Company Reports

Allfunds reported a first-half EBITDA of EUR 187 million, which is up 25% compared with the same period a year ago. Net flows contributed positively to assets under administration, which is a positive. Flows from existing clients had been a drag on AUA, but the trend appears to have reversed. AUA grew 9% to EUR 1.47 trillion on EUR 14 billion of net flows from customers and EUR 60 billion from market performance. The net platform revenue margin widened to 3.9 basis points from 3.6 last year. Strong growth in transaction revenue (up 33%), supported by increasing activity levels and good net treasury income (up 70%), was behind the good 16% revenue increase over the first half of the year.

Allfunds has wedged itself between fund houses and fund distributors in Europe, solving frictions for both sides utilizing its platform and generating scale benefits in the process. Fund houses, which are primarily looking to achieve a greater distribution reach for their fund products, can hardly pass up the instantaneous connection Allfunds can provide to about EUR 1.4 trillion in assets under administration and about 890 distributors on its platform. Distributors, on the other hand, are enticed by the large selection of roughly 150,000 funds from 3,100 different fund houses available for selection.

Allfunds reported a first-quarter trading update, posting a 7% increase in assets under administration versus the same period a year ago driven entirely by market performance. Positively, net flows came in nearly flat with Allfunds pointing toward a potential reversal of recent downward trends. However, the platform did see continued outflows from existing clients, which were compensated by new clients. Allfunds sees particularly strong outflows from clients in Central Europe, with the rest of Europe and the world mostly contributing positively. The development is an improvement over last year. Revenue grew 18%, primarily on higher net treasury income, which benefited from higher cash volumes. We maintain our EUR 7.20 per-share fair value estimate and narrow moat rating.

Allfunds closed 2023 with assets under administration up 7%, a good performance given 4% market growth. Growth came in the form of market performance (6%) and flows from new clients (4%) Allfunds onboarded. Existing clients withdrew funds on a net basis (4%), driven predominantly by higher interest rates and rising opportunity costs. However, higher interest rates also benefited Allfunds as the fund platform booked EUR 76.4 million in net treasury income, more than offsetting a weaker margin on platform volumes compared with a year ago. We maintain our EUR 7.20 per share fair value estimate and narrow moat rating.

We are launching coverage of Allfunds with a fair value estimate of EUR 7.2 per share and a narrow moat rating. Allfunds is a fund distribution platform connecting fund houses and distributors, creating a single access point for both sides to gain a wider reach with regard to assets under administration and fund variety, respectively. As of 2022, Allfunds had EUR 1.3 trillion in assets under administration stemming from about 860 distributors on its platform. In return, distributors gained access to about 139,000 funds from 3,000 different fund houses. Allfunds also provides ancillary services to both fund houses and distributors covering the marketing, distribution, legal, regulatory, as well as data and analytics needs arising in the fund distribution space. Allfunds derives the majority of its revenue from Italy, Spain, and France. We initiate coverage with a Standard capital allocation rating and High Uncertainty Rating.

Allfunds has wedged itself between fund houses and fund distributors in Europe, solving frictions for both sides utilizing its platform and generating scale benefits in the process. Fund houses, which are primarily looking to achieve a greater distribution reach for their fund products, can hardly pass up the instantaneous connection Allfunds can provide to about EUR 1.3 trillion in assets under administration and about 860 distributors on its platform. Distributors, on the other hand, are enticed by the large selection of roughly 139,000 funds from 3,000 different fund houses available for selection.