The SEEK Ltd (ASX: SEK) share price is in focus today after the company provided an update on its SEEK Growth Fund, with new arrangements aimed at boosting liquidity for investors and reducing SEEK's stake in the Fund over time.
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What did SEEK report?
- The SEEK Growth Fund enters Stage 2 from 1 November 2026 with revised terms approved by unitholders.
- Investments have been classified into Core Assets (valued at $1.25 billion) and Non-Core Assets ($499 million as of September 2026).
- New incentive arrangements mean the Fund Manager's carried interest is only payable if at least $840 million of liquidity is made available to investors, including approximately $700 million for SEEK.
- Total management fees paid by SEEK to the Manager will drop to around $17 million per year, with $5 million in fees on SEEK-managed assets now removed.
- Since 2021, the Fund has delivered a 12% return on investment, with distributions representing 13% of invested capital.
What else do investors need to know?
Stage 2's arrangements focus on maximising long-term value and providing substantial liquidity to SEEK and other Fund investors, mainly through potential near-term sales of assets valued at over $1 billion. The revised structure also aims for a disciplined approach, incentivising the Manager to deliver liquidity by setting a clear threshold tied to carried interest payouts.
SEEK will not contribute further capital to the Fund, aligning with its wider goal of gradually reducing its current 83.8% stake. The company also highlighted that future management fees are benchmarked to market rates, providing cost savings compared to the Fund's earlier phase.
What did SEEK management say?
CEO and Managing Director Ian Narev said:
Our priority is, and has always been, to maximise the value of our investment in the Fund and receive liquidity over time. Since the Fund was established, it has delivered a 12% return on investment, with distributions representing 13% of invested capital, despite challenging macro conditions and valuation pressure across the sector. This performance has been underpinned by revenue growth across the portfolio, particularly among the HR SaaS investments. SEEK and the Fund remain fully aligned on these objectives, and we are confident the revised arrangements provide a pathway to near-term liquidity. Linking the Fund Manager's incentives to returning capital to investors and establishing a clear liquidity threshold for carried interest, supports a disciplined approach to realising value for all investors. We believe this provides an enhanced framework to pursue strong investment outcomes while delivering meaningful liquidity to SEEK.
What's next for SEEK?
Looking ahead, SEEK's focus is on supporting and realising value from its Core Assets, which remain central to the Fund's strategy of generating returns above 20% per annum. With no further capital injections planned, SEEK expects its ownership in the Fund to decline progressively as asset sales occur.
The company will keep evaluating its stake and participating in the evolving Fund arrangements, while continuing to manage key assets directly, including Zhaopin and JobAdder. Governance arrangements for the Fund remain unchanged.
SEEK share price snapshot
Over the past 12 months, Seek shares have declined 54%, trailing the S&P/ASX 200 Index (ASX: XJO), which has declined 3% over the same period.
