MutualFundWire.com: As Earnings Rebound, a $4B-AUM Boutique Hunts

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Wednesday, August 4, 2021

As Earnings Rebound, a $4B-AUM Boutique Hunts

A publicly traded, boutique mutual fund firm's team continues to hunt for M&A targets as the firm's size and profitability bounce back from lows earlier in the COVID-19 pandemic.

Teresa Mariani Nilsen
Hennessy Advisors, Inc. / Hennessy Funds
President, Chief Operating Officer, Director / Executive Vice President, Treasurer

"We maintain a healthy balance sheet and are happy to share our prosperity with our shareholders via our quarterly dividend," Terry Nilsen, president and chief operating officer of Hennessy Advisors, Inc. [profile], states in the Novato, California-based asset manager's fiscal Q3 2021 earnings report, which was released this afternoon after the market closed. (Hennessy Advisors' fiscal Q3 2021 ended on June 30.) "We continue to pursue opportunities to build Hennessy Advisors for future success, through both organic growth and strategic partnerships."

Neil Hennessy, chairman and CEO of his eponymous fund firm, puts the firm's growth in the context of a 6.5-percent rise last quarter in U.S. GDP thanks to what he sees as "strong underlying fundamentals." He predicts that "wage increases and improved production output" will offset "headwinds caused by short-term supply chain issues and labor shortages."

Hennessy Advisors brought in $8.527 million in net revenue last quarter, up 7.5 percent from fiscal Q2 2021 and up 23.7 percent year-over-year. Net income rose 19 percent in the quarter and 26.4 percent year-over-year. And cash (and cash equivalents) rose 22.3 percent in the quarter and 61.2 percent year-over-year.

Hennessy's AUM reached $4.118 billion on June 30, 2021, up 2.4 percent from March 31, 2021 and up 17.9 percent year-over-year. Th firm's average quarterly AUM (which is more directly related to revenue and the like) reached $4.151 billion last quarter, up 5.9 percent from the previous quarter and up 20.4 percent year-over-year. Meanwhile, Hennessy's own share price rose 11.4 percent in the quarter, and 26 percent year-over-year, to $9.30.

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