GQG’s (ASX.GQG) funds under management fell to USD 149 billion as of September 2026, down 11% from USD 167 billion a year earlier.

Why it matters: The decline reflects clients pulling money from an underperforming manager, and we expect that to persist across our five-year forecast. We think GQG’s large FUM base makes outperformance harder, and plentiful alternatives make lost clients hard to win back.

  • Recent redemptions have run worse than we forecast, so we lift our projected net outflow rate to about 22% of FUM a year. We forecast FUM falling to about USD 80 billion by 2030, below the roughly USD 90 billion year-end average since 2018.
  • FUM rose from USD 18 billion at end-2018 to USD 164 billion at end-2025, and that rapid rise leaves funds vulnerable to outflows. We also trim our fee assumption to 0.45% by 2030 from 0.48%, modest as GQG already charges less than most active equity managers.

The bottom line: We cut our fair value estimate for no-moat GQG to AUD 1.05 per share from $1.50, after raising projected outflows and trimming fees. We think shares are fairly valued, with net profit forecast to fall about 60% by 2030 from 2025.

  • We raise our Uncertainty Rating to Very High from High. GQG’s rapid growth creates a very broad range of outcomes, and with earnings resting on such a large fund base, investor redemptions can swing annual profit sharply.

Between the lines: It’s very difficult to say with confidence where GQG’s funds will sit five years from now. Our forecast decline is significant, but still supports net profit of about USD 200 million in 2030, below the roughly USD 225 million average from 2018 to 2025.

  • Cost-outs partly buffer FUM and fee declines, and we assume no incentive pay by midcycle. It was 37% of 2025 staff costs: discretionary bonuses, set partly on performance, and sales commissions, paid on money raised.
  • If poor performance and outflows persist, fixed pay and share awards will be the levers needed to retain staff.

We reduce our GQG fair value estimate on persistent redemptions

GQG Partners is a boutique manager of listed equities. As of September 2026, GQG manages around USD 149 billion for institutional, wholesale, and subadvised clients.

GQG predominantly manages global, US, ex-US, and emerging-market equities, with a relatively small exposure to private markets. The firm has a blended investment style for its equity funds: It is willing to pay up for quality growth firms, but also holds stocks trading at lower valuation multiples. GQG’s portfolios are concentrated and don’t resemble their benchmarks. Its strategies tend to outperform more during downturns than in bull markets.

The firm is in the early innings of expanding out of its core US market, growing its distribution in Australia, Canada, and the Middle East. It is particularly focused on exploiting the growth of Australia’s superannuation system. It also intends to grow its number of wholesale and subadvised mandates. More than 80% of funds under management are US-centered. Over 70% of FUM are less-sticky institutional and subadvised money.

Management prioritizes organic growth over acquisitions. Rather than proliferating its offerings, GQG would sell new products only when its research efforts can be leveraged, with minimal incremental investment. For example, its concentrated global strategy is a subset of its global equity offering. The firm deliberately undercuts competitors on pricing and boasts below-average fees.

We expect aftertax profits on a gradually declining trajectory. Our base case is that GQG’s relative performance continues to stay challenged, and for redemptions to continue, with FUM held up by the compounding of market returns.

Investors should brace for periods of uneven performance given GQG’s portfolio and product concentration. The lack of product variety means GQG has limited levers to stem net outflows. GQG remains highly reliant on co-founder Rajiv Jain, so the group has much to lose if it cannot retain his services.

Bulls Say

  • GQG’s stronger long-term performance record could still support new mandate wins.
  • The firm is better placed than most active managers to withstand fee compression thanks to its highly competitive fee structure.
  • There is further room for GQG to defend earnings. Penetration in certain strategy categories remain low, and it’s in the early innings of distributing outside the US. Its sheer scale of FUM means that earnings can grow from just compounding market returns.

Bears Say

  • Shareholders’ fortunes are largely tied to the efficacy of GQG investing style, which may not always outperform. GQG lacks the fundamental building blocks (like sufficient diversity in asset classes and products) that can help it attract and retain FUM more consistently.
  • Key person risk is relatively high at GQG. This is not just in comparison to large scale managers or holding companies, but also other boutique managers.
  • GQG’s clients are predominantly institutional and subadvised clients, who are less tolerant of underperformance and can terminate mandates at short notice.

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