Generation Development Group falls 20% after FUM growth misses expectations
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The news: Generation Development Group shares plunged as funds under management growth came in lower than investors expected despite subsidiary Evidentia Group and Generation Life posting 30% and 35% year-on-year growth respectively.
The numbers: At 2:48pm AEST, shares in GDG had fallen 20% to $3.68.
Morningstar analyst Shaun Ler cut his fair value estimate from $4.80 per share to $3.70 due to lower managed account growth forecasts, further fee compression in investment bonds and an expected rise in the cost of capital.
The context: Evidentia Group ended the March quarter with $34.8 billion in funds under management while generation life finished the period with $5.3 billion in funds under management.
Ler said that while GDG is still gaining market share, it is doing so at a slower pace than expected and previous “aggressive growth targets” are now considered unachievable.
The date of completion for the transition of the Xplore portfolio into the HUB24 platform has also been delayed to May 2026. It was previously expected to be completed in March.
The sources: ASX, Morningstar Research
