Australian Pinnacle seeks deals in struggling UK and Europe

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(Bloomberg) – Australian Pinnacle Investment Management Group Ltd. is seeking deals in the UK and Europe after the market correction made valuations more attractive for the financial group.

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“We are always looking for opportunities where we believe we can add value, whether through our capital or our infrastructure or distribution support,” founder Ian Macoun said in an interview. « We are looking in the UK and Europe. »

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Sydney-based Pinnacle operates a ‘multi-affiliate’ business model, owning minority stakes in more than a dozen companies that manage private equity, real estate, equity, infrastructure and other assets . It recently expanded into Canada with a 32.5% stake in Toronto-based Langdon Equity Partners Ltd., a small-cap equity manager.

Financial stocks have fallen this year alongside other risky assets due to a combination of soaring inflation, rising interest rates and fears of a recession. These concerns are particularly acute in Europe due to soaring natural gas prices and the prospect of energy shortages caused by Russia’s war on Ukraine.

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The Stoxx Europe 600 financial services index has fallen 29% this year as of Monday’s close. “There is a lot of stress there at the moment. Their industry as a whole is in emigration and their currency has weakened a lot,” Macoun said. « We would like to do certain things there, including retail distribution. »

Its subsidiaries include private equity firm Five V Capital Pty Ltd., boutique fund manager Plato Investment Management Ltd. and Riparian Capital Partners LLC, which focuses on water, agriculture and food investments. Pinnacle affiliates’ funds under management were A$83.7 billion ($54 billion) as of June 30, but the companies have the ability to grow well over A$300, analysts said.

« We’re very, very picky and really seek out the best investment professionals in their field across a range of different asset classes and investment styles, » Macoun said.

Pinnacle’s entry into Canada through its support of Langdon will eventually give the Toronto firm access to clients in the United States, Europe and Asia. Currently, Langdon only distributes its small cap funds in Canada and Australia. « Initially, we will expand distribution in Langdon and we will add more and more resources over time, » Macoun said.

Pinnacle shares have fallen 45% in Australia this year, but are still up around 180% over five years.