Pinnacle Investment Shares Surge to Record High After U.S. and U.K. Asset Management Acquisitions

2 min read | November 21, 2024 04:06 PM AEDT | By Team Kalkine Media

Pinnacle Investment Shares Surge to Record High After U.S. and U.K. Asset Management Acquisitions — Image source: Shutterstock

Strategic Acquisitions

Pinnacle has acquired a 22.5% stake in VSS Holdings LLC, a New York-based private markets investment management firm, for $60.5 million. Additionally, the firm secured a 25% stake in London’s Pacific Asset Management for £25.75 million ($32.57 million).

These acquisitions, part of Pinnacle’s strategy to expand its global footprint, are expected to strengthen its organic growth profile and improve its competitive positioning.

Analyst and Market Reaction

Morningstar analysts responded positively to the news, praising Pinnacle's geographical diversification. They noted that the expansion would bolster the company's ability to counter competition from low-cost passive investment options.

The brokerage also raised its fair value estimate for Pinnacle’s shares to AU$13.40, up from AU$12.30.

Capital Raising and Earnings Impact

To fund these acquisitions, Pinnacle raised AU$400 million through a placement at an issue price of AU$20.30 per share, reflecting a 5.3% discount to the stock's November 19 closing price.

The company resumed trading on Thursday after a trading halt. Pinnacle stated that both acquisitions and the capital raise are expected to be earnings per share accretive on a pro-forma fiscal 2025 net profit after tax (NPAT) basis.

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