Pacific Current : 1H FY2022 Results and Investor Presentation

Tacoma // Denver // Sydney // Melbourne

ASX ANNOUNCEMENT

25 February 2022

PACIFIC CURRENT GROUP HALF YEAR RESULTS

Six months ended 31 December 2021

SYDNEY (25 February 2022) - Pacific Current Group ("PAC" or "Company") (ASX: PAC) is pleased to report the Company's interim results for the six months ended 31 December 2021.

HIGHLIGHTS

• Underlying NPAT grew 26% to A$14.6m.
• 21% growth in underlying revenues, driven by increased performance fees and commission revenues.
• Fully franked interim dividend of A$0.15 per share, up 50% from 1H21.
• FUM grew 16% to A$165b. Excluding new investment in Banner Oak, FUM grew 11%.
• GQG listed on ASX, resulting in proceeds of A$59m and a remaining stake valued at A$210m as at 31 December.
• Revenue growth achieved despite recognizing only 4 months of GQG contributions in results due to change in earnings recognition from accrual to cash.
• Invested US$35m in private real estate manager, Banner Oak Capital Partners on 31 December.

OPERATIONAL RESULTS

PAC's Underlying NPAT attributable to members for the half year grew 26% from A$11.6m to A$14.6m. This growth was fueled by a significant increase in performance fees, leading to a 21% increase in underlying revenues. Underlying expenses were flat versus the prior comparable period.

Performance fees from Victory Park increased substantially during the period, in part due to contributions from several Special Purpose Acquisition Companies (SPACs) the firm sponsored. Victory Park was the largest contributor to PAC revenues during the period and posted the strongest FUM growth rate in the portfolio.

FUM grew 16% in 1H22. Excluding the new investment in Banner Oak, FUM grew 11%. In late August 2021, PAC forecasted that its portfolio companies, excluding GQG, would receive A$3b to A$8b of gross new commitments by the end of FY23. This target was subsequently revised upward to A$5b to A$8b. After six months, PAC's non-GQG boutiques have received A$2.2b of gross new commitments.

Though underlying revenues grew significantly, management fee revenues were flat. Revenues would have been notably higher were it not for an accounting method change that resulted in PAC modifying how it recognizes GQG earnings. Post-GQG's IPO, PAC will no longer recognize GQG earnings on an accrual basis, but rather on a cash basis in the period when dividends are received. This change is a timing item that will have an impact on reported earnings only in FY22.

Specifically, for its 1H22 results PAC recognized GQG-related earnings for the four months leading up to the 28 October listing of GQG. In 2H22 PAC will recognize the interim dividend GQG declares for the last two months of CY2021 and the dividend GQG is expected to declare for the quarter ending 31 March. In aggregate, in FY22 PAC will "miss out" on recognizing two months of GQG earnings in 1H22 and one month

Pacific Current Group Limited (ABN 39 006 708 792)

Suite 3, Level 3, 257 Collins Street, Melbourne VIC 3000 Australia

www.paccurrent.comTel: [phone]

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in 2H22. In FY23, PAC will begin recognizing six months of GQG earnings in every half-year reporting period. The change in accounting method for GQG has no meaningful impact on when PAC receives cash from GQG.

The statutory result for the first half was a loss of A$16.6m. This loss stems from how the change in the carrying value of GQG is treated. Subsequent to GQG's IPO, changes in value of PAC's GQG holding (i.e., the change in the GQG stock price (ASX: GQG)) now run through PAC's income statement. The post-listing decline in GQG's stock price led to the statutory loss. Going forward, future changes in the value of GQG may have a significant impact on PAC's statutory results.

DIVIDEND

PAC declared a fully franked interim dividend of A$0.15 per share, up 50% from 1H21, reflecting PAC's stated intention to reduce the skewing in dividends between the two halves.

PORTFOLIO COMPANY HIGHLIGHTS

The listing of GQG on the ASX was the most significant development in PAC's portfolio during 1H22, which yielded PAC significant cash proceeds. These proceeds have already been redeployed through PAC's US$35m investment in Banner Oak Capital Partners, a leading private equity real estate firm based in Dallas, Texas.

From an earnings perspective, Victory Park was the standout in 1H22. The firm posted large gains in incentive fees and secured a large amount of new FUM. PAC expects the firm's business momentum to continue into FY23. EAM also secured large new commitments, primarily from a prominent Australian institutional investor.

Earlier stage investments in IFP and Astarte detracted from results, but both firms are making solid progress and should deliver improved results in FY23.

OUTLOOK

PAC management expects continued solid growth in FY22, with the potential for acceleration in growth in FY23 for the following reasons:

• In FY22, PAC will receive 9 months of earnings from GQG, while in FY23 it will receive 12 months of earnings.
• PAC's investment in Banner Oak was made 31 December 2021 and will contribute six months of earnings in FY22 and 12 months in FY23.
• PAC expects fundraising progress in 2H22 from key private capital boutiques to have a significant impact on FY23.
• Earlier stage investments are expected to produce improved results as they move to profitability.
• Management fee revenues will grow for some private capital strategies, as recently acquired FUM is invested.

According to PAC CEO Paul Greenwood, "We are excited with how our portfolio weathered the pandemic as well as the improving growth prospects we see emerging across the portfolio." Mr. Greenwood added, "Even though equity markets are off to a weak start in 2022, this should not have a big impact on PAC because of our broad diversification. Our largest exposure to equity markets comes from GQG, a firm that has historically produced its best relative performance when equity markets are weak."

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CONFERENCE CALL

Pacific Current Group would like to invite you to join our conference call to be held at 11:00am (AEDT) on Friday, 25 February 2022.

The presenters will be Paul Greenwood, MD & CEO and CIO and Ashley Killick, CFO.

INVESTOR CONFERENCE CALL DETAILS

The call will be held via webcast or conference call dial-in. Please use the links below to register ahead of the event.

Webcast (listen mode only):

https://webcast.openbriefing.com/8534/

(An online archive of the webcast event will be available approximately four hours after the webcast)

Teleconference (Pre-Registration required for Q&A Participation):

http://apac.directeventreg.com/registration/event/4571728

AUTHORISED FOR LODGEMENT BY:

Paul Greenwood

Managing Director & Chief Executive Officer and Chief Investment Officer

-ENDS-

CONTACT

For Investor & Media enquiries:

• Paul Greenwood - Managing Director & CEO and CIO

1. [e-mail]

1. ([phone]

ABOUT PACIFIC CURRENT GROUP

Pacific Current Group Limited is a multi-boutique asset management firm dedicated to providing exceptional value to shareholders, investors, and partners. We apply our strategic resources, including capital, institutional distribution capabilities and operational expertise to help our partners excel. As at 25 February 2022, Pacific Current Group has investments in 16 boutique asset managers globally.

F I R S T H A L F 2 0 2 2 R E S U LT S

PRESENTERS:

Paul Greenwood, Managing Director & CEO and CIO

Ashley Killick, CFO

February 2022

Disclaimer

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