Shares of funds management business Pinnacle Investment Management Group Ltd (ASX: PNI) skidded into a voluntary trading halt today as the company seeks to raise more than $60 million to make acquisitions.
Pinnacle Investment Management is a Sydney-based funds management business specialising in partnering with high-profile investors to run managed funds.
This morning, Pinnacle updated the market on its recent financial performance revealing that the total amount of money managed by its affiliates grew more than 43% during its 2018 financial year. Combined, Pinnacle’s partners manage around $38 billion.
For the year to June 30th, Pinnacle expects to report a profit of $23.1 million, up from $12 million last year.
Acquisitions of Omega & Metrics Credit Partners
Pinnacle announced it will acquire 40% of Omega Global Investors and 35% of Metrics Credit Partners for up to $4 million and $46 million, respectively.
Metrics Credit Partners provides credit to corporate borrowers and offers investors access to the inter-bank lending market.
“We at Pinnacle have observed MCP in operation at ‘close quarters’ as their distribution partner for approximately 5 years,” Pinnacle Managing Director Ian Macoun said. “Their offerings do not overlap with those of existing Pinnacle Affiliates and the acquisition diversifies Pinnacle’s portfolio of Affiliates.”
Omega Global Investors was started by former Vanguard employees and is an investment business focused on smart-beta, multi-asset and other investments. It manages $4.2 billion of funds.
To fund the deals, Pinnacle said it will raise $60 million from institutional investors by selling shares at $5.50. In addition, eligible smaller shareholders can subscribe for up to $15,000 of new shares via a Share Purchase Plan, which could raise $10 million. The funds will in part be used to pay for the acquisitions and new growth initiatives.
Pinnacle expects its ASX shares to return to trade on Wednesday, July 25th.