Level 35, 60 Margaret Street Sydney, NSW 2000 29 August 2017 PO - PDF document

Level 35, 60 Margaret Street Sydney, NSW 2000 29 August 2017 PO Box R1313 Royal Exchange NSW 1225 www.pinnacleinvestment.com.au By Electronic Lodgement The Manager Company Announcements Office ASX Ltd 20 Bridge Street SYDNEY NSW 2000 Dear Sir/Madam Pinnacle Investment Management Group Limited (ASX:PNI) – FY2017 financial highlights  NPAT from continuing operations attributable to shareholders of $12.0 million, up 108% from $5.8 million in the prior year  Earnings per share from continuing operations of 8.1 cents, up 56% from 5.2 cents in the prior year  NPAT attributable to shareholders of $13.1 million, delivering earnings of 8.9 cents per share  Share of NPAT from Pinnacle Affiliates of $17.6 million, up 10.5% from $15.9 million  FUM of $26.5 billion at 30 June 2017, up 34% from $19.8 billion at 30 June 2016 ($27.0 billion at 31 July 2017)  Fully franked final dividend of 4.8 cents per share payable on 6 October 2017 and the Board has introduced a 0% discount dividend reinvestment plan, commencing with this final dividend  Cash and Principal Investments of $42.5 million as at 30 June 2017 P NI’s Chairman, Alan Watson, commented: "The 2017 financial year marks the first year of the Pinnacle Group's operation as a pure listed funds management operation. Both Pinnacle itself and our Affiliates have had a successful year, which is evidenced by growth in Affiliates ’ FUM and revenues which has led to Pinnacle showing a 56% increase in earnings per share from continuing operations. This allowed shareholders to participate in 112% growth in ordinary dividends compared to 2016. At the end of the year we had a strong and flexible balance sheet, which together with a robust platform, allows us to believe that we are well positioned to continue to grow." P NI’s Managing Director, Ian Macoun commented: “Pinnacle’s focus during the year was again on continuing to support each of our Affiliates and assisting them to grow their business and profitability. The quality of the Affiliates was affirmed and again demonstrated, including by the investment returns they produced and the strength of market interest and support for their investment offerings, resulting in record FUM and FUM inflows. Growth in retail FUM has been particularly significant. Our business has become further diversified with the strong early success of our two newest operating Affiliates, Antipodes and Spheria. ” 1

Composition of Group’s Results The profit after tax from continuing operations attributable to shareholders for the 2017 financial year was $12.0 million, reflecting earnings per share of 8.1 cents compared with 5.2 cents per share in the previous corresponding period. Profit from discontinued operations for the 2017 financial year was $1.1 million, primarily due to the payment received from Wilsons Advisory for use of the deferred tax asset transferred on separation, delivering an overall NPAT attributable to shareholders of $13.1 million. The 2017 financial year saw strong performance in Pinnacle’s affiliated investment managers, with record FUM and FUM in flows achieved. Pinnacle’s share of net profit after tax from its equity interests in Affiliates was $17.6m, up 10.5% from the previous year. Revenues within Pinnacle itself continue to grow satisfactorily, and cost efficiencies were generated following the simplification of the business. FY2017 FY2016 Pinnacle Affiliates (100% aggregate basis) FUM ($billion) 26.5 19.8 Revenue ($million) 128.3 92.8 Net profit before tax 62.7 51.5 Tax expense (19.1) (14.9) Net profit after tax 43.6 36.7 FY2017 FY2016 Pinnacle Revenue 10.9 8.4 Expenses (16.4) (15.8) Share of Pinnacle Affiliates net profit after tax 17.6 15.9 Net profit before tax (NPBT) from continuing operations 12.1 8.5 Minority interests (0.1) (2.6) NPBT from continuing operations attributable to shareholders 12.0 5.9 Taxation - (0.1) NPAT from continuing operations attributable to shareholders 12.0 5.8 Discontinued operations 1.1 (1.3) Total profit attributable to shareholders 13.1 4.5 Earnings per share: From continuing operations 8.1 5.2 Total attributable to shareholders 8.9 4.1 2

Pinnacle Affiliates – FUM Growth 1 Pinnacle Affiliates – Revenue Growth 2 1 Pinnacle FUM includes 100% of FUM managed by Pinnacle’s Affiliates . 2 Revenue shown is 100% of all Pinnacle Affiliates’ revenue. This is shown to indicate trend and excludes revenue derived by Pinnacle itself. 3

Capital Management and Principal Investments On 30 January 2017 Pinnacle completed a placement of $30 million (pre expenses) via an underwritten placement to institutional and sophisticated investors at $2.40 per share, a discount of 2% on the then market price. Pinnacle intends to utilise the additional capital to support its strategy to grow FUM and profitability through organic growth from its existing investment affiliates, supporting the creation of new investment managers, and making acquisitions when attractive opportunities which satisfy its criteria arise. Until required, additional capital is being invested in order to maximize returns at appropriate levels of risk and support Pinnacle’s existing Affiliates. The Group holds investments in equity securities and unit trusts. At 30 June 2017, the Group had invested $29.8 million in strategies managed by its affiliates. The Group has hedged approximately 65% of its total exposure to movements in the underlying indices. During the year to 30 June 2017, the Group earned a net $1.2 million on its Principal Investments , on a ‘marked to market’ basis. Net Tangible Assets increased to $75.7 million, up from $49.6m. The Group continues to have no corporate borrowings. Legacy operations Following the sale of the Group’s formerly owned securities business (now Wilsons Advisory), Pinnacle may receive some modest additional value for deferred tax assets and/or a future profit share in relation to the 2017 and/or 2018 financial years. During the year, Pinnacle received a payment from Wilsons Advisory of $1.2 million relating to the 2016 financial year. Pinnacle also, however, has a contingent liability relating to its historical ownership which is running off over time. Pinnacle has completed the payment of certain staff related costs, run off insurances and other items related to the securities business. Dividend The Board declared a fully franked interim dividend of 2.2 cents per share, paid to shareholders on 17 March 2017. The Board has also declared a fully franked final dividend of 4.8 cents per share, payable on 6 October 2017 to those shareholders recorded on the register at 22 September 2017. Priorities for the 2018 financial year  Maintain the current strong momentum  Our people are key – exceptional individuals who have chosen our business model and culture – will sustain the environment to continue success  Remain focused on delivering continued strong investment performance  Continued growth in FUM including retail FUM  Develop offshore distribution efforts  Organic Growth and new initiatives within Affiliates  Continue to assess selected new Affiliate opportunities  Continue to invest in activities that will deliver substantial long-term value 4

FY17 results teleconference Investors and analysts are invited to attend a teleconference with Pinnacle’s Chairman, Alan Watson, and Pinnacle’s Managing Director, Ian Macoun, who will discuss the results and answer questions. Please note that the Pinnacle FY17 results call on 29 August 2017 will be available via teleconference only. There will be no live audience. Date: Tuesday, 29 August 2017 Time: 9.00 am (AEST) If you would like to join via teleconference, please use the following dial-in numbers: Dial in numbers: Australia (02) 8373 3582 International +61 2 8373 3610 Conference ID 58949770 Please contact Ian Macoun on +61 2 8970 7700 if you require any further information. Yours faithfully Calvin Kwok Company Secretary +61 2 8970 7718 5

Pinnacle Investment Management Group Limited Annual Results Discussion for the year ended 30 June 2017 29 August 2017

Agenda  2017 Financial Highlights  2017 Business Highlights  Group Overview  Year in Review - Pinnacle Affiliates - Pinnacle  Group Strategy and Priorities for FY2018 1

2017 Financial Highlights  NPAT from continuing operations attributable to shareholders of $12.0 million, up 108% from $5.8 million in the prior year  Earnings per share from continuing operations of 8.1 cents, up 56% from 5.2 cents in the prior year  NPAT attributable to shareholders of $13.1 million, delivering earnings of 8.9 cents per share  Share of NPAT from Pinnacle Affiliates of $17.6 million, up 10.5% from $15.9 million  Fully franked final dividend of 4.8 cents per share payable on 6 October 2017  0% discount dividend reinvestment plan introduced, commencing with this final dividend  Cash and Principal Investments of $42.5 million as at 30 June 2017  Doubling in the share price from $1.45 at the start of the financial year to $2.90 at 30 June 2017 (TSR: 110%) 2

2017 Business Highlights  Record FUM, FUM inflows and Affiliate Revenues  FUM $26.5 billion* at 30 June 2017 - up $1.5 billion (6.1%) from 31 March 2017; - up $3.2 billion (13.7%) from 31 December 2016; and - up $6.8 billion (34.3%) from 30 June 2016  Net inflows $4.9 billion for the year, including $2.5 billion retail  Two LICs raised in excess of $300m each  Pinnacle Affiliates continue to win Industry Awards *$27.0 billion at 31 July 2017 3