Search ASX code:
Generic filters

Search ASX code:
Generic filters

Search ASX code:
Generic filters

Search ASX code:
Generic filters

Pinnacle Investment (ASX:PNI) share price on watch after Winston Capital acquisition

The Pinnacle Investment Management Group Ltd (ASX: PNI) share price will be on watch this morning after the business acquired Perth-based Winston Capital Partners.

PNI share price

Source: Rask Media PNI 1-year share price

Who is Winston Capital?

Winston Capital is an administration and distribution firm specialising in raising capital for new boutique funds.

The business also supports retail distribution and managing regulatory and communications.

In a lot of ways, Pinnacle and Winston are similar business’s, with both taking the administrative burden off fund managers to allow them to focus on investment returns.

What are the terms of the acquisition?

Pinnacle will acquire 100% of the Winston business for an undisclosed amount. Subsequently, four sales executives from Winston will join the Pinnacle retail distribution team.

Winston’s founding partners Stephen Robertson and Andrew Fairweather will also join Pinnacle.

Head of Retail at Pinnacle Ramsin Jajoo said:

“This is an important investment in the continued expansion of Pinnacle’s retail distribution capabilities that will deliver our multi-affiliate network additional resourcing across Australia and help in bolstering our entire Group’s ability to scale and grow”.

Why did Pinnacle acquire Winston?

The acquisition provides Pinnacle with on-the-ground access to Western Australia for the first time.

Pinnacle will also be able to leverage the relationships of Winston to bring its 16 boutique affiliates to new retail markets.

Any other news that could affect the Pinnacle share price?

Pinnacle also reaffirmed its announcement to acquire an additional 10% stake in one of its affiliates, Coolabah Capital Investments.

This brings Pinnacle’s total ownership to 35%.

What next for the Pinnacle share price?

Its been a cracking year for Pinnacle shareholders, with the share price up 136% in 2021.

The company recently announced a 108% jump in profits led by a big spike in performance fees from seven of its affiliates.

Pinnacle flagged further growth going forward, which has the market valuing shares on an eye-watering 49x price-to-earnings ratio.

My take

The Pinnacle share price is largely unmoved today on the news, which isn’t too much of a surprise.

It’s a bolt-on acquisition that didn’t even mention the purchase price. Nor was it classed as market sensitive.

Pinnacles share have run very hard in 2021, so I wouldn’t be jumping in straight away. When valuing fund managers, I prefer to model just the management fees, which are recurring in nature leaving the performance fees as a bonus.

If you’re looking to learn how to do your own ASX company valuations, take our free share valuation course, which takes you through 6 common share valuation techniques, step by step.

Or try our Beginner Shares Course if you’re just starting out. Both are free.

The Rask analyst team has launched its most ambitious investing mission of all time...

Find (and buy) Australia's 10 best small-cap shares.

Our analysts have identified 10 ASX shares that could potentially return multiples of the initial investment over the next 10 years. But make no mistake, this mission isn't for the feint of heart. It's a high-risk mission for serious investors only.

The Rask Rockets program is our most advanced, most highly valued ASX investor research service.

And guess what, we've given away 1 free Rask Rocket Beyond share idea, plus one of our best Rask Rockets Apollo mission companies and another one of our top stock ideas from Rask Invest -- all FREE! You can get the stock ideas by listening to a recent episode of Australian Investors Podcast, as part of our Beyond re-opening sale.

Just click here to get the names and ASX stock ticker codes of 3 of our team's best stock ideas.
At the time of publishing, Lachlan does not have a financial or commercial interest in any of the companies or funds mentioned.

Information warning: The information on this website is published by The Rask Group Pty Ltd (ABN: 36 622 810 995) is limited to factual information or (at most) general financial advice only. That means, the information and advice does not take into account your objectives, financial situation or needs. It is not specific to you, your needs, goals or objectives. Because of that, you should consider if the advice is appropriate to you and your needs, before acting on the information. If you don’t know what your needs are, you should consult a trusted and licensed financial adviser who can provide you with personal financial product advice. In addition, you should obtain and read the product disclosure statement (PDS) before making a decision to acquire a financial product. Please read our Terms and Conditions and Financial Services Guide before using this website. The Rask Group Pty Ltd is a Corporate Authorised Representative (#1280930) of AFSL #383169.

LIVE ASX Chat - Join in!

Play Video

Keep reading: