Pacific Current : 2023 Annual Report

LIMITED

FY2023 KEY HIGHLIGHTS

FUM across the Group (up from $169b)

$204b

Comparable dividends (from 38 cps)

38cps

"Fair Value" of Net Assets per Share (up from $11.15)

$11.92

Underlying EBITDA steady (from $35.6m)

$35.3m

Dear fellow shareholders,

The last financial year was one full of important highlights and achievements. At the portfolio level, we evaluated a large number of investment opportunities and made an investment in Cordillera Investment Partners, LP. We believe this investment will create significant value for Pacific Current Group Limited's ("PAC") shareholders. We have also supported the sale of Proterra Investment Partners Asia PTE. Ltd ("Proterra Asia"), a subsidiary of one of our boutiques, at a price we found compelling. The most noteworthy development occurred after 30 June 2023, when we received unsolicited interest to acquire PAC's business - a development we believe provides support for our view of our business being fundamentally undervalued.

At the portfolio level, we have seen solid progress across key boutiques. Of particular note have been the achievements at GQG Partners Inc. ("GQG Inc"), Banner Oak Capital Partners LP, and Proterra Investment Partners, LP ("Proterra"). These firms have helped fuel management fee revenue growth of 13% across the PAC portfolio. This revenue is relatively stable and forms the basis for even stronger revenue in FY2024.

Disposals of our holdings may provide the strongest proof set on our view of the value of our holdings, as the proceeds received upon selling assets have generally been well above PAC's estimates of fair value. We have seen it with Aperio Group, LLC, Investors Mutual Limited, Rare Infrastructure Ltd, and at the initial public offering of GQG Inc. This experience gives us confidence in the conservatism with which we value the portfolio.

Admittedly, we have struggled to convince enough people of PAC's inherent value as the trading share price has not, to date, approximated the fair value of our portfolio. That situation has now led to indications of interest in a potential acquisition of PAC and the start of a competitive process. As has always been the case, the goal in a competitive process would be to realise for shareholders the latent value we have always believed the company possessed. An Independent Board Committee ("IBC") has been established to manage this process, given several Directors have or may have potential conflicts.

PAC is a very enjoyable business of which to be a part. The people involved in the business are capable and work hard to find new and exciting investment opportunities. The businesses we invest in are delivering great outcomes for their clients and our shareholders. Most importantly, PAC has also shown that it is a highly effective allocator of capital.

In closing, the achievements made during the year continue to confirm that the PAC team has considerable skills in identifying and acquiring holdings in exceptionally capable funds management teams and businesses. A team ably led by Paul Greenwood. We are very appreciative of the continued hard work of the PAC team.

We are hopeful for a great outcome for shareholders. Either way, the outlook for FY2024 is positive and exciting.

Regards