong track records.
Some of the fund managers that it's invested in include Hyperion, Plato, Resolution Capital, Solaris, Antipodes, Spheria, Firetrail, Metrics, Coolabah Capital, Aikya, Life Cycle, Five V and Pacific Asset Management.
Aside from having the backing of Pinnacle, these affiliates benefit from the various services the ASX share can provide including seed funds under management (FUM) and working capital, distribution and client services, fund administration, compliance, finance and legal, technology and other infrastructure.
With its significant exposure to local and global asset markets, the Pinnacle share price has suffered from the recent share market volatility. At the time of writing, it's down 16% this month and it has dropped 35% since the August 2025 high.
Declines of this size can be attractive (with a high-quality ASX share) as a cyclical opportunity to buy when it's low and benefit from the likely confidence recovery at some point down the line.
In FY25, the business saw affiliate FUM growth of 63% year-over-year to $179.4 billion, partly thanks to net inflows of $23.1 billion over the 12 months. The rest of the growth came from investment performance of the funds. This helped Pinnacle net profit rise 49% in FY25.
In the first quarter of FY26, Pinnacle saw FUM rise another 10% to $197.4 billion at the end of September 2025 compared to June 2025. Total net inflows for the quarter were $13.3 billion.
I think the company's decline has been overblown considering its impressive underlying growth of FUM and earnings. The ASX share continues to add to its portfolio of fund managers, boosting its long-term growth potential.
According to the forecasts on Commsec, the Pinnacle share price is valued at 22x FY26's estimated earnings, 18x FY27's estimated earnings and 15x FY28's estimated earnings.
For me, this looks like a great time to buy a growing ASX share at an appealing valuation with continued solid FUM inflows.
