GQG and Perpetual to overcome significant outflows: Morningstar

Despite facing significant outflows in the latter half of 2025, Morningstar remains confident in the resilience of GQG Partners and Perpetual. The research house believes that these asset managers have the capacity to withstand the current redemption pressures they are facing.

GQG Partners, a US-based fund manager, experienced nearly $4 billion in outflows in 2025, including multiple months with outflows exceeding $1 billion. This was partly attributed to the underperformance of its funds due to the firm’s cautious approach towards artificial intelligence (AI). Despite these challenges, Morningstar is positive about GQG’s long-term prospects, noting that investors are starting to overlook concerns about an AI bubble, which bodes well for the firm’s future.

The research house stated, “We believe the risk of redemptions and earnings compression at GQG – stemming from recent underperformance – is already reflected in our forecasts. Notably, our projected net outflows average 4 percent of funds under management per year through to 2029, which is below the industry average of around 0 percent for active equity managers. While near-term performance may face obstacles, we do not anticipate significant mandate redemptions. The team’s stability remains intact, and there are no reputational issues that would trigger mass redemptions.”

GQG currently manages $163.9 billion as of December 31, 2025, with positive market movements helping to offset the outflows. Morningstar acknowledged this, stating, “At $164 billion in FUM, GQG is capable of growing FUM through portfolio return compounding even if net flows are challenged. We also expect the firm’s lower-than-average fees and strong asset consultant ratings to mitigate excessive redemptions.”

In addition to GQG Partners, Morningstar also highlighted Perpetual as an asset manager offering better relative value in 2026. However, in its second-quarter financial results, Perpetual reported $7.8 billion in outflows, primarily due to a loss in an institutional global equity mandate. Despite these challenges, Morningstar believes that the market undervalues Perpetual’s future cash flows. The research house stated, “While concerns about outflows and margin compression in asset management are valid, we believe these risks are already factored into our forecasts.”

Overall, as both GQG Partners and Perpetual navigate the challenges of heavy outflows, Morningstar remains optimistic about their ability to overcome the obstacles and thrive in the long term. Despite the current redemption pressures, the research house believes that these asset managers have solid foundations and strategies in place to weather the storm and emerge stronger in the future.