An employee share plan has cost HFA a maiden profit as a listed entity with the absolute return manager revealing an almost $11 million loss in its first annual report since joining the ASX in April.
However, Brett Howard, HFA chair, said in the report that the loss of $10.8 million was only slightly more than the projected shortfall of $10.5 million with its underlying net profit of $7.9 million falling $1 million short of the prospectus forecast. “The one-off cost of $19 million for the employee share offer resulted in a net loss after tax of $10.8 million… The result was achieved on total revenue of $35.5 million,” Howard said. HFA’s underlying profit was also affected by an increase in the investment management fees it pays to its US hedge fund partner Lighthouse following a renegotiation of the terms in May. According to the original HFA prospectus projections, Lighthouse was to receive 40 per cent of management fees leading to a forecast of $16.3 million that would have been paid to the US manager. Following the May increase, Lighthouse actually received $17 million in fees from HFA over the year. Of the $35.5 million revenue, over $21 million was garnered from asset management fees and almost $13.5 million in performance fees. As at June 30 this year HFA reported total funds under management at $1.56 billion – an increase of 113 per cent on the previous year. HFA will pay a 1.5 cent dividend on October 31. The HFA share price was at $1.78 at the close of trade yesterday – down 2 cents for the day.
Hostplus chief investment officer Sam Sicilia has declared that for as long as he and chief executive David Elia are overseeing the $110 billion fund, there will be no investment internalisation. However, he acknowledges that if the institutional asset manager business model comes too much under pressure, it poses risks and instability to Hostplus’ externalisation model.
Darcy SongSeptember 10, 2024
