GQG Partners (ASX:GQG) Made Record Profits and the Stock Dropped 27%- Here’s What Investors Are Missing

GQG Partners Shares Slide Despite Record Profits

GQG Partners (ASX:GQG) is one of the most puzzling stories on the ASX right now. The stock has fallen roughly 27% over the past year, yet the business just posted its best results ever. Shares jumped nearly 8% on Friday to A$1.74 after the record numbers dropped, a sign the market is starting to wake up to the disconnect. Earnings grew 7.3%, funds under management (FUM) hit a record US$163.9 billion, and the company is running at a 77% operating margin, a level most businesses can only dream of.

As of January 2026, FUM stood at US$165.7 billion, and management estimated it had recovered to approximately US$172 billion by mid-February, near the record high reached in June 2025. So why is the market treating this like a broken business? We believe the answer comes down to two concerns that, while legitimate, have been blown out of proportion.

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Why the Market Turned on GQG Partners

It all started in late 2024 when Adani Group founder Gautam Adani was indicted by US authorities over alleged bribery charges. GQG had invested around 4-6% of its total funds into Adani companies, and the news spooked investors. The share price dropped 20% almost overnight, and institutional clients began pulling money out.

The second issue is performance. Chief Investment Officer Rajiv Jain made a conscious call to avoid the AI and tech stocks that powered markets in 2025. That meant GQG’s US Equity strategy lost 5% for the year while tech-heavy indices soared. But here’s what often gets overlooked: the International Equity strategy returned a strong 20.8%, and more than US$110 billion of the firm’s money delivered double-digit returns. The underperformance was limited to GQG’s smallest strategy, not a company-wide problem. In our view, the sell-off has run well ahead of reality.

What the FY25 Numbers Actually Show

Look past the share price, and the business is in excellent shape. Revenue came in at US$808 million, up 6.3% on the prior year. Net profit reached US$463 million, and GQG paid out 90% of that to shareholders, delivering a full-year dividend of US$0.1469 per share. At Friday’s closing price of A$1.74, that translates to a trailing yield of nearly 13%, which is extraordinary for a profitable, growing company.

The balance sheet is equally strong. Cash rose to US$133 million with zero debt. This is not a business under financial pressure.
The concern worth watching, however, is fund outflows. GQG Partners lost US$3.9 billion in net outflows during 2025, and January 2026 saw another US$4.2 billion leave. Strong investment returns have more than offset the withdrawals so far, but seven straight months of outflows above US$1 billion is a trend that needs to stabilise.

The Investor’s Takeaway for GQG Partners

At around 8x trailing earnings with a 13%-plus yield, GQG Partners is priced as if the business is in serious trouble, but the numbers say otherwise. Analysts have a consensus target of A$2.43, suggesting roughly 38% upside from here. The Adani situation appears to be fading, and FUM continues tracking near record levels.

The key risk is concentration. Rajiv Jain owns approximately 70% of the company and drives both investment strategy and client confidence. If his contrarian, defensive positioning keeps underperforming a momentum-driven market, outflows could drag on longer than expected.

We believe GQG Partners looks undervalued for patient investors comfortable with short-term noise. The combination of a clean balance sheet, double-digit yield, and near-record FUM suggests the market is pricing in a worst-case that hasn’t arrived. The single most important thing to watch from here is whether outflows stabilise. If they do, this stock could re-rate meaningfully.