Navigator Global Investments Limited (ASX:NGI)
ASX Appendix 4E
For the year ended 30 June 2024
Results for announcement to the market
Amounts in USD’000
Results in brief
(all comparisons to the year ended 30 June 2023)
30 June 2024
Revenue from ordinary activities
Up
49%
to
276,284
Earnings before interest, tax, depreciation and amortisation
Up
73%
to
94,805
Adjusted Earnings before interest, tax, depreciation and amortisation1
Up
85%
to
90,507
Profit from ordinary activities after tax attributable to members
Up
87%
to
66,305
Net profit for the period attributable to members
Up
87%
to
66,305
The increase in profit and Adjusted Earnings is primarily driven by incremental earnings associated with the Strategic Portfolio of
investments (‘the Portfolio’). A transaction to complete the acquisition of the full ownership in the Portfolio settled on 3 January 2024, and
this entitled the Group to 100% of the distributions received from the Portfolio during the 2024 financial year.
30 June 2024
cents
Basic earnings per share (cents) – statutory basis (based on the weighted
average number of shares on issue over the period)
Up
16%
to
16.62
1 Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) is a non-IFRS financial information and is not subject to audit procedures, and
does not represent profit in accordance with Australian Accounting Standards. This measure is intended to show the Group’s performance before the impact of
non-operating items such as changes in fair value of financial assets and liabilities and non-recurring items. Refer to table on page 2 for reconciliation of
EBITDA to Adjusted EBITDA results.
Dividends
Amount per
ordinary share
Franked
%
Conduit
foreign
income %
Final 2023 dividend per share (paid 6 October 2023)
US 3.0 cents
0%
100%
The directors have determined an unfranked interim dividend of US 3 cents
per share (with 100% conduit foreign income credits).
The dividend dates are:
Ex-dividend date:
Record date:
Payment date:
12 September 2024
13 September 2024
27 September 2024
NGI dividends are determined in US dollars. However, shareholders will receive their dividend in Australian dollars. Currency conversion will
be based on the closing foreign exchange rate on the record date of 13 September 2024.
Dividend Policy
The Company dividend policy is to pay a final dividend of US 3 – 4 cents per share which will be unfranked but may have conduit foreign
income credits attached. The payment of dividends will be subject to customary corporate, legal and regulatory considerations. This policy
allows the NGI Group to continue directing a significant portion of cash generated from operations toward supporting the continued growth
of the business.
The Board will continue to review the dividend policy in respect of the Group’s future cash flow commitments and requirements. The
payment of dividends will be subject to corporate, legal and regulatory considerations. A dividend reinvestment plan does not operate in
respect to dividends of the Company.
Net tangible assets
30 June 2024
30 June 2023
Per ordinary share
USD 111.34 cents
USD 121.70 cents
Net tangible assets have been impacted in the current year by a significant issue of the Company’s shares during the period. The Group’s
right-of-use asset recognised under AASB 16 Leases are included in the Net tangible assets calculated.
Navigator Global Investments Limited (ASX:NGI)
ASX Appendix 4E
For the year ended 30 June 2024
Results for announcement to the market (continued)
Details of joint ventures and associates
30 June 2024
30 June 2023
Longreach Alternatives Ltd
34.06%
34.06%
GROW Investment Group
5.40%
5.84%
Reconciliation to Adjusted EBITDA 1
30 June 2024
30 June 2023
Amounts in USD’000
Earnings before interest, tax, depreciation and amortisation
94,805
54,742
Additional cash payments made for office leases (net)
(4,350)
(3,121)
Changes in fair value of assets and liabilities
(3,450)
(4,380)
Non-recurring revenue, transaction costs and debt restructuring expenses &
advice
2,427
863
Equity settled share based payments
1,075
839
Adjusted Earnings before interest, tax, depreciation and amortisation1
90,507
48,943
1 Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) is non-IFRS financial information and is not subject to audit procedures, and
does not represent profit in accordance with Australian Accounting Standards. This measure is intended to show the Group’s performance before the impact of
non-operating items such as changes in fair value of financial assets and liabilities and non-recurring items.
Additional Appendix 4E requirements can be found in the Directors’ Report and the 30 June 2024 Annual Report and accompanying notes.
This report is based on the 30 June 2024 Annual Report (which includes consolidated financial statements reviewed by Ernst & Young).
2024 ANNUAL REPORT
Navigator Global Investments Limited
and its controlled entities
ABN 47 101 585 737
Securities Exchange Listing
Navigator Global Investments Limited
shares are listed on the Australian Securities Exchange
(ASX Code: NGI)
Website
www.navigatorglobal.com.au
Directors
Michael Shepherd
Nicola Meaden Grenham
Suvan de Soysa
Sean McGould
Stephen Darke (appointed 30 October 2023)
Lindsay Wright (appointed 7 November 2023)
Marc Pillemer (appointed 28 February 2024)
Cathy Hales (resigned 30 October 2023)
Company Secretary
Amber Stoney
Registered Office
Level 21, 10 Eagle Street
Brisbane QLD 4000
Principal Office
Level 3, 9 Sherwood Road
Toowong QLD 4066
+61 7 3218 6200
Share Registrar
Link Market Services Limited
Level 12, 680 George Street
Sydney NSW 2000
Locked Bag A14
Sydney South NSW 1235
1300 554 474
+61 2 8280 7111
www.linkmarketservices.com.au
Auditor
Ernst & Young
Level 51, 111 Eagle Street
Brisbane QLD 4000
Navigator Global Investments Limited
2024 Annual Report
Page 1
CONTENTS
Unless otherwise indicated, the numbers in this annual report have been presented in US Dollars (USD)
2024 Snapshot
2
Letter from the Chairman
3
Letter from the CEO
5
Directors’ report
7
Lead auditor’s independence declaration
38
Consolidated financial report
39
Directors’ declaration
89
Independent auditor’s report
90
Shareholders information
96
Navigator Global Investments Limited
2024 Annual Report
Page 2
Notes
1.
This is an unaudited non-IFRS measure and is intended to show the Group’s core operating performance. Refer to page 11 for
further details
2.
AUD Adjusted EBITDA is converted at an average AUD:USD exchange rate for the 12 months to 30 June 2024 of 0.6557.
3.
Firm level AUM represents the aggregate AUM of all partner firms without adjusting for NGI’s level of ownership in each firm
4.
Ownership-adjusted AUM represents the sum of Navigator’s proportional ownership applied to each partner firm’s AUM. AUD
ownership-adjusted AUM has been converted at a 30 June 2024 AUD:USD exchange rate of 0.6657.
2024 Snapshot
Adjusted EBITDA1
85% on pcp
USD 90.5 million
AUD 138.0 million2
Adjusted EBITDA margin
42% in pcp
53%
Firm Level AUM3
5% on pcp
USD 74.9 billion
AUD 112.5 billion
Ownership-adjusted AUM4
3% on pcp
USD 26.2 billion
AUD 39.4 billion
Navigator Global Investments Limited
2024 Annual Report
Page 3
Letter from the Chairman
Dear Shareholders
Navigator Global Investments Limited (“Navigator”
or “NGI”) undertook another transformative
transaction during this year, completing the
acquisition of all remaining interests in the six
managers stakes acquired in 2021 from Blue Owl,
two and a half years ahead of the original
scheduled settlement date.
This was an important transaction which
significantly contributed to stronger financial result
for the 2024 financial year, and which has allowed
Navigator to strengthen its balance sheet and put
in place a credit facility which will support our
ability to execute our growth strategy through
additional investment activity.
Early settlement of the 2026 redemption
liability
Under the terms of the transaction, Navigator
early settled its existing 2026 obligation with its
major strategic shareholder, GP Strategic Capital
(“GPSC”, a platform of Blue Owl (NYSE: OWL) to
acquire these remaining interests in the NGI
Strategic Portfolio. The transaction delivers the
full earnings of the NGI Strategic Portfolio two
years earlier than under the previous deal terms,
and for the 2024 financial year this equated to an
additional $34.3 million of distribution income
earned by Navigator.
The transaction received strong support from
shareholders, with 95% of votes cast at the
Annual General Meeting held on 27 October 2023
in favour of the transaction. Once all required
regulatory approvals were obtained, the Company
completed a non-underwritten entitlement offer
which had a 93% take up rate. As a result of the
transaction, Navigator issued a total of 245 million
new shares, 178 million of which were issued to
GPSC Affiliates. Following settlement of the
transaction, GPSC Affiliates’ has a voting interest
of 46.3% in the Company and a 52.2% economic
interest in the Company.
Financial results
Navigator delivered a record Adjusted EBITDA for
2024 of USD 90.5 million, an 85% increase on the
prior year result. Taking into account all the
convertible notes and the shares on issue as at
the end of financial year (unweighted), this
equated to a 2% increase in Adjusted EBITDA per
share to US 16.5 cents per share.
The business performed strongly over the last
financial year despite the ongoing market
volatility. These market conditions have proven
the value of our diversified portfolio of partner
firms, demonstrating how this largely uncorrelated
group of high-quality global businesses can
deliver strong financial outcomes for our
shareholders across varied global market
conditions.
In accordance with our stated dividend policy, the
Board has determined that a dividend of US 3.0
cents per share will be paid in relation to
Ordinary Shares and the Convertible Notes on
27 September 2024.
Senior leadership team
Following the announcement of the transaction,
Navigator implemented some key changes to the
leadership team to both augment our senior
resources, and allow a greater focus on both the
Lighthouse and NGI Strategic businesses. We
believe that this strengthening of senior executive
team ensures that Navigator is well placed to
execute on future growth initiatives.
We welcomed a new NGI CEO, Stephen Darke, in
October 2023. Stephen has an extensive
background in the alternative asset management
sector. Being based in Sydney, he brings an
increased presence in Australia to facilitate pro-
active local engagement, deepening Navigator’s
bandwidth for executing our strategy.
With Stephen’s appointment, Sean McGould, who
previously acted as both Navigator and
Lighthouse CEO, has refocussed his role around
the continued evolution and expansion of the
Lighthouse business. Lighthouse’s hedge fund
products have the opportunity to continue to build
scale, and to develop additional products that will
add to our success. We thank Sean for his
leadership over the past 15 years, as his vision
has been key in evolving Navigator into the
diversified platform of alternative managers that it
is today. Sean continues in his role as an
executive director of the Navigator Group, and
remains a significant shareholder.
At the beginning of the financial year Ross
Zachary was appointed as NGI Chief Investment
Officer and is Head of NGI Strategic Investments.
Having commenced with Navigator in 2016, Ross
has been instrumental in the Company
establishing the NGI Strategic business by
identifying and executing what have been
transformative transactions over the past several
years, and continues to oversee the portfolio and
explore opportunities for Navigator to diversify and
grow through acquisitions.
Navigator Global Investments Limited
2024 Annual Report
Page 4
Board and governance
The Board has seen some changes over the past
year, with a number of new directors appointed
over that time.
With his appointment as Navigator CEO, Stephen
Darke was also appointed a director in October
2023. Joining the Board at that time is new
independent non-executive director, Lindsay
Wright. Following the early settlement of the
redemption liability, Marc Pillemer joined the
board in March 2024 as a nominee director of
GPSC Investor in accordance with their rights
under the Shareholder Agreement in place with
the Company.
Cathy Hales resigned her director position in
October 2023 in order for her to undertake a full
time executive role at another organisation.
Whilst her time at Navigator was relatively short,
we are grateful for the knowledge and expertise
she bought to the Navigator board during her
tenure, and whish her the best in her future
endeavours.
The board currently comprises seven directors
based around the world, four of whom are
independent. Its members represent a broad
range of skills and experience which are important
for supporting sustained growth of the Navigator
business and continuing to diversify our exposure
across the alternative asset management sector
globally.
Pursuing our strategy for growth
The strong momentum of the Navigator business
is made possible through the efforts of our
dedicated staff, who continue to demonstrate
focus and drive to achieve results for
shareholders. The Board extends our
appreciation for all the hard work which has led to
another successful year in the Navigator growth
story. It is exciting to see the continuing evolution
and growth of our business. We also thank our
new and existing shareholders for supporting us
during what has been an eventful year in our
growth.
Michael Shepherd, AO
Chairman
27 August 2024
Navigator Global Investments Limited
2024 Annual Report
Page 5
Letter from the CEO
Dear Shareholders
FY24 has been a year where Navigator has
continued to progress its goal to build the leading
ASX-listed alternative asset management firm,
exclusively focused on partnering with leading
asset managers globally.
Having joined the business in October 2023, I am
excited to have joined such a dynamic team and
look forward to helping to shape Navigator’s
continued growth and success.
Our business model of owning a diversified
portfolio of established and high-quality managers
(Partner Firms), enabled us to deliver a record
profit result in FY24, ahead of our upgraded
guidance. We also completed the
transformational acquisition of the full interests in
the NGI Strategic Portfolio that establishes a
strong platform for continued growth for Navigator
in FY25 and beyond.
Assets under management
Assets under management (AUM) and
sustainable investment performance underpin the
profitability of any asset management business.
This year, Navigator’s ownership adjusted AUM
grew by 3% on FY23 to USD 26.2 billion.
The key driver of growth was investment
performance, with our partner firms delivering
strong relative and absolute returns, continuing
their successful long-term track record.
The capital raising environment was challenging
across the industry, particularly in the second half
of the year, and despite the strong investment
performance achieved by our Partner Firms, net
inflows were modest.
NGI Strategic Investments
NGI Strategic Investments Division, established in
2021, comprises minority interest stakes in the
management companies of high quality alternative
asset managers.
As at 30 June 2024, NGI Strategic Investments
had USD 58.3 billion of aggregate AUM,
representing USD 10.4 billion of AUM to the NGI
Group on an ownership adjusted basis.
The 4% increase in aggregate AUM over the 2024
financial year was driven by strong investment
performance, whilst organic growth of the NGI
Strategic Portfolio managers was more
challenged, with net outflows in the second half.
This is reflective of broader fundraising conditions
in the alternative asset sector, especially in liquid
alternatives.
It is important to consider Partner Firm growth
across a long timeframe, with most of the NGI
Strategic Investments’ strategies having lengthy
institutional sales cycles.
Our Partner Firms are well placed to add AUM
through new mandates and product launches over
the medium term. During the year we saw the
establishment of new strategies across the
portfolio.
The strong investment performance by our
Partner Firms in the first six months of the 2024
calendar year creates a strong foundation to
deliver another year of good performance and
profit distributions. Market volatility is typically
beneficial for quality alternative investment firms
to generate returns, particularly hedge funds.
Operating result
NGI Strategic Investments delivered a strong
result to the Navigator Group with Adjusted
EBITDA of $68.6 million, representing a margin of
94% on its total revenues.
NGI Strategic Investments earned $73.0 million of
distribution income for the year, up 130%
compared to $31.8 million in the prior year. This
increase was driven by the additional $34.3 million
received from the six managers in the NGI
Strategic Portfolio following the settlement of the
transaction on 3 January 2024.
In addition, higher distributions were received
from our Private Markets partner firms, which
delivered $11.5 million this year (2023: $5.0
million), demonstrating resilient performance in
what have been some challenging conditions for
the US real estate market.
This was a robust result and represents a third
year of strong, consistent profit distributions by
our NGI Strategic Partner Firms. With the
aggregate amount of distributions received for the
2024 financial year being above our initial
expectations, it highlights the value of portfolio
diversification, as well as the earnings power that
a well constructed portfolio of quality asset
alternative asset managers can generate for
shareholders.
Lighthouse Investment Partners
Lighthouse Investment Partners, LLC
(‘Lighthouse’) is a USD15.8 billion global
diversified alternative asset management firm with
more than two decades of delivering competitive
risk-adjusted returns and innovative solutions to
investors.
While overall AUM growth was relatively flat at 2%
for the financial year, the Lighthouse business
delivered Adjusted EBITDA of $25.7 million, an
increase of 18% on the prior year, and reflecting
an operating margin of 26%.
Navigator Global Investments Limited
2024 Annual Report
Page 6
Underpinning this result was $84.2 million of
management fees, a 10% increase on the prior
year. Lighthouse also saw an improvement in
performance fees, earning $11.9 million for the
2024 financial year, an increase of 72%.
Lighthouse continues its business transformation
towards hedge fund strategies, which has resulted
in growth in management fee yield. As the
business continues to evolve, we expect the
proportion and quantum of AUM in Hedge Funds
to continue to increase, generating higher
management fees scaling the potential for
performance fees.
Lighthouse is focussed on both developing new
products, as well as ensuring client retention and
growth in its legacy strategies. Lighthouse has
maintained positive relationships with clients
associated with that business and continues to
focus efforts to deliver even greater value across
the firm to those relationships.
The strong 2024 calendar year performance to
date across its strategies should support organic
AUM growth over the medium term, even in a
challenging fundraising environment.
Compensation trends
The alternative asset management sector,
particularly for United States based firms, is a
highly competitive space for attracting and
retaining talent, with increased competition for
high performing portfolio managers and Chief
Investment Officers of multi strategy platforms.
This is particularly the case for those with track
records generating risk-adjusted returns.
In light of these competing market dynamics,
Lighthouse has been reviewing its remuneration
arrangements resulting in increased
compensation for the Lighthouse investment
team, including for the Lighthouse CEO, to bring
them in line with market. This also reflects
Lighthouse’s improved financial results and strong
investment performance.
Outlook
Both our NGI Strategic Investments and
Lighthouse businesses are well placed to continue
to grow and to deliver sustained operating results.
With our proven track record, strong balance
sheet and flexible credit facility in place, we are
actively evaluating opportunities for new
investments which will further diversify our
portfolio of Partner Firms, delivering additional
and resilient earnings and cash flow to our
business.
This is an exciting time for Navigator. We are
providing growth capital structure solutions for
alternative asset managers globally, operating in
an environment with significant secular tailwinds.
I am excited to be on this journey with our
shareholders as we continue to grow and
maximise value. I am confident in the trajectory of
Navigator and, on behalf of the management
team, thank you for your support as shareholders
over the past twelve months.
Stephen Darke
Chief Executive Officer
27 August 2024
Navigator Global Investments Limited
Operating and financial review
Page 7
.
DIRECTORS’
REPORT
Navigator Global Investments Limited
Operating and financial review
Page 8
The Directors present their report together with the financial statements of the Group comprising
Navigator Global Investments Limited (‘Navigator’ or ‘the Company’) and its subsidiaries for the
year ended 30 June 2024 and the auditor’s report thereon.
Board of Directors
The Directors of the Company at any time during the interim period and up to the date of this report are as follows:
Director Name
Position
Date appointed
Date resigned
Michael Shepherd
Independent Chairman & Non-executive Director
16 December 2009
Stephen Darke
Executive Director & NGI Chief Executive Officer
30 October 2023
Sean McGould
Executive Director & Lighthouse Chief Executive Officer
3 January 2008
Nicola Grenham
Independent Non-executive Director
8 October 2020
Suvan de Soysa
Independent Non-executive Director
22 September 2021
Lindsay Wright
Independent Non-executive Director
7 November 2023
Marc Pillemer
Non-executive Director
28 February 2024
Cathy Hales
Independent Non-executive Director
22 March 2022
30 October 2023
Company secretary
Ms Amber Stoney BCom (Hons) CA holds the position of company secretary. Ms Stoney has held this position for much of her tenure at
Navigator, specifically for the periods 15 March 2007 to 20 November 2008, 18 July 2011 to 9 May 2016 and from 27 June 2016 to the present.
Ms Stoney is also the Chief Financial Officer of Navigator.
Principal Activities
The Group’s strategy is to invest in a range of diversified alternative asset management companies, through partnering with leading
management teams who operate institutional quality businesses globally. The minority interest investments held complement the provision of
investment management products and services to investors globally through wholly owned subsidiary Lighthouse Investment Partners, LLC.
Navigator operates a business which is broader and more diversified than ever before. Our performance is driven by high quality earnings
diversified across product, client type, geography and positioned with the financial resources and capabilities to drive strong long-term growth.
Our focus is on sectors of the asset management industry experiencing strong growth and high barriers to entry.
is dedicated to partnering with well established alternative
investment firms globally
Navigator
Navigator Global Investments Limited
Directors’ Report
Page 9
We look for opportunities which provide exposure to asset management businesses for our shareholders and look to achieve this with flexible
ownership and operating structures. After two very active years of making minority stake investments in alternative asset managers, Navigator
provides access to the earnings of a range of high quality managers to complement our inhouse hedge fund business:
Lighthouse
Hedge Fund
Solutons
Investment Strategy: A hedge fund that strategically allocates capital to unaffiliated
investment managers and Lighthouse’s platform hedge fund strategies.
Investment Services: Providing managed account services globally to institutional investors
with turnkey solutions customised to their needs.
Hedge Funds
Investment Strategy: An equity based absolute return strategy with a low correlation to
public equity markets.
Investment Strategy: An absolute return strategy with multi-portfolio managers that focuses
on macro discretionary and systemic strategies.
NGI Strategic Investments
NGI Strategic Portfolio
Investment Strategy: Core competencies in public and private credit, collateralized loan
obligations, and event-driven equities.
Investment Strategy: A global, alternative investment management firm operating across a
broad range of derivatives-based strategies with a deep understanding of volatility.
Investment Strategy: Global quantitative and systematic asset management firm applying a
scientific approach to finance.
Investment Strategy: Discretionary Global macro strategy using top-down fundamental
approach.
Investment Strategy: Global commodities specialist platform with exposure to energy,
metals and agricultural sectors.
Investment Strategy: Global alternative investment manager focused on specialty finance
opportunities within asset-backed credit, whole loans, real assets, and related strategies.
Private Markets
Investment Strategy: US based asset manager specialising closed-ended private equity
style funds which provide capital solutions for high quality multifamily developers and
operators in markets experiencing population growth and undersupply of housing.
Investment Strategy: US based asset manager specialising in opportunistic credit strategies
across the spectrum of real estate debt investments, including high-yielding and distressed
bonds and loans.
Investment Strategy: Australian based asset manager specialising in a variety of alternative
asset classes such as private credit, energy, sustainable seafood and quantitative market
neutral equities.
Investment Strategy: A China based multi strategy multi asset management company
whose goal is to capitalise on opportunities in the Chinese asset management industry and
the continued evolution of China’s markets.
Navigator Global Investments Limited
Directors’ Report
Page 10
Review of Operations
The 2024 financial year has been marked by growth in both assets
under management and revenue across the Navigator business.
Of particular note:
Ownership adjusted Group AUM of $26.2 billion comprising
of $15.8 billion from Lighthouse and $10.4 billion from NGI
Strategic Investments which is an increase of $0.7 billion
over the financial year.
Navigator delivered Adjusted EBITDA of $90.5 million a 85%
increase on the prior year (with statutory EBITDA of $94.8
million, up 73%).
NGI Strategic Investments delivered another strong year,
earning $61.4 million in distributions from the six managers
in the NGI Strategic Portfolio, an increase of $34.6 million.
In addition, distributions from Private Market partner firms
were $11.5 million, a 132% increase on the prior year.
Lighthouse management fee revenue has increased 10% to
$82.4 million (2023: $76.7 million) resulting from higher
average assets under management during the year and an
improvement in the average management fee rate.
Lighthouse performance fee revenue for the year was $11.9
million (2023: $6.9 million), an increase of $5.0 million on the
previous financial year and showing recovery of most
products to end above highwatermarks following a difficult
period in markets over the 2023 financial year. Lighthouse
funds performed well in the second half of the 2024 financial
year.
Employee expenses, excluding termination costs, increased
13% this year, with the increase driven mainly by higher
variable compensation. The addition of the new Group CEO
and changes to some senior executive compensation was a
large contributor to the increase.
Operating expenses, net of fund reimbursement expenses
and other adjustments increased by $1.3 million or 9% on
the prior year. The key driver of the increase was higher
occupancy costs from new office premises, as well as higher
expenses from third party distribution costs, which is
consistent with growth in management fee revenue.
Non-operating expenses were $7.8 million for the year,
reflecting costs incurred on the transaction to settle the
redemption liability, debt restructuring expenses, other
expenses incurred in diligencing potential investment
opportunities, and redundancy costs associated with a
repositioning of the managed account services business
within Lighthouse.
Navigator Global Investments Limited
Directors’ Report
Page 11
Navigator Group results 2024
Adjusted EBITDA of $90.5 million 85%
Presentation of the Group’s results is an unaudited non-IFRS measure intended to show the Group’s core operating performance before the
impact of depreciation, amortisation, non-operating items such as net interest income/costs and non-recurring items. Net profit before and after
income tax reconciles to the income statement on page 41.
Consolidated USD (millions)
Increase /
(decrease)
2024
2023
Management fee revenue
84.2
76.7
10%
Performance fee revenue
11.9
6.9
72%
Revenue from reimbursement of fund operating expenses
172.7
96.6
79%
Net distributions from strategic investments
73.0
31.8
130%
Other revenue & income
8.2
5.4
56%
Total revenue & income
350.0
217.4
61%
Employee expense
(62.8)
(55.6)
13%
Reimbursable fund operating expenses
(167.8)
(94.5)
78%
Other operating expenses1
(18.4)
(15.6)
19%
Total operating expenses1
(249.0)
(165.7)
50%
Result from operating activities1
101.0
51.7
95%
Net finance income/(costs) excluding interest
1.6
3.9
(59%)
Non-operating expenses
(7.8)
(0.9)
767%
Earnings before interest, tax, depreciation and amortisation (EBITDA)
94.8
54.7
73%
Basic EBITDA per share
23.8 cents
22.2 cents2
7%
Net interest expense
(5.4)
(5.1)
6%
Depreciation and amortisation
(7.5)
(5.6)
34%
Profit before income tax
81.9
44.0
86%
Income tax expense
(15.6)
(8.5)
84%
Net profit after income tax
66.3
35.5
87%
Adjustments (unaudited)
EBITDA
94.3
54.7
73%
Net cash payments made for office leases
(4.4)
(3.1)
40%
Unrealised changes in fair value of assets and liabilities
(3.4)
(4.4)
(22%)
Non-recurring revenue, transaction costs and debt restructuring expenses
& advice
2.4
0.9
196%
Equity settled share based payments
1.1
0.8
38%
Adjusted EBITDA
(unaudited, non-IFRS measure)
90.5
48.9
85%
Basic Adjusted EBITDA per share
22.7 cents
19.8 cents
15%
1
Excludes interest, depreciation and amortisation so as to present the Group’s core operating activities.
2
Recalculated as a result of the rights issue in the current year using the same concepts as earnings per share in Note 8.
Net cash lease payments made during the year are adjusted against EBITDA so that it represents a closer measure of the annual
cash operating cost associated with the Group’s various office premises leases following adoption of AASB 16 Leases.
Add back of unrealised gains and losses associated with financial assets and liabilities measured at fair value through profit and loss
primarily relate to NGI Strategic Portfolio investments and the associated redemption liability prior to its extinguishment.
Transaction costs for the current and prior period are associated with early settlement of the 2026 redemption payment on Strategic
Portfolio investments. Additionally non-recurring costs were incurred to expand and extend the Group’s debt facility. Non-recurring
revenue relates to recovery of certain pass through costs which are uncertain to be incurred in future years.
Navigator Global Investments Limited
Directors’ Report
Page 12
Revenues
FY2024 saw an increase in all key revenue items, with the NGI
Strategic Portfolio Settlement being the main contributor to growth.
Distribution income
The majority of income from NGI Strategic Investments was
derived from the NGI Strategic Portfolio, which paid $61.4 million
of gross distributions during the 2024 financial year (FY2023:
$61.9 million).
With the settlement of the NGI Strategic Portfolio transaction, all
distribution income is earnt by Navigator, whereas in the prior year
$35.0 million was paid to Blue Owl in accordance with the profit
sharing arrangements in place for FY2023.
Since acquisition, the NGI Strategic Portfolio has significantly
outperformed expectations based on pre-acquisition historical
earnings. Historical distributed earnings of the Portfolio between
calendar years 2015 and 2021 ranged between $19.6 million and
$52.3 million, and averaged at $34.2 million. In the three years
since acquisition, gross distributions have averaged $64.7 million,
demonstrating both growth in AUM and underlying management
fee revenue, as well as reflecting consistently solid performance
across most of the partner firms.
The managers in the NGI Strategic Portfolio have generally
continued to perform well over calendar year 2024 to date.
However, we highlight that the performance fees earned by these
managers are variable in nature and it is not possible to predict
with any certainty what future distributions will be.
The Private Markets firms also delivered higher distributions this
year, with Navigator receiving $11.5 million for FY2024 (2023: $5.0
million) with approximately 40% of these distributions representing
proceeds from crystallisation of carried interests and General
Partner interests in relevant funds.
Management fees
Management fees for the 2024 financial year were $84.2 million,
an increase of $7.5 million or 10% on the prior year.
The increase in management fees is the result of both an increase
on the average management fee rate to 0.54%pa (2023:
0.52%pa), as well as a 6% increase in average AUM of $15.6
billion for FY2024 (2023: $14.8 billion).
The average management fee rate represents the blended net
management fee rate across all AUM. While there are a number
of factors which impact the average management fee rate across
periods, the main driver is the relative proportion of AUM invested
across the various product lines.
Performance fees
The Group earns performance fees on select portfolios. The fees
represent an agreed share of investment outperformance of a fund
or portfolio over a defined benchmark and/or high-water mark and
may be subject to hurdles. Performance fee rates range from
10%-20% depending on the fund.
The financial year delivered performance fees of $11.9 million
(2023: $6.9 million). The $5.0 million of additional performance
fees reflect strong performance across a number of funds in the
second half of the financial year and which have performance fee
periods crystallising in that period.
Performance fees are variable in nature, and it is difficult to
forecast how much, if any, performance fee revenue will be earned
in future periods.
Fund reimbursement revenue and expenses
Since 1 January 2021, Lighthouse has been rolling out the
implementation of a pass through expense model across relevant
funds. This pass through model fee structure is now common as
compared to legacy fee structures which traditionally charged a
1.5-2.0% management fee plus a 15-20% performance fee.
As the relevant products obtain sufficient scale, Lighthouse is able
to establish fund share classes which have a low or nil
management fee, a performance fee and which can absorb
passed through fund operating expenses. These fund operating
costs can include the compensation cost of dedicated staff (such
as portfolio managers and analysts) as well as external services
and consulting expenses. In practice, these costs are paid by
Lighthouse and are then reimbursed by the relevant funds.
In FY2024, these reimbursements totalled $172.7 million (2023:
$96.6 million), for which there was an off-setting $167.8 million
expense (2023: $94.5 million). The increase is due to on-boarding
a significant number of portfolio managers and other staff who are
dedicated to the relevant funds over the course of the financial
year.
Expenses
Employee expenses
Group employee compensation for FY2024 was $62.8 million
(2023: $55.6 million), an increase of 13%. This excludes
termination costs incurred in the relevant period. The increase is
due to a number of factors, including the appointment of our new
NGI Group CEO during the financial year, as well as a realignment
of compensation for the CEO/CIO of our wholly-owned Lighthouse
subsidiary and an increase for the NGI CIO upon his promotion.
The majority of the Group’s employees are located in the United
States, and the alternative asset management sector remains
highly competitive in terms of attracting and retaining talent.
Fixed compensation was 3% higher than in the prior year,
reflecting new and amended base salaries for key NGI Group
executives, as well as salary increases across the Group to meet
rising inflationary pressures.
Variable compensation was 23% higher on the prior year, with a
large proportion of the increase due additional variable
compensation awarded to the Lighthouse CEO/CIO in comparison
to prior years. Other drivers are variable compensation awarded
to the new NGI Group CEO, as well as specific bonuses awarded
to the key executives involved in executing the successful NGI
Strategic Portfolio transaction which closed on 3 January 2024.
Overall, employee costs increased from scaling for growth in the
NGI business, as wall as having to meet employee expectations in
a highly competitive labour market. An increase in discretionary
bonuses was approved, in line with market, in order to ensure
retention of key staff.
Other operating expenses
Other operating expenses for the Group, net of sundry income and
net fund reimbursements, totalled $14.6 million (2023: $13.3
million), an increase of 9% on the previous year. The increase
primarily relates to additional occupancy costs from new office
premises and an increase in distribution expenses.
Distribution expenses this year were $3.4 million (2023: $2.5
million). These expenses relate to third party distribution
arrangements in place at Lighthouse, whereby ongoing payments
are made to third parties in relation to clients they have introduced
to Lighthouse and who continue to be invested in their products.
The increase in the current financial year is due to additional AUM
raised under distribution arrangements for Hedge Fund products.
Navigator Global Investments Limited
Directors’ Report
Page 13
Non-operating expenses
Non-operating expenses were $7.8 million for the 2024 financial
year, as compared to $0.9 million in the prior year. The significant
increase is due to the transaction costs incurred in relation to the
transaction settled on 3 January 2024 to early settle the existing
2026 redemption liability. Other non-operating costs incurred this
year include termination costs arising on the restructuring of the
Lighthouse managed account services business.
Net changes in fair value
The Group carries its investments at fair value and re-measures
this at each balance date. Changes to the fair value of the NGI
Strategic Portfolio are recognised in the profit and loss statement,
and given their strong distributions and growth in aggregate AUM,
a $21.0 million fair value gain has been recognised, which is a 7%
increase on the opening fair value of the assets.
The redemption liability associated with the FY2026 obligation was
settled on 3 January 2024. Whilst contractual consideration of
$200 million was agreed, the combined fair value of the shares
issued and cash paid was $179.1 million. This resulted in a
negative $19.6 million change in fair value of the extinguished
financial liability being recognised in the profit and loss statement.
Changes to the fair value of investments in our Private Markets
partner firm investments are recognised in other comprehensive
income, and a fair value gain of $3.0 million was recognised in
relation to these investments for FY2024 (2023: loss of $18.8
million).
Dividends
The Directors determined an unfranked dividend of 3 US cents per
share (with 100% conduit foreign income credits) payable
27 September 2024.
This equates to a payout ratio of 18% of Adjusted EBITDA.
The Board has determined that it remains appropriate for the NGI
Group to direct a significant portion of cash generated from
operating activities towards supporting the continued growth of the
business.
The dividend policy remains unchanged with an annual dividend of
US 3 - 4 cents per share, which will be unfranked, however may
have conduit foreign income credits attached. The payment of
dividends will be subject to corporate, legal and regulatory
considerations.
During the 2024 year the final ordinary dividend for the year ended
30 June 2023 of US 3.0 cent was paid to shareholders and
convertible note holders amounting to USD 9 million.
Navigator Global Investments Limited
Directors’ Report
Page 14
Board of Directors
The Directors of the Company at any time during or since the end of the financial year are:
Michael Shepherd, AO
Independent Chairman
Appointed 16 December 2009
Board Committees
Chair of the Remuneration and Nominations & Committee
Member of the Audit and Risk Committee
Chair of the Independent Board Committee
Experience and expertise
Michael has extensive experience in financial markets and the financial services industry having held a
range of senior positions including Vice Chairman of ASX Limited, and directorships of several of
ASX’s subsidiaries including Australian Clearing House Pty Ltd.
Mr Shepherd is a Member of the Australian Institute of Company Directors and a Senior Fellow and
Life Member of the Financial Services Institute of Australasia.
Current directorships
For the past 10 years Michael has been an independent director of Investsmart Group Limited and
more recently a director of Friends of the Mater Limited and its trustee. Michael is also an independent
Compliance Committee Member for UBS Global Asset Management (Australia) Limited and chairs the
Shepherd Foundation.
Former listed company directorships (last three years)
Mr Shepherd has not held any other directorships of listed companies over the past three years.
Interests in the Company
272,482 Ordinary Shares held indirectly by Tidala Pty Ltd as Trustee for the Shepherd Provident Fund
Stephen Darke
NGI Chief Executive Officer and executive director
Appointed 30 October 2023
Board Committees
Member of the Independent Board Committee
Experience and expertise
Stephen commenced as NGI Chief Executive Officer and was appointed as a director on 31 October
2023. Prior to joining Navigator he was a Managing Director at Macquarie Group Limited, where he
worked for 24 years in its global Asset Management and Investment Banking Groups until July 2022.
He worked in New York from 2006 to 2018 where he specialised in Alternative asset management and
corporate strategy, including co-managed the Sass-Macquarie Financial Strategies fund, a private
equity fund which established, managed and facilitated capital events for eleven emerging alternative
asset managers.
Having worked in New York and London, he returned to Australia in 2018 after twelve years in the U.S.
In July 2022, prior to his appointment as NGI CEO, Stephen established Arch Advisors, an
independent investment management consultancy focused on advising boutique asset managers.
Mr Darke began his career as a lawyer at Allens in Sydney. He holds a Bachelor of Law (Honours) and
a Bachelor of Commerce (Finance/Accounting) from Bond University.
Current directorships
Mr Darke is a director of Longreach Alternative Ltd and Arch Advisors Pty Ltd.
Former listed company directorships (last three years)
Mr Darke has not held any other directorships of listed companies over the past three years.
Interests in the Company
202,973 Ordinary Shares, 50,000 of which are held through LHA Capital Pty Limited as trustee for the
Darke Capital Family Trust (No 2)
Navigator Global Investments Limited
Directors’ Report
Page 15
Sean McGould
Chief Executive Officer of Lighthouse & Executive Director
Appointed 3 January 2008
Experience and expertise
As a co-founder of Lighthouse Sean holds key leadership positions, including Chief Executive Officer,
Co-Chief Investment Officer and Chairman of the Lighthouse Investment Committee. Sean has been
overseeing all aspects of the portfolios since August 1996.
With over 25 years of experience in alternative investment strategies, Sean has demonstrated a strong
track record in the industry. Prior to establishing Lighthouse, he served as the director of the Outside
Trader Investment Program at Trout Trading Management Company. In this role, he was responsible
for the allocation of fund’s assets to external alternative asset strategies.
Before joining Trout, Sean gained valuable experience at Price Waterhouse while working in their Audit
and Corporate Finance department, and Sean passed the Certified Public Accountant exam in
November 1989.
Former listed company directorships (last three years)
Mr McGould has not held any other directorships of listed companies over the past three years.
Interests in the Company
27,121,365 Ordinary Shares held through SGM Holdings, LLC
611,620 Performance Rights
Nicola Meaden Grenham
Independent non-executive director
Appointed 8 October 2020
Board Committees
Member of the Remuneration & Nominations Committee
Member of the Independent Board Committee
Experience and expertise
Nicola is a specialist in alternative investments with significant knowledge and experience of strategic
business development and investment management in hedge funds and private markets. Nicola’s
experience includes her time as the CEO of Alpha Strategic Plc (2008-2012), a UK listed company
which provided independent, owner-managed investment managers with access to passive minority
equity capital. She currently runs Dumas Capital Ltd, a company she founded in 2004 which provides
strategic advisory and research services in the alternative investment sector.
Current directorships
Ms Grenham holds positions in relation to a number of Irish and Cayman Island entities:
Chair of STANLIB Investments ICAV, Titanbay Ireland Ltd and UWC Endowment Fund ICAV
Director of Apollo Credit Funds ICAVs, a number of BlackRock fund entities, ICAV, Polaris PPU
Funds, Spehera Global Helathcare Funds
Chair of The Capital Holdings Funds Plc
Former listed company directorships (last three years)
Ms Grenham has not held any other directorships of listed companies over the past three years.
Interests in the Company
38,768 Ordinary Shares
Navigator Global Investments Limited
Directors’ Report
Page 16
Suvan de Soysa
Independent non-executive director
Appointed 22 September 2021
Board Committees
Chairman of the Audit and Risk Committee
Member of the Independent Board Committee
Experience and expertise
Suvan has an accounting and a legal background, holding a Bachelor of Science (Economic) Honours
and a Bachelor of Law before he was admitted as a solicitor of the Supreme Court of New South Wales
in July 1984. Suvan also holds a Graduate Diploma from the Securities Institute of Australia and a
Diploma in Financial Planning from the Financial Planning Association. Suvan was a certified financial
planner for 25 years and is also a fellow of both the Financial Services Institute of Australasia and the
Australian Institute of Company Directors.
Suvan was a co-founder of ipac Securities Limited and ipac Asset Management and during his 25
years undertook a number of senior executive roles. His experience covers a broad range of business
areas within the wealth management arena, having headed various departments including financial
planning, business development, strategic alliances and acquisitions.
Current directorships
Suvan is a Non-executive Chairman of Chancellor Portfolio Services and for the past six years has
been an independent non-executive director of Monash Absolute Investment Company and was Chair
of its Audit and Risk Committee.
Former listed company directorships (last three years)
Other than the directorship of Monash Absolute Investment Company, Mr de Soysa has not held any
other directorships of listed companies over the past three years.
Interests in the Company
275,000 Ordinary Shares held indirectly through the De Soysa Super Pension Fund
Lindsay Wright
Independent non-executive director
Appointed 7 November 2023
Board Committees
Member of the Audit and Risk Committee
Member of the Independent Board Committee
Experience and expertise
Lindsay has substantial experience in the alternative asset management sector with over 30 years’
experience across financial services and asset management value chains. Lindsay began her career
at Bankers Trust/Deutsche Bank in New Zealand after completing a Bachelor of Commerce at the
University of Auckland. During her 15 years with the Deutsche Group, Lindsay held senior executive
roles in Australia, Tokyo, Singapore and New York in the asset management division with a focus on
organic and inorganic strategy, business development, restructuring and realignment of strategy to
maximise business opportunities.
More recently Lindsay has been based in Asia in key senior management and leadership roles with
Harvest Fund Management in Beijing and regional APAC roles with Invesco, BNY Mellon Investment
Management and Matthews Asia based in Hong Kong, and CEO of Sun Hung Kai Capital Partners, the
Funds Management division of Sun Hung Kai & Co in Hong Kong.
Current directorships
Lindsay is currently a Board Member and Chair of the Audit & Risk Committee at the New Zealand
Stock Exchange, NZX Limited. She is also a director of Milford Asset Management Limited, Milford
Funds Limited, Milford Private Wealth Limited and Milford Australia Pty Limited, Milford Private Equity II
Limited Partnership and Milford Private Equity III Limited Partnership
Former listed company directorships (last three years)
She was also Deputy Chair of the Guardians of the New Zealand Superannuation Fund and Board
Member of Kiwi Bank Limited
Interests in the Company
Nil
Navigator Global Investments Limited
Directors’ Report
Page 17
Marc Pillemer
Non-executive director and member of the Remuneration and Nominations
Committee
Appointed 28 February 2024
Member of the Remuneration & Nominations Committee
Member of the Independent Board Committee
Mr Marc Pillemer is a Director nominated in accordance with the Shareholders Agreement between the
Company and Neuberger Berman Australia Limited as trustee for Dyal Trust I.
Marc is a Managing Director of Blue Owl and a member of the GP Strategic Capital Investment
Team. Before joining Blue Owl, Mr. Pillemer was a Managing Director at The Blackstone Group in its
GP Stakes business. In this role, Mr. Pillemer was a senior member of the Investment Team
responsible for sourcing, evaluating and executing investments, and Mr. Pillemer led the Strategic
Support Team focused on delivering value to partner firms.
Prior to that, Mr. Pillemer was a Managing Director at Goldman Sachs & Co in the Financial Institutions
Group within the Investment Banking Division. In this role, Mr. Pillemer was responsible for the
coverage of the alternative asset management sector in the U.S. and was focused extensively on
providing strategic advisory services to leading traditional and alternative asset management firms. Mr.
Pillemer also held various prior roles in Goldman Sachs’ Investment Management and Securities
divisions.
Mr. Pillemer earned a BCom in Actuarial Studies and Finance from Macquarie University at Sydney,
Australia.
Interests in the Company
Nil
Information on Former Directors:
Cathy Hales
Appointed 22 March 2022, Resigned 30 October 2023
Independent non-executive director
Member of the Remuneration & Nominations Committee
Member of the Audit and Risk Committee
Cathy has extensive expertise spanning over 25 years where she has successfully led and developed investment management businesses.
Prior to joining NGI, Cathy held the position of Global Head of Fidante Partners, the multi-boutique asset management arm of the Challenger
Group. Her leadership roles also include distinguished positions at Deutsche Asset Management, Colonial First State, and BT Funds
Management.
Throughout her career, she has held directorships with investment firms such as WaveStone Capital, Alphinity Investment Management,
Greencape Capital, Kudu Investment Management, and Ardea Investment Management, among others, showcasing her breadth of
experience in diverse sectors of the investment industry.
Cathy’s academic accomplishments include a Bachelor of Business (Economics) Honours degree and she is a member of the Australian
Institute of Company Directors and fellow of the Governance Institute of Australia.
Cathy resigned on 30 October 2023 in order to take a full time executive position at Mercer as Chief Executive Officer, Wealth, Pacific.
Navigator Global Investments Limited
Directors’ Report
Page 18
Business strategies and future outlook
FY2024 was a year of strengthening our balance sheet and operating cashflows to support future growth. The Navigator Group is well
diversified across alternative asset management sectors, and this diversification creates high quality earnings across a wide range of product,
client type and geography.
With strong organic AUM growth from both our Lighthouse business and the majority of our minority stake investments, both from positive
investment performance and net inflows to products, we expect to see the benefits through an uplift in management fee earnings. This growth
underpins Navigator’s financial results whilst we continually explore other opportunities to enhance earnings. Navigator continues to see and
explore opportunities for additional investments, and is in a strong position to proactively pursue the most attractive opportunities which meet
our criteria.
Material business risk
The material business risks facing the Group are equity market
conditions, cyber and regulatory risk.
Global market conditions
The Group’s results and outlook are influenced by conditions in
global equity markets, both in terms of potential impact on
investment performance of funds and prospects for raising and
retaining client assets. The Group is exposed to a variety of
economic, political, geographical and social risk factors through its
global portfolio of stakes in alternative investment managers.
These risk factors may impact on the performance of capital
markets in unpredictable ways.
The Group’s approach to managing this market exposure risk has
been through a strategy of diversification of our investments in
alternative asset managers across a range of strategies, products
and geographies. Through careful curation of our minority
investment stakes, we look to add investments with low correlation
to existing specialities to build resilience in both our management
fee and performance fee earnings through various market cycles.
Global market conditions can impact on investment performance,
which impacts the value of the Group’s assets under management.
Assets under management is a key driver of the Group’s financial
performance, and is sensitive to the investment performance
generated by each asset manager. Investment performance can
also impact assets under management by influencing the
prospects of an individual manager in raising and/or retaining client
capital.
Key person risk
The generation of strong investment returns and raising of new
capital from clients requires a high level of skill and experience
from key people within the Group and the asset managers we
invest in. A loss of these key people could be detrimental to the
financial performance of the Group. The Group looks for
alignment of interest with key persons through remuneration and
ownership interests in order to incentivise both performance and
retention.
Regulatory risk
The Group operates in a number of jurisdictions around the world
in an industry which is highly regulated. The Group remains
focused on compliance with its regulatory requirements,
particularly as they continue to evolve through regular review and
change in laws, regulations and policy requirements. Our minority
stake investments are in established and well resourced asset
management firms which have dedicated in-house compliance
functions. We ensure that our internal legal, risk and compliance
functions continue to be well resourced, both in terms of staff and
access to specialist consultants and support.
Cyber risk
Data is a key asset of the Group, and the number of high profile
data hacking incidents in the last few years highlights the
importance of vigilance in relation to management of the Group’s
cyber environment. Whilst the Group does not collect and store
any significant level of personal financial, payment or identification
data in relation to individuals, a core focus is protection of portfolio
data as well as ensuring business continuity in the event of any
technological disruption. The Group’s operating subsidiary has
dedicated in-house resources who proactively manage information
technology requirements and cyber risks. The Group also
engages external specialists to regularly review, test and enhance
its technology environment.
Long-term
Growth
Growth
Navigator’s earnings profile is
now highly diversified over 11
stakes in alternative asset
managers
Diversification
Innovation
Stability
Multi-year outlook for stable,
well-covered preferred
earnings stream from the NGI
Strategic Portfolio, and the
addition of high-quality
earnings and visible revenue
generated from closed-end
funds
Lighthouse generates
management fee
concentrated earnings from a
diverse product set and client
base
Our partners are demonstrating
solid AUM growth, driven by
both performance and inflows
The Lighthouse business is well
positioned for growth across
multiple products and continues
to invest in additional product
innovation
NGI Strategic managers continue to
innovate by leveraging their core
competencies and tactically
launching new products and
strategies
Navigator Global Investments Limited
Directors’ Report
Page 19
Corporate governance
The Group recognises the value of good corporate
governance. The board believes that effective
governance processes and procedures add to the
performance of the Group and engenders the confidence of the
investment community.
The Company has adopted Listing Rule 4.10.3 which allows
companies to publish their corporate governance statement on
their website rather than in their annual report. The directors have
reviewed the statement, and a copy of the statement, along with
any related disclosures, is available at:
https://www.navigatorglobal.com.au/corporate-governance
Board and Committee meetings
The agenda for meetings is prepared by the Company Secretary in
consultation with the Chairman and Chief Executive Officer, and is
set to ensure adequate coverage of strategic, operational,
financial, risk and governance matters.
Board papers are circulated in advance of the meetings. Senior
executives are invited to attend board meetings, however the
directors may have closed sessions without executive involvement
during meetings at their discretion.
Board meetings
The number of meetings of the Company’s board of directors
during the year ended 30 June 2024, and the number of meetings
attended by each director whilst in office were:
Held
Attended
Michael Shepherd (Chair)
13
13
Nicola Grenham
13
13
Sean McGould
13
12
Suvan de Soysa
13
13
Stephen Darke
8
8
Lindsay Wright
8
8
Marc Pillemer
3
3
Cathy Hales
5
4
Audit and Risk Committee meetings
The number of meetings the Audit and Risk Committee held during
the year ended 30 June 2024, and the number of meetings
attended by each Committee Member whilst in office were:
Held
Attended
Suvan de Soysa (Chair)
5
5
Michael Shepherd
5
5
Lindsay Wright
4
4
Cathy Hales
1
1
Remuneration and Nominations Committee
meetings
The number of meetings the Remuneration and Nominations
Committee held during the year ended 30 June 2024, and the
number of meetings attended by each Committee Member were:
Held
Attended
Michael Shepherd (Chair)
7
7
Nicola Grenham
7
7
Marc Pillemer
5
5
Cathy Hales
1
1
Independent Board Committee meetings
The number of meetings the Independent Board Committee held
during the year ended 30 June 2024, and the number of meetings
attended by each Committee Member were:
Held
Attended
Michael Shepherd (Chair)
2
2
Nicola Grenham
2
2
Suvan de Soysa
2
2
Stephen Darke
2
2
Lindsay Wright
2
2
Marc Pillemer
2
2
Navigator Global Investments Limited
Directors’ Report
Remuneration report – Audited
Page 20
This Remuneration Report for the Company and its controlled entities for the year ended
30 June 2024 forms part of the Directors’ Report and is audited in accordance with section
300A of the Corporations Act 2001.
Reporting in United States dollars
In this report the remuneration and benefits reported have been
presented in US dollars (‘USD’). This is consistent with the
functional and presentation currency of the Group. Where
compensation for Australian-based employees is paid in
Australian dollars, it is converted to USD for reporting purposes
based on either specific transaction exchange rates, or the
average exchange rate for the payment period as appropriate.
The Australian dollar based compensation paid during the year
ended 30 June 2024 was converted to USD at an average
exchange rate of:
AUD/USD 0.6557 (2023: AUD/USD 0.6630).
Contents
Overview of remuneration policy and approach
Relationship between remuneration policy and company
performance
Variable compensation for the 2024 financial year
Key management personnel remuneration disclosures
20
27
28
29
Overview of remuneration policy and approach
The overall objectives of the Group’s remuneration policies are to:
embed a culture that promotes the Group’s core values
support the business strategy of the Group by attracting, retaining and rewarding quality staff
encourage appropriate performance and results to uphold client and shareholder interests
properly reflect each individual’s duties and responsibilities
When setting the Group’s approach to remuneration, the Board keeps the following factors front-of-mind:
Operations and employees are predominantly based in the United States
Navigator is an Australian company listed on the Australian Securities Exchange, however the Group’s operations are
predominantly based in the United States. To be effective in attracting and retaining high quality staff, remuneration
arrangements must therefore be aligned to the expectations of people who are employed in the United States alternative asset
management industry.
These remuneration arrangements may diverge from arrangements which would be considered industry practice within
Australia. The quantum and proportion of variable remuneration to total remuneration packages is one such area.
Variable remuneration is a key component of total compensation
The remuneration arrangements in place for the Group are generally structured around setting a lower fixed remuneration
amount and having the opportunity to earn variable remuneration as a major component of overall remuneration. This is
particularly true for our US based employees. The Board believes this provides a dynamic basis to be able to adjust the
Group’s total remuneration expense and is also consistent with US industry practice.
Performance conditions in relation to variable remuneration apply to senior management and investment staff in the US. These have been
implemented to incentivise senior employees to achieve results which grow revenues for the Lighthouse business as it continues to transition
away from its Legacy fund-of-fund business model and into a multi-portfolio manager hedge fund business.
The Board has maintained a level of discretion in setting the total amount of variable compensation, and senior executives exercise discretion in
allocating bonuses to individuals based on their performance and contribution.
The Board is satisfied that the current arrangements are consistent with alternative asset management industry practice in the United States
and allows employees to focus on achieving results for clients, which is ultimately in the long-term interests of shareholders.
Navigator Global Investments Limited
Directors’ Report
Remuneration report – Audited (continued)
Page 21
Overview of remuneration policy and approach (continued)
The Group rewards its executives and senior managers with a
level and mix of remuneration which is relevant to their position,
responsibilities and performance during the year. Remuneration
comprises both fixed and variable remuneration, and may include
long-term incentive positions. The correct mix and outcome of
remuneration is considered by the Remuneration and Nominations
Committee and the Board when setting and approving
remuneration arrangements.
Fixed remuneration
Fixed remuneration may include:
base salary;
a minimum annual bonus amount; and
employer contributions to superannuation and retirement
plans and health care benefits.
Fixed base remuneration is generally determined by having regard
to responsibilities, performance, qualifications and experience of
the relevant staff member.
Since the 2022 financial year, the Group has introduced a bonus
structure which establishes specific performance conditions in
relation to annual variable bonus remuneration for select senior
management and investment roles. The specific performance
conditions are set to incentivise those employees to achieve
outcomes directly relevant to their roles and responsibilities, such
as achievement of a defined level of net performance return for a
particular fund or portfolio for which they are responsible.
As part of implementing these new performance conditions, a
minimum and/or maximum bonus component may be incorporated
into the revised bonus remuneration arrangements for these staff
members.
The implementation of these arrangements has been limited to a
small number of employees, hence most employees do not have a
fixed bonus component in their compensation structure.
Fixed remuneration is reviewed at least annually, or on promotion,
to ensure that it is competitive and reasonable. There are no
guaranteed increases to the minimum remuneration amount.
The amount of fixed remuneration is not dependent on the
satisfaction of a performance condition, or the performance of the
Group or business unit, the Company's share price, or dividends
paid by the Company.
Other benefits
Employees are entitled to additional benefits that may include
educational assistance, adoption assistance and health care
benefits.
Employees are also able to make investments into Lighthouse
managed funds without incurring any fees. There is no
incremental cost incurred by the Group in providing fee-free
investment management services via the Lighthouse funds to
employees. Having employees invest their own assets into
Lighthouse managed funds is viewed positively by clients and
potential clients as it demonstrates an alignment of interest
between the Lighthouse employee and future investment results
for clients. Nil fee arrangements for employees is common
practice in the US asset management industry.
Variable remuneration
Short term incentives
Variable remuneration is comprised of participation in a short-term
cash bonus pool, and for certain senior eligible employees,
participation in long-term incentive plans.
The majority of existing variable remuneration arrangements are
short-term in nature, and are designed to motivate staff to create
value for both:
our clients, through investment returns and a high level of
client service; and
the Company's shareholders.
Certain senior management and investment employees have had
contractual performance conditions applied to their bonus
arrangements. These arrangements may include a minimum and
maximum applied to any amount calculated in accordance with the
performance condition.
The performance of individual staff members, including senior
executives, is reviewed at least annually, after which the award of
variable remuneration is considered.
The Board approves the overall size of the annual bonus pools
and approves an award to the NGI CEO, Lighthouse CEO, NGI
Chief Investment Officer and the Chief Financial Officer. The
Board delegates authority to these senior executives to exercise
discretion to make variable remuneration allocations to other
individual staff.
Long term incentives
The Board recognises the importance of establishing remuneration
arrangements that promote generation of shareholder wealth over
the long term as well as retention of key staff.
At the 2021 Annual General Meeting (“AGM”) held on 28 January
2022, shareholders approved the Performance Rights Plan (the
“LTI Plan”) and the Board has issued of securities under the LTI
Plan in three annual tranches. The Board recognises the
importance of tailoring the grants to each participant to ensure that
they are designed to promote the appropriate behaviour of each
participant.
A summary of the LTI Plan is set out on the following page, as well
as the key terms of each year’s grant:
Navigator Global Investments Limited
Directors’ Report
Remuneration report – Audited (continued)
Page 22
Overview of remuneration policy and approach (continued)
The key terms of the Performance Rights Plan are as:
Performance
Rights Plan
The Board may, from time to time, in its absolute discretion, offer to grant Performance Rights as part of its long-term
incentive strategy to an eligible participant under the Performance Rights Plan.
Any full-time or part-time employee (including any executive director) of the Company and its related bodies corporate
(Group) (Employee) is eligible to participate in the Performance Rights Plan and to be offered Performance Rights if they
satisfy the criteria or other performance conditions that the Board determines from time to time.
Objective
The objective of the LTI Plan is to:
support the business strategy of the Group by attracting, retaining and rewarding quality executives and staff;
encourage appropriate performance and results to uphold client and shareholder interests;
properly reflect each individual's duties and responsibilities; and
embed a culture that rewards performance whilst maintaining integrity, reputation and mitigating risk.
How offers
made
The Company may from time to time invite any person to participate in the LTI Plan who is an Eligible Person by offering
to the person Performance Rights for acquisition on such terms as the Board may determine in accordance with this LTI
Plan.
How
Securities
acquired
Performance Rights may be granted, and shares, upon the exercise of Performance Rights, may be issued transferred to
Employees or such other persons (including without limitation, any person’s legal personal representative or trustee in
bankruptcy) as the Board in its discretion determines to be eligible to participate in the Performance Rights Plan
(Participant).
Consideration
Unless otherwise determined by the Board in its discretion, Performance Rights are to be granted for nil consideration to
Employees under the Performance Rights Plan.
The exercise price for Performance Rights, or the method of calculation of the exercise price, is as determined by the
Board at the time of grant and stated in the letter of offer. The exercise price for a Performance Right will be nil (including
where no exercise price is stated in the letter of offer) unless the Board determines otherwise and states the price in the
letter of offer.
Other terms
The Board will determine whether any performance hurdles or other conditions will be required to be met (vesting
conditions) before the Performance Rights which have been granted under the Performance Rights Plan can vest.
Performance Rights will only vest once all vesting conditions and performance hurdles set out in the offer have all been
satisfied or otherwise waived by the Board, and will vest automatically on the business day after the Board determines the
vesting conditions and performance hurdles set out in the offer have all been satisfied or otherwise waived.
Once granted, a Performance Right will lapse on the earliest to occur of:
the stated lapsing date;
a date or circumstance specified in the offer for that Performance Right or a provision of the Performance Rights
Plan rules as when a Performance Right lapses;
failure to meet an exercise condition or meet any other condition applicable to the Performance Right within the
period specified in the offer for that Performance Right; or
the receipt by the Company of a notice in writing from a Participant that the Participant has elected to surrender the
Performance Right.
Performance Rights are not entitled to receive a dividend. Any shares issued or transferred to a Participant upon vesting
of Performance Rights are only entitled to dividends if they were issued on or before the relevant dividend entitlement
date.
A share issued on exercise of a Performance Right will rank equally in all respects with shares already on issue on the
date of exercise of the Performance Right, except for entitlements which had a record date before the date of issue of that
share.
Navigator Global Investments Limited
Directors’ Report
Remuneration report – Audited (continued)
Page 23
Overview of remuneration policy and approach (continued)
Long term incentives (continued)
The Board has made three grants of performance rights under the LTI Plan to Participants, the 2021 Performance Rights Grant (2021 Grants),
the 2022 Performance Rights Grant (2022 Grants) and the 2023 Performance Rights Grant (2023 Grants).
The performance conditions relating to the 2021 Grants, 2022 Grants and the 2023 Grant to the Chief Financial Officer are as follows:
Performance
conditions
The number of Performance Rights that vest and, therefore, the number of shares that Participants may acquire, are
subject to two performance conditions.
Performance Rights will vest depending on the following two performance conditions:
1.
total shareholder return (TSR); and
2.
earnings before interest, taxes, depreciation and amortisation (EBITDA).
50% of the Performance Rights granted for the performance period will be tested against an absolute TSR performance
condition (TSR Rights), and the remaining 50% will be tested against an absolute adjusted EBITDA performance condition
(EBITDA Rights). In both cases, any vesting will depend upon the Compound Annual Growth Rate (CAGR) achieved by
the Company.
TSR Rights
The performance condition to be used to determine the number of TSR Rights that vest is the TSR performance of NGI
over the performance period.
Broadly, TSR measures the return to a shareholder over the relevant performance period in terms of changes in the
market value of the shares plus the value of any dividends paid on the shares. Unless the Board determines otherwise, the
share prices used to calculate the TSR of the Company for a performance period will be measured as follows:
the opening share price will be the volume weighted average price on the ASX in respect of the Company for the 20
trading days ending on the first day of the performance period; and
the closing share price will be the volume weighted average price on the ASX in respect of the Company for the 20
trading days ending on the last day of the performance period.
The percentage of Performance Rights which vest, if any, will be determined by the Board by reference to the absolute
TSR CAGR achieved by the Company over the relevant performance period:
TSR - Performance level
TSR over the Performance Period
Vesting level
Below Minimum
< 7%
0%
Minimum
7%
25%
Between Minimum and Target
Between 7% and 9.5%
Straight line vesting between 25%
and 50%
Target
9.5%
50%
Between Target and Stretch
Between 9.5% and 14.5%
Straight line vesting between 50%
and 100%
Stretch
14.5%
100%
The Board's determination of TSR and TSR CAGR for this purpose is final and is not appealable or reviewable.
EBITDA Rights
The performance condition to be used to determine the number of EBITDA Rights that vest is the CAGR of adjusted
EBITDA per share (EBITDA/Share) over the performance period.
Unless the Board determines otherwise, EBITDA is to be calculated as Earnings Before Interest, Tax, Amortisation and
Depreciation of the NGI Group adjusted for the following:
to recognise cash payments associated with office lease payments recognised as a finance cost under AASB 16
Leases;
to exclude from EBITDA non-cash changes in fair value related to the assets and liabilities associated with the NGI
Strategic portfolio; and
to exclude from EBITDA expensed transaction costs incurred in relation to an acquisition accounted for under AASB
3 Business Combinations.
The Board retains a discretion to adjust the EBITDA performance condition to ensure that participants are not penalised
nor provided with a windfall benefit arising from matters outside of management’s control that affect EBITDA (for example,
excluding one-off non-recurrent items or the impact of significant acquisitions or disposals).
Navigator Global Investments Limited
Directors’ Report
Remuneration report – Audited (continued)
Page 24
Overview of remuneration policy and approach (continued)
Long term incentives (continued)
Performance
conditions
(continued)
EBITDA/Share is calculated by dividing EBITDA for the financial year by the weighted average number of ordinary shares
outstanding over the relevant period i.e.
USD EBITDA (or loss) for financial year
Weighted average number of ordinary shares outstanding
The vesting schedule for the EBITDA/Share performance hurdle is set out in the table below:
EBITDA - Performance level
EBITDA/Share CAGR over the
Performance Period
Vesting level
Below Minimum
< 8%
0%
Minimum
8%
25%
Between Minimum and Target
Between 8% and 11.5%
Straight line vesting between 25%
and 50%
Target
11.5%
50%
Between Target and Stretch
Between 11.5% and 15%
Straight line vesting between 50%
and 100%
Stretch
15%
100%
Performance
period
2021 Performance Rights Grants
The performance conditions will be tested on a date determined by the Board following the end of the 2024 financial year
(i.e. 30 June 2024). Any Performance Rights that do not vest prior to the expiry date of the Performance Rights will lapse.
2022 Performance Rights Grants
The performance conditions will be tested on a date determined by the Board following the end of the 2025 financial year
(i.e. 30 June 2025). Any Performance Rights that do not vest prior to the expiry date of the Performance Rights will lapse.
2023 Performance Rights Grants
The performance conditions will be tested on a date determined by the Board following the end of the 2026 financial year
(i.e. 30 June 2026). Any Performance Rights that do not vest prior to the expiry date of the Performance Rights will lapse.
The Company will issue or procure the transfer of Company ordinary shares on the exercise of Performance Rights in
accordance with the Performance Rights Plan rules and the terms of the Performance Rights.
Shares allocated on exercise of Performance Rights will rank equally with shares in the same class.
The performance conditions relating to the 2023 Grant to the NGI Chief Investment Officer are as follows:
Performance
conditions
The number of Performance Rights that vest and, therefore, the number of shares that Participants may acquire, are
subject to two performance conditions.
Performance Rights will vest depending on the following two performance conditions:
1.
total shareholder return (TSR); and
2.
profit before tax excluding Lighthouse per share (PBT).
40% of the Performance Rights granted for the performance period will be tested against an absolute TSR performance
condition (TSR Rights), and the remaining 60% will be tested against an absolute adjusted PBT performance condition
(PBT Rights). In both cases, any vesting will depend upon the Compound Annual Growth Rate (CAGR) achieved by the
Company.
TSR Rights
The performance condition to be used to determine the number of TSR Rights that vest is the TSR performance of NGI
over the performance period.
Broadly, TSR measures the return to a shareholder over the relevant performance period in terms of changes in the
market value of the shares plus the value of any dividends paid on the shares. Unless the Board determines otherwise, the
share prices used to calculate the TSR of the Company for a performance period will be measured as follows:
Navigator Global Investments Limited
Directors’ Report
Remuneration report – Audited (continued)
Page 25
the opening share price will be the volume weighted average price on the ASX in respect of the Company for the 20
trading days ending on the first day of the performance period; and
the closing share price will be the volume weighted average price on the ASX in respect of the Company for the 20
trading days ending on the last day of the performance period.
The percentage of Performance Rights which vest, if any, will be determined by the Board by reference to the absolute
TSR CAGR achieved by the Company over the relevant performance period:
TSR - Performance level
TSR over the Performance Period
Vesting level
Below Minimum
< 7%
0%
Minimum
7%
25%
Between Minimum and Target
Between 7% and 9.5%
Straight line vesting between 25%
and 50%
Target
9.5%
50%
Between Target and Stretch
Between 9.5% and 14.5%
Straight line vesting between 50%
and 100%
Stretch
14.5%
100%
The Board's determination of TSR and TSR CAGR for this purpose is final and is not appealable or reviewable.
PBT Rights
The performance condition to be used to determine the number of PBT Rights that vest is the CAGR of adjusted Profit
Before Tax (excluding Lighthouse) per share (PBT/Share) over the performance period.
Unless the Board determines otherwise, PBT is to be calculated as Profit Before Tax of the NGI Group adjusted for the
following:
to exclude earnings from the Lighthouse Business Segment;
to include cash payments associated with office lease payments recognised as a finance cost under AASB 16 Leases
related to non-Lighthouse entities;
to exclude from PBT unrealised changes in fair value related to the assets and liabilities associated with investments
held at fair value through the profit and loss;
to exclude changes in fair value related to the Redemption Liability and its extinguishment;
to exclude interest expense from the unwind of discount of (but not limited to) deferred consideration, lease liabilities
and convertible notes; and
to exclude from PBT non-cash items associated with share based payments.
The Board retains a discretion to adjust the PBT performance condition to ensure that participants are not penalised nor
provided with a windfall benefit arising from matters outside of management’s control that affect PBT (for example,
excluding one-off nonrecurrent items or adjusting realised gains/losses on disposal of non-Lighthouse investments to
include the unwind of discount of deferred consideration excluded from PBT).
Navigator Global Investments Limited
Directors’ Report
Remuneration report – Audited (continued)
Page 26
Overview of remuneration policy and approach (continued)
Long term incentives (continued)
Performance
conditions
(continued)
PBT/Share is calculated by dividing PBT for the financial year by the weighted average number of ordinary shares
outstanding over the relevant period i.e.
USD PBT for financial year
Weighted average number of ordinary shares outstanding (including ordinary shares
which may be issued pursuant to the conversion of Convertible Notes)
The vesting schedule for the PBT/Share performance hurdle is set out in the table below:
PBT- Performance level
PBT/Share CAGR over the
Performance Period
Vesting level
Below Minimum
< 8%
0%
Minimum
8%
25%
Between Minimum and Target
Between 8% and 11.5%
Straight line vesting between 25%
and 50%
Target
11.5%
50%
Between Target and Stretch
Between 11.5% and 15%
Straight line vesting between 50%
and 100%
Stretch
15%
100%
Performance
period
The performance conditions will be tested on a date determined by the Board following the end of the 2026 financial year
(i.e. 30 June 2026). Any Performance Rights that do not vest prior to the expiry date of the Performance Rights will lapse.
The Company will issue or procure the transfer of Company ordinary shares on the exercise of Performance Rights in
accordance with the Performance Rights Plan rules and the terms of the Performance Rights.
Shares allocated on exercise of Performance Rights will rank equally with shares in the same class.
For the 2024 financial year, the proportion of remuneration between fixed and variable components for KMPs is as follows:
Further detail regarding the methodology for determining the 2024 financial year annual bonus pools are contained on page 28.
34%
25%
24%
52%
66%
75%
76%
48%
NGI CEO
Lighthouse CEO/CIO
NGI CIO
Other KMP
Fixed
Variable
Navigator Global Investments Limited
Directors’ Report
Remuneration report – Audited (continued)
Page 27
Relationship between remuneration policy and company performance
The Board considers Adjusted EBITDA to be the most relevant measure of the Company’s overall financial performance. Statutory EBITDA is
adjusted for certain cash and non-cash items, particularly those due to carrying investments held at fair value through the Income Statement,
adding in rent expense and other non-recurring items when relevant.
In implementing the remuneration policy and structure, the Board has had regard to what it considers to be the key measure
of the profitability of the Company:
Adjusted EBITDA –
Earnings before interest, tax, depreciation, and amortisation from continuing operations, adjusted for:
the reduction of occupancy costs recorded below the EBITDA line due to the implementation of
AASB 16 Leases
the unrealised change in fair value on financial assets and liabilities
non-recurring revenues and transaction costs associated with investment acquisitions and financing activities.
Statutory EBITDA for 2024 increased by 73% on the prior year, primarily as a result of the transaction settled on 3 January 2024 which entitled
NGI to all distributions from the NGI Strategic portfolio for the 2024 financial year:
2020
2021
2022
2023
2024
Statutory EBITDA (USD millions)
30.518
37.803
51.220
54.700
94.842
Adjusted EBITDA (USD millions)
30.518
31.587
46.528
48.814
90.507
Net profit after tax (USD millions)
18.148
26.755
38.701
35.512
66.305
Cash flows from operating activities (USD millions)
32.562
22.199
89.738
37.856
57.992
Dividends per share for the financial year (US cents)
9.0
9.0
11.5
3.0
3.0
Dividends paid during the financial year (USD millions)
28.208
18.421
31.414
9.004
9.019
Dividend payout as a % of Adjusted EBITDA
75%
80%1
52%
19%
18%
Closing share price (dollars)
AUD 1.19
AUD 1.78
AUD 1.25
AUD 1.33
AUD 2.03
Change in share price (dollars)
▼ AUD 2.75
▲ AUD 0.59
▼ AUD 0.53
▲ AUD 0.08
▲ AUD 0.70
1 2021 payout ratio calculated on Adjusted EBITDA of $31.587 million as calculated in the prior year before comparatives were restated to align
with current year methodology.
Navigator Global Investments Limited
Directors’ Report
Remuneration report – Audited (continued)
Page 28
Variable compensation for the 2024 financial year
Lighthouse variable compensation arrangements
The Lighthouse general bonus pool is determined with reference to Lighthouse EBITDA (ex-bonuses and performance fees). The Board may
exercise discretion to increase the bonus pool where it considers the circumstances warrant additional remuneration. The Board has set the
following arrangements for determining the size of the Lighthouse short term cash bonus pools:
Lighthouse general pool
Company performance
metric
Basis of variable
remuneration
Lighthouse EBITDA
(excluding performance fees,
before bonuses and adjusted
for other specified items)
30-35% allocated to
Lighthouse general bonus
pool
All Lighthouse staff are eligible to participate in the Lighthouse
general bonus pool, the amount of which is calculated as 30-35%
of Lighthouse’s EBITDA (before the bonus pools and excluding
performance fee revenue and adjusted for other specified items).
Allocation of the Lighthouse general bonus pool to staff (other
than as noted below) is determined by the CEO in
accordance with remuneration structure and guidelines
established by the Remuneration and Nominations
Committee.
A bonus for the CEO is determined and approved by the
board based on an assessment of his performance. This
bonus amount forms part of the overall Lighthouse general
bonus pool.
Certain senior executives have specific short term compensation
arrangements which are linked to specific metrics such as revenue
and EBITDA of the business lines/products for which they are
responsible. Details on these arrangements for KMPs are outlined
on the following pages.
Lighthouse incentive fee pool
Company performance
metric
Basis of variable
remuneration
Performance fees
50% allocated to Lighthouse
incentive fee bonus pool
Senior members of the Lighthouse investment team are
eligible to participate in a bonus pool determined as 50% of
performance fee revenue earned by the various funds managed by
Lighthouse.
This pool is allocated at the discretion of the CEO based on his
assessment of the contribution of each eligible staff member to the
creation of the performance fee revenue.
The allocation of the pool occurs after determining the bonus
amounts for the small number of senior investment employees
who have performance conditions which apply to their annual
bonuses. The specific performance conditions are set to
incentivise those employees to achieve outcomes directly relevant
to their roles and responsibilities, such as achievement of a
defined level of net performance return for a particular fund or
portfolio for which they are responsible. There is generally a
minimum and a maximum applied to these bonuses.
Investment team staff members may still also receive an allocation
from the general bonus pool.
The Board retains the discretion to vary the final amounts approved after calculation based on the above pools, to ensure that they can also
factor in extenuating circumstances. The Board approved $8.9 million of additional discretionary bonuses for the FY2024 year above the
amounts calculated under the Lighthouse general bonus pool and Lighthouse incentive fee pool as outlined above. This approval was on the
basis of ensuring retention of key staff in what is currently a very competitive environment in the US asset management sector, and incorporates
the realignment of the Lighthouse CEO’s compensation from the 2024 financial year.
NGI Strategic and Corporate variable compensation arrangements
Discretionary short-term bonuses totalling $2.4 million (2023: $1.1 million) were awarded for staff who:
directly contributed to the operation of the listed parent company, namely staff involved in finance and company secretarial functions in
Australia; and/or
were responsible for the successful completion of the NGI Strategic investment transactions completed during the 2024 financial year.
These awards were based on the relevant individual’s contribution in assessing, negotiating and implementing complex transactions.
The increase on the prior year reflects the new NGI CEO who commenced in October 2023, an acknowledgement of the staff involved in
delivering on the significant transaction to early settle the 2026 redemption liability, and is awarded in the context of the NGI Group’s
exceptionally strong financial performance for the 2024 year.
The Remuneration and Nominations Committee recommended these bonuses which were approved by the Board.
Navigator Global Investments Limited
Directors’ Report
Remuneration report – Audited (continued)
Page 29
Key management personnel remuneration disclosures
Those appointed to key management personnel positions are outlined below:
Name
Position
Term
Non-Executive Directors
Michael Shepherd
Chairman and Non-Executive Director
Full year
Nicola Grenham
Non-Executive Director
Full year
Suvan de Soysa
Non-Executive Director
Full year
Lindsay Wright
Non-Executive Director
Appointed 7 November 2023
Marc Pillemer
Non-Executive Director, Blue Owl nominee
Appointed 28 February 2024
Cathy Hales
Non-Executive Director
Resigned 30 October 2023
Executive Director
Stephen Darke
NGI Chief Executive Officer
Commenced KMP duties
27 October 2023
Sean McGould
Chief Executive Officer and Chief Investment Officer, Lighthouse
Investment Partners, LLC
Full year
Executives
Amber Stoney
Chief Financial Officer and Company Secretary, Navigator Global
Investments Limited
Full year
Ross Zachary
NGI Chief Investment Officer & Head of Strategic Investments
Full year
Ben Browning
President, Lighthouse Investment Partners, LLC
Full year
Rob Swan
Chief Operating Officer (COO), Lighthouse Investment Partners, LLC
Ceased KMP duties
27 October 2023
Contractual and remuneration arrangements for
Non-Executive Directors
Service Agreement
Navigator enters into agreements with each non-executive director
at the time of their appointment as a director. Each agreement
sets out the rights and obligations of the director, including:
Attendance at board meetings
Prior approval for acceptance of additional roles outside
Navigator
Independence requirements and notification of interests
Remuneration
Provision of a Deed of Indemnity, Insurance and Access
Directors are also required to enter a Director’s Interest Disclosure
Agreement at the time of their appointment.
Non-executive directors may receive director fees. The
Company’s policy is to remunerate non-executive directors at
market rates for comparable companies having regard to the time
commitments and responsibilities assumed. The aggregate of non-
executive director fees is capped at a maximum of $750,000 per
annum (including superannuation), as approved by shareholders
at the AGM held on 20 November 2014.
Fees paid to non-executive directors are USD, and for the 2024
financial year were as follows:
Chairman
USD 170,000 per annum
(plus superannuation)
Non-executive directors
USD 100,000 per annum
(plus superannuation where
applicable)
Australian based non-executive directors are also entitled to
superannuation. For the financial year ended 30 June 2024
actual remuneration for non-executive directors was $501,029
(2023: $508,021).
M Pillemer, who holds the position as director and was
nominated by GPSC Associates in accordance with the
Shareholder Agreement. Mr Pillemer not entitled to receive
remuneration from the Company for his role as a nominee
non-executive director.
Termination
A director may resign at any time by providing notice to the
Chairman.
Non-executive directors are required to be elected by shareholders
at the next annual general meeting following their appointment.
Directors do not have a fixed term, however they must be re-
elected by shareholders at an annual general meeting at least
every three years.
A director may be requested to retire from the Board should they
fail to attend three consecutive board meetings without a leave of
absence. In addition, a director may cease to hold office if they
become a disqualified person under the Corporations Act 2001.
Non-executive directors are not entitled to any benefits or
payments on retirement from office.
Annual bonus arrangements
Non-executive directors are not entitled to participate in executive
remuneration schemes, may not receive performance-linked equity
or bonus payments, and are not provided with retirement benefits
other than statutory superannuation entitlements.
Participation in incentive plans
Non-executive directors are not entitled to participate in any
incentive plans.
Navigator Global Investments Limited
Directors’ Report
Remuneration report – Audited (continued)
Page 30
Key management personnel remuneration disclosures (continued)
Contractual and remuneration arrangements for Executive Directors and senior executives
The Group has entered into service agreements with each member of key management personnel. These agreements specify the duties and
obligations to be fulfilled.
NGI Chief Executive Officer (NGI CEO)
Service Agreement
The Australian based NGI CEO commenced on 9 October 2023
and is engaged pursuant to a full time executive services
agreement for an annual base salary of A$775,000 per annum
exclusive of superannuation, and a short-term incentive bonus of
up to 200% of this amount subject to achievement of agreed key
performance indicators.
Termination
The executive services agreement has a 3 year term, with an
option for Navigator to extend the agreement for an additional
year.
Navigator may terminate the NGI CEO’s executive services
agreement at any time without notice, for a number of reasons
including bankruptcy, gross negligence or wilful and serious
misconduct. In these circumstances there is no entitlement to a
termination payment. The CFO may terminate the agreement at
any time by giving 6 months’ notice and Navigator may terminate
the agreement at any time by giving 6 months’ notice or payment
in lieu.
Annual bonus arrangements and 2024 financial year
award
The NGI CEO is entitled to a short-term incentive bonus of up to
200% of his base salary. The Board may exercise its discretion to
award an additional bonus amount. Mr Darke was awarded a
bonus of A$1,162,500 for the 2024 financial year based on the
assessment of his performance.
The NGI CEO’s key performance indicators (KPIs) and whether
they were achieved for the 2024 financial year are outlined below:
KPI category
Met for
FY2024
Market engagement and shareholder
value
✓
Financial
✓
People
✓
Operations, Risk Management and
Regulatory
✓
Participation in incentive plans
The NGI CEO is eligible to participate in the Performance Rights
Plan, a long-term incentive plan as outlined on pages 21-24. The
board has offered a grant to the NGI CEO of 1,000,000
Performance Rights with a performance period ending 30 June
2026, which will be presented for approval by the shareholders at
the 2024 Annual General Meeting.
Lighthouse Chief Executive Officer & Chief
Investment Officer (Lighthouse CEO)
Service Agreement
The Lighthouse CEO entered into a service agreement
commencing on 7 March 2011. The agreement was for an initial
term of four years and thereafter automatically extend for a one-
year term unless either the Group or the Lighthouse CEO gives not
less than sixty days’ notice of their intention not to extend the
agreement.
The Lighthouse CEO is entitled to a base salary of $1,000,000, as
well as retirement and health benefits.
The Lighthouse CEO also receives the benefit of holding
investments in Lighthouse managed funds without incurring any
fees. There is no incremental cost incurred by the Group in
providing fee-free investment management services. Nil fee
arrangements is common practice in the US asset management
industry and is viewed positively by clients and potential clients as
it demonstrates an alignment of interests to maximises investment
results.
Termination
The Lighthouse CEO may give notice not to automatically renew
his service agreement each year at any time by giving 30 days
notice.
The Group may terminate the agreements of US-based executives
at any time for Good Cause as defined under their service
agreement. In these circumstances there is no entitlement to a
termination payment.
The Group may terminate the agreement for any reason at any
time by giving not less than sixty days’ notice.
The employees may terminate their agreements at any time on
thirty days’ notice for Good Reason as defined under their service
agreement, which may include circumstances where the Group
fails to comply in any material respect with the terms of the
agreement, or there is a material and unconsented change to
responsibilities.
Annual bonus arrangements and 2024 financial year
award
The Lighthouse CEO does not have any agreed key performance
indicators, and his annual bonus is determined at the discretion of
the Board based on its assessment of his performance during the
year.
The Lighthouse CEO is based in the US and from the end of October
2023 he has been solely functioning in the role of Chief Executive
Officer and Chief Investment Officer of Lighthouse.
The Board considers that the Lighthouse CEO’s remuneration
needs to encompass both of these roles, and that it should
also be structured so that it is consistent with remuneration
principles which operate in the United States alternative asset
management industry.
The Board has awarded the Lighthouse CEO a bonus of
$3,125,000 for the year ended 30 June 2024 (2023:
$350,000).
Navigator Global Investments Limited
Directors’ Report
Remuneration report – Audited (continued)
Page 31
Key management personnel remuneration disclosures (continued)
Contractual and remuneration arrangements for Executive Directors and senior executives (continued)
In awarding this discretionary amount, the Board has taken
into account the following factors:
investment results achieved for clients;
achievement of board-approved budgets and targets,
strategic goals, capital and business restructuring and
development of new business opportunities;
group financial results and dividends paid to
shareholders; and
market levels of compensation for a CEO/CIO operating
a similar business in the United States.
Potential Termination Benefits
Under the terms of his services agreement, the Lighthouse CEO
may be entitled to the following termination benefits:
A severance payment of up to $1 million on cessation of
employment, except where their employment has been
terminated for Cause as defined by their employment
contract. Any severance payment made is in lieu of any
unpaid short-term incentive bonus which they would
otherwise be entitled to receive for their performance during
the relevant year in which they ceased employment. The
amount of the severance payment will be pro-rated based on
the number of days of service provided by the US Relevant
Executive during a year prior to cessation of their
employment.
Restraint payments may be paid to enforce post-employment
restraint clauses if considered necessary and/or appropriate
to protect matters such as non-compete periods, non-solicit
periods and confidential information or intellectual property. In
some jurisdictions, restraint clauses may be legally
unenforceable, or difficult to successfully enforce, without
payment.
The amount of the restraint payment is determined based on
the following circumstances:
If employment ceases due to termination for Cause, their
providing notice to the Company, or them not renewing
their contract then:
-
they will be entitled to restraint payments for 6
months at their monthly base salary; and
-
the Board will have the option, but not the
obligation, to extend the restraint period for up to
an additional 6 months by paying the Relevant
Executive a restraint payment of up to $166,667
per month.
If employment ceases due to the Company providing the
required contractual notice, the Board has the discretion,
but not the obligation, to enforce the restraint clauses in
the employment contract for up to 12 months by paying
the Relevant Executive a restraint payment of up to
$166,667 per month.
These payments are capped at a maximum of $2 million.
Shareholders approved the above potential termination benefit
arrangements at the 2021 Annual General Meeting.
Participation in incentive plans
The Lighthouse CEO is eligible to participate in the Performance
Rights Plan, a long-term incentive plan as outlined on pages 21-
26. Grants made in the current period are outlined on pages 34-35.
NGI Chief Investment Officer & Head of NGI
Strategic Investments (NGI CIO)
Service Agreement
Upon his promotion, the NGI CIO entered into a revised service
agreement effective from 1 July 2023. There is no defined term
period under these service agreements, and their employment
continues until terminated by the Company in accordance with the
terms of the agreement.
Under the agreement, the NGI CIO is entitled to an annual base
salary of $500,000, as well as retirement and health benefits.
Termination
The Group may terminate the agreements with the NGI CIO at any
time for Good Cause as defined under their service agreement. In
these circumstances there is no entitlement to a termination
payment.
The Group may terminate the agreement for any reason at any
time by giving not less than sixty days’ notice.
The NGI CIO may terminate his agreement at any time on thirty
days’ notice for Good Reason as defined under their service
agreement, which may include where there is a material reduction
in the compensation opportunities, there is a material change to
the Group’s strategy or there is a change of control of the
Company.
The NGI CIO may terminate the agreement and their employment
at any time for any reason other than those noted above by giving
not less than sixty days’ notice.
Annual bonus arrangements and 2024 financial year
award
The NGI CIO is responsible for the NGI Strategic Investments
business segment, and under his services agreement is entitled to
an annual bonus of between 100% and 200% of his base salary.
The NGI CIO did not have any agreed performance indicators for
the 2024 financial year, and the Board determined at their
discretion that the NGI CIO receive his maximum bonus of
$1,000,000 in recognition of his achievements during the year.
Participation in incentive plans
The NGI CIO is eligible to participate in the Performance Rights
Plan, a long-term incentive plan as outlined on pages 21-26.
Grants made in the current period are outlined on pages 34-35.
The NGI CIO was paid a one-time amount of $225,000 upon
settlement of the 2026 redemption liability transaction in
cancellation of his existing Alignment Grant from 2021.
Navigator Global Investments Limited
Directors’ Report
Remuneration report – Audited (continued)
Page 32
Key management personnel remuneration disclosures (continued)
Contractual and remuneration arrangements for Executive Directors and senior executives
Lighthouse President
Service Agreement
The Lighthouse President’s executive services agreement was
amended effective 1 January 2024. There is no defined term
period under this service agreement, and his employment
continues until terminated by either the Lighthouse President or
the Group in accordance with the terms of the agreement.
The Lighthouse President is entitled under the agreement to a
base salary of $350,000, plus retirement and health benefits. He
is also entitled to a minimum bonus amount not less than
$650,000.
The Lighthouse President may also receive the benefit of holding
investments in Lighthouse managed funds without incurring any
fees. There is no incremental cost incurred by the Group in
providing fee-free investment management services. Nil fee
arrangements is common practice in the US asset management
industry and is viewed positively by clients and potential clients as
it demonstrates an alignment of interests to maximises investment
results.
Termination
The Group may terminate the agreement of the Lighthouse
President at any time for Good Cause as defined under their
service agreement. In these circumstances there is no entitlement
to a termination payment.
The Group may terminate the agreement for any reason at any
time by giving not less than sixty days’ notice.
The employees may terminate their agreements at any time on
thirty days’ notice for Good Reason as defined under their service
agreement, which may include circumstances where the Group
fails to comply in any material respect with the terms of the
agreement, or there is a material and unconsented change to
responsibilities. For the CEO and Managing Director of Strategic
Corporate Development, NGI Strategic Holdings, Good Reason
includes where there is a material reduction in the compensation
opportunities, there is a material change to the Group’s strategy or
there is a change of control of the Company.
Annual bonus arrangements and 2024 financial year
award
The performance conditions for components of the President’s
bonus have been set to incentivise revenue growth across the
Lighthouse business through the Revenue Target bonus, as well
as ensuring a focus on cost management through the EBITDA
Target bonus.
KPI category
Met for FY2024
Revenue target:
50% of fixed remuneration if Top Line
revenue growth target achieved; OR
100% of fixed remuneration if Top Line
revenue growth target achieved
✓
X
EBITDA Target
25% of fixed remuneration if EBITDA margin
target is achieved
✓
Potential Termination Benefits
To the extent the Company terminates the Employee without Good
Cause or the Employee terminates this Agreement for Good
Reason, Employee shall be entitled to a one-time severance
payment equal to the greater of:
(i)
His annual bonus earned in accordance with the
performance targets outlined in his service
agreement, pro-rated to the Termination Date; or
(ii)
an amount equal to the number of calendar days
between the Termination Date and the end of the
last financial year multiplied by $2,740.
Participation in long-term incentive plans
The Lighthouse President is eligible to participate in any long-term
incentive plan that may be implemented by Lighthouse. No such
plans are currently in place.
Chief Financial Officer & Company Secretary (CFO)
Service Agreement
The Australian-based CFO is engaged pursuant to an executive
services agreement for 30 hours per week. There is no defined
term period under this service agreement, and her employment
continues until terminated by either the CFO or the Company in
accordance with the terms of the agreement.
The CFO’s base salary is A$425,000 per annum exclusive of
superannuation.
Termination
The Group may terminate the CFO’s executive services
agreement at any time, without notice for a number of reasons
including bankruptcy, gross negligence or wilful and serious
misconduct. In these circumstances there is no entitlement to a
termination payment. The CFO may terminate the agreement at
any time by giving 6 months’ notice and the Group may terminate
the agreement at any time by giving 6 months’ notice or payment
in lieu.
Annual bonus arrangements and 2024 financial year
award
The CFO is entitled to a short-term incentive bonus of up to 50% of
her base salary. The Board may exercise its discretion to award
an additional bonus amount.
The CFO did not have defined key performance indicators for the
2024 year, and the Board approved a discretionary bonus of
A$212,500 in acknowledgement of her contributions to the Group’s
success in the financial year.
The CFO also received a bonus payment of A$150,000 in
February 2024 linked to her role in the successful completion of
the settlement of the 2026 redemption liability.
Participation in incentive plans
The CFO is eligible to participate in the Performance Rights Plan,
a long-term incentive plan as outlined on pages 21-24. Grants
made in the current period are outlined on pages 36-37.
Navigator Global Investments Limited
Directors’ Report
Remuneration report – Audited (continued)
Page 33
Key management personnel remuneration disclosures (continued)
Directors’ and executive officers’ remuneration
Benefit Category
Short-term
Post-
employment
Other long-term
Total
Salary & fees
Bonus
Other1
Pension &
Superannuation
Share based
payments
Long service
leave
Non-Executive Directors
Michael Shepherd
2024
170,000
-
-
18,021
-
-
188,021
2023
170,000
-
-
17,021
-
-
187,021
Nicola Grenham
2024
100,000
-
-
-
-
-
100,000
2023
100,000
-
-
-
-
-
100,000
Suvan de Soysa
2024
100,000
-
-
11,000
-
-
111,000
2023
100,000
-
-
10,500
-
-
110,500
Lindsay Wright2
2024
65,007
-
-
-
-
-
65,007
Marc Pillemer3
2024
-
-
-
-
-
-
-
Cathy Hales4
2024
33,333
-
-
3,667
-
-
37,000
2023
100,000
-
-
10,500
-
-
110,500
Executive Director
Stephen Darke5
2024
383,639
773,860
-
13,389
-
6,144
1,177,032
Sean McGould
2024
1,000,000
3,125,000
25,474
20,700
(8,986)
-
4,162,188
2023
1,000,000
350,000
24,749
19,800
138,914
-
1,533,463
Executives
Ross Zachary
2024
500,000
1,000,000
25,474
31,950
798,638
2,356,062
2023
300,000
780,000
24,843
8,734
291,010
-
1,404,587
Ben Browning
2024
350,000
1,400,000
25,473
20,700
-
-
1,796,173
2023
350,000
650,000
24,749
19,800
-
-
1,044,549
Amber Stoney
2024
279,700
239,216
-
17,945
262,275
10,107
809,243
2023
271,120
132,600
-
17,020
134,956
6,877
562,573
Rob Swan6
2024
100,000
-
8,558
-
-
-
108,558
2023
300,000
800,000
24,749
19,800
-
-
1,144,549
Total
2024
3,081,679
6,538,076
84,979
137,372
1,051,927
16,251
10,910,284
2023
2,691,120
2,712,600
99,090
123,175
564,880
6,877
6,197,741
1 Other short-term fixed remuneration amounts relate to health care benefits paid on behalf of US
based staff.
2 Appointed as a director 7 November 2023
3 Appointed as a director 6 March 2024. Mr Pillemer does not receive remuneration from the
Company.
4 Resigned as a director 20 October 2023
5 Commenced employment on 10 October 2023 and appointed as a director on 30 October 2023
6 Ceased to be key management personnel on 27 October 2023
Navigator Global Investments Limited
Directors’ Report
Remuneration report – Audited (continued)
Page 34
Key management personnel remuneration disclosures (continued)
Analysis of bonuses & share based payment awards included in remuneration
Details of the short-term and long-term incentive bonuses awarded as remuneration to key management personnel of the Group in the current
reporting period are detailed below:
1
Short-term bonus is paid annually on a financial year basis. No amounts vest in future financial years in respect of the financial year
ended 30 June 2024.
2
Long-term incentive share based payment arrangements are subject to service and performance hurdles measured at various
financial year ends and subject to Board approval shortly thereafter. Details included in following sections of this report.
Analysis of equity instruments granted as remuneration
The Group has a Performance Rights Plan in place for eligible executives. Details of all equity instruments granted are summarised in the
following tables:
Equity instruments granted
1 Includes instruments held directly, indirectly and beneficially by KMP.
2 Modified during FY24 to remove performance hurdles
Of the total performance rights issued to employees in the current year, a portion are rights measured against earnings and a portion are
measured on total shareholder return, each with specific service and performance conditions attached. The fair value at grant date is
determined for each right based on a Monte Carlo simulation for the specific terms and conditions of each option. All performance rights have
zero exercise price and are subject to continuation of employment conditions.
During the period tranches issued to Ross Zachary and Amber Stoney for 2021 and 2022, both EBITDA and TSR rights, were modified during
the period. The modification removed need to achieve performance hurdles whilst the service conditions remained unchanged. The incremental
fair value as a result of the modifications to the EBITDA performance rights was $0.7/award for the 2021 tranche and $0.38/award for the 2022
tranche. The incremental fair value was measured using the same option pricing model as the original rights granted.
Proportion of
remuneration paid that
is performance based
Short-term incentives1
Long-term incentives2
% awarded
% forfeited
% Vested in
year
% Forfeited in
year
Stephen Darke
66%
100%
0%
n/a
n/a
Sean McGould
75%
100%
0%
0%
0%
Ross Zachary
76%
100%
0%
0%
0%
Ben Browning
42%
80%
20%
0%
0%
Amber Stoney
62%
100%
0%
0%
0%
Tranche
Equity
instruments
granted1
Grant date
Vesting &
exercise date
Fair value per
award at grant
date ($)
Expiry date
2024
Ross Zachary
2023 PR - PBT
600,000
22/9/2023
30/06/2026
0.79
22/9/2027
2023 PR - TSR
400,000
0.52
Amber Stoney
2023 PR - EBITDA
152,905
22/9/2023
30/06/2026
0.79
22/9/2027
2023 PR - TSR
152,905
0.52
2023
Sean McGould
2021 PR - EBITDA
152,905
30/9/2022
30/06/2024
0.68
30/9/2026
2021 PR - TSR
152,905
0.16
2022 PR - EBITDA
152,905
17/11/2022
30/06/2025
0.70
17/11/2026
2022 PR - TSR
152,905
0.36
Ross Zachary
2021 PR – EBITDA2
275,230
30/9/2022
30/06/2024
0.68
30/9/2026
2021 PR - TSR2
275,230
0.16
2022 PR - EBITDA2
275,230
30/9/2022
30/06/2025
0.64
30/9/2026
2022 PR - TSR2
275,230
0.33
Amber Stoney
2021 PR - EBITDA2
152,905
30/9/2022
30/06/2024
0.68
30/9/2026
2021 PR - TSR2
152,905
0.16
2022 PR - EBITDA2
152,905
30/9/2022
30/06/2025
0.64
30/9/2026
2022` PR - TSR2
152,905
0.33
Navigator Global Investments Limited
Directors’ Report
Remuneration report – Audited (continued)
Page 35
Key management personnel remuneration disclosures (continued)
Analysis of equity instruments granted as remuneration (continued)
Summary of equity instruments granted, vested or lapsed during the year for KMP
1
Includes instruments held directly, indirectly and beneficially by KMP.
2
Vesting subject to Board review and approval which is yet to occur.
There were no share based payment arrangements which vested or were forfeited during the period.
The Alignment Grant made to the NGI CIO was cancelled during the period and a payment made in lieu, as the arrangement related to the
Strategic Portfolio transaction which settled early. There have been no alterations to the terms or conditions of the grants since grant date.
Grant date
Vesting &
exercise
date
Beginning
balance
unvested
Number
Granted as
compensation1
Number
Cancelled
Number
Toal vested
and
exercisable
Number
Ending
balance
unvested
Number
Maximum
value in
future
periods ($)
2024
Sean McGould
30/9/2022
30/6/20242
305,810
-
-
-
305,810
34,564
17/11/2022
30/6/2025
305,810
-
-
-
305,810
124,792
Ross Zachary
1/7/2021
30/6/2025
120,976
-
(120,976)
-
-
-
1/7/2021
30/6/2026
120,976
-
(120,976)
-
-
-
30/9/2022
30/6/20242
550,459
-
-
-
550,459
-
30/9/2022
30/6/2025
550,459
-
-
-
550,459
149,113
22/9/2023
30/6/2026
-
1,000,000
-
-
1,000,000
453,937
Amber Stoney
30/9/2022
30/6/20242
305,810
-
-
-
305,810
-
30/9/2022
30/6/2025
305,810
-
-
-
305,810
82,840
22/9/2023
30/6/2026
-
305,810
-
-
305,810
163,453
2023
Sean McGould
30/9/2022
30/6/2024
-
305,810
-
-
305,810
42,867
17/11/2022
30/6/2025
-
305,810
-
-
305,810
107,502
Ross Zachary
1/7/2021
30/6/2025
120,976
-
-
-
120,976
42,867
1/7/2021
30/6/2026
120,976
-
-
-
120,976
99,555
30/9/2022
30/6/2024
-
550,459
-
-
550,459
77,161
30/9/2022
30/6/2025
-
550,459
-
-
550,459
179,199
Amber Stoney
30/9/2022
30/6/2024
-
305,810
-
-
305,810
55,044
30/9/2022
30/6/2025
-
305,810
-
-
305,810
61,698
Navigator Global Investments Limited
Directors’ Report
Remuneration report – Audited (continued)
Page 36
Additional information
Movement in shares
The movement during the reporting period in the number of shares in the Company held, directly, indirectly or beneficially, by key management
personnel, including their related parties, is as follows:
Balance
1 July 2023
Purchases
Sales
Balance
30 June 2024
Directors1
Michael Shepherd
195,270
77,212
-
272,482
Sean McGould
19,438,084
7,685,283
-
27,123,367
Nicola Grenham
6,450
32,318
-
38,768
Suvan de Soysa
150,000
125,000
-
275,000
Stephen Darke2
74,626
128,347
-
202,973
Lindsay Wright
-
-
-
-
Marc Pillemer3
-
-
-
-
Executives
Ross Zachary
40,000
15,816
-
55,816
Amber Stoney
180,374
8,158
-
188,532
1
Refer to page 14-17 for details on direct and indirect shareholdings for each Director.
2
Stephen Darke was appointed as a director on 31 October 2023, and the opening balance represents his existing holding at the time of
his appointment
3
Marc Pillemer does not have any direct holdings. Mr Pillemer is a nominee director for GPSC Associates, who hold 226,366,357 million
ordinary shares at the end of the year, and 90,289 Convertible Notes which will convert to 60,222,761 ordinary shares.
Other transactions with key management personnel
Other than is disclosed above, there were no other transactions with key management personnel during the year.
This marks the end of the remuneration report.
Navigator Global Investments Limited
Directors’ Report
Page 37
Significant changes in state of affairs
In the opinion of the directors there were no significant changes in
the state of affairs of the Group that occurred during the financial
period not otherwise disclosed in this financial report.
Events subsequent to end of financial period
On 23 August 2024, the Group entered into definitive
documentation to acquire additional ownership in Invictus Capital
Partners for total consideration of $14.85 million. The transaction
will increase the investment on the Group’s balance sheet. A
portion of the consideration will be deferred until the first
anniversary.
There is no expected impact on the profit and loss upon
completion of the transaction as any associated transaction costs
will be capitalised into the investment.
Other than the above, there has not arisen in the interval between
the end of the reporting period and the date of signing this report,
any item, transaction or event of a material nature, likely to affect
significantly the operations of the Group, the results of those
operations, or the state of affairs of the Group, in future financial
years.
Environmental regulation
The Group is not subject to any particular or significant
environmental regulation under any Australian Commonwealth,
State or Territory legislation.
Indemnification and insurance
The Company has a Deed of Indemnity, Insurance and Access in
place with each of the Directors (‘the Deeds’). Pursuant to the
Deeds, the Company indemnifies each Director to the extent
permitted by law for losses and liabilities incurred by the Director
as an officer of the Company or of a subsidiary. This indemnity is
in place for a 7 year period from the cessation of directorship.
In addition, the Company will advance reasonable costs incurred
or expected to be incurred by the Director in defending relevant
proceedings on terms determined by the Board. No such
advances were made during the financial period.
During the period, the Group paid insurance premiums to insure
the Directors and Officers of the Company. The terms of the
contract prohibit the disclosure of the premiums paid.
Rounding of amounts
In accordance with ASIC Corporations (Rounding in
Financial/Directors’ Reports) Instrument 2016/191
dated 24 March 2016, amounts in the financial report and
directors’ report have been rounded off to the nearest
thousand dollars, unless otherwise stated.
Auditor
Ernst & Young is the auditor of the Group in accordance with
section 327 of the Corporations Act 2001. Details of remuneration
paid to auditors is presented in Note 25 of the financial statements.
Non-audit services
There were no non-audit services provided by the entity’s auditors
during the financial year.
Indemnification
To the extent permitted by law, the Company has agreed to
indemnify its auditors, Ernst & Young Australia, as part of the
terms of its audit engagement agreement against claims by third
parties arising from the audit (for an unspecified amount).
No payment has been made to indemnify Ernst & Young Australia
during or since the end of the financial year.
Auditor’s independence declaration
The lead auditor’s independence declaration as required under
section 307C of the Corporations Act 2001 is set out on page 38
and forms part of the directors’ report for the financial year ended
30 June 2024.
This report is made in accordance with a resolution of directors:
Michael Shepherd, AO
Suvan de Soysa
Chairman and
Non-Executive Director
Non-Executive Director
Sydney, 27 August 2024
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
Page 38
Ernst & Young
111 Eagle Street
Brisbane QLD 4000 Australia
GPO Box 7878 Brisbane QLD 4001
Tel: +61 7 3011 3333
Fax: +61 7 3011 3100
ey.com/au
Auditor’s Independence Declaration to the Directors of Navigator
Global Investments Limited
As lead auditor for the audit of Navigator Global Investments Limited for the financial year ended
30 June 2024, I declare to the best of my knowledge and belief, there have been:
a) no contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit;
b) no contraventions of any applicable code of professional conduct in relation to the audit; and
c) no non-audit services provided that contravene any applicable code of professional conduct in
relation to the audit.
This declaration is in respect of Navigator Global Investments Limited and the entities it controlled
during the financial year.
Ernst & Young
Nathan Young
Partner
27 August 2024
Navigator Global Investments Limited
2022 Annual Report
vPage 39
FINANCIAL
REPORT
Navigator Global Investments Limited
2024 Annual Report
Page 40
CONTENTS
Income statement
41
Statement of comprehensive income
42
Statement of financial position
43
Statement of changes in equity
44
Statement of cash flows
46
Notes to the financial statements
47-87
Consolidated entity disclosure statement
88
Directors’ declaration
89
Independent auditor’s report
90
Results for the year
Operating assets and
liabilities
Capital and risk
1.
Operating segments
2.
Revenue
3.
Expenses
4.
Finance income & costs
5.
Cash
6.
Income tax
7.
Dividends
8.
Earnings per share
9.
Acquisitions
47
49
51
53
54
55
57
58
59
10. Trade receivables & other
assets
11. Investments at fair value
12. Investments in joint ventures
and associates
13. Plant and equipment
14. Leases
15. Intangible assets
16. Trade and other payables
17. Employee benefits
18. Other financial liabilities
61
62
63
.
64
65
68
70
70
71
19. Capital management
20. Capital & reserves
21. Financial risk
management
73
74
75
Group structure
Other disclosures
Basis of preparation
22.
Group entities
23.
Parent entity
disclosures
82
83
24. Related parties
25. Auditors’ remuneration
26. Commitments &
contingencies
27. Subsequent events
84
85
85
85
28.
Corporate information
29.
Statement of
compliance
30.
Basis of measurement
31.
Functional and
presentation currency
32.
Other accounting
policies
86
86
86
86
86
Navigator Global Investments Limited
2024 Annual Report
The accompanying notes form part of these consolidated financial statements
Page 41
INCOME STATEMENT
For the year ended 30 June 2024
Consolidated USD’000
Note
2024
2023
Management fee revenue
2(a)
84,233
76,674
Performance fee revenue
2(a)
11,945
6,862
Revenue from reimbursement of fund operating expenses
2(a)
172,675
96,620
Revenue from provision of office space and services
2(a)
7,431
4,741
Total revenue
276,284
184,897
Other income
2(b)
72,962
31,815
Employee expenses
3(a)
(64,989)
(55,633)
Administration and other general expenses
3(b)
(191,740)
(110,915)
Depreciation and amortisation expense
3(c)
(7,501)
(5,592)
Share of profits / (loss) from joint ventures and associates
811
638
Results from operating activities
85,827
45,210
Finance income
4(a)
24,365
36,922
Finance costs
4(a)
(28,333)
(38,127)
Profit before income tax
81,859
44,005
Income tax expense
6(a)
(15,554)
(8,493)
Profit for the period
66,305
35,512
Attributable to equity holders of the parent
66,305
35,512
Earnings per share
Consolidated US cents
2024
2023
Basic earnings per share
8
16.62
14.38
Diluted earnings per share
8
14.94
11.22
Navigator Global Investments Limited
2024 Annual Report
The accompanying notes form part of these consolidated financial statements
Page 42
STATEMENT OF COMPREHENSIVE INCOME
For the year ended 30 June 2024
Consolidated USD’000
Note
2024
2023
Profit attributable to equity holders of the parent
66,305
35,512
Other comprehensive income
Other comprehensive income that may be reclassified to profit and
loss in subsequent periods:
Exchange differences on translation of foreign operations
4(b)
15
(325)
Other comprehensive income not to be reclassified to profit and
loss in subsequent periods:
Change in fair value of financial assets at fair value through other
comprehensive income
4(b)
3,001
(18,761)
Income tax on financial assets at fair value through other
comprehensive income
4(b)
4,292
(225)
Other comprehensive income for the year
7,308
(19,311)
Total comprehensive income for the year, net of tax
73,613
16,201
Attributable to equity holders of the parent
73,613
16,201
Navigator Global Investments Limited
2024 Annual Report
The accompanying notes form part of these consolidated financial statements
Page 43
STATEMENT OF FINANCIAL POSITION
As at 30 June 2024
Consolidated USD’000
Note
2024
2023
Assets
Cash
5
61,622
67,818
Trade receivables and other assets
10
32,872
24,382
Current tax assets
6(b)
2,466
93
Total current assets
96,960
92,293
Investments at fair value
11
523,085
495,918
Investment in joint ventures and associates
12
14,829
13,897
Plant and equipment
13
10,835
10,162
Right-of-use assets
14(a)
17,454
19,766
Deferred tax assets
6(c)
20,704
28,653
Intangible assets
15
98,464
96,308
Other non-current assets
10
5,523
5,928
Total non-current assets
690,894
670,632
Total assets
787,854
762,925
Liabilities
Trade and other payables
16
7,810
40,627
Lease liabilities
14(a)
3,641
3,595
Employee benefits
17
8,412
3,011
Current tax liabilities
6(b)
1,909
1,487
Other financial liabilities
18
79,553
97,938
Total current liabilities
101,325
146,658
Trade and other payables
16
365
350
Lease liabilities
14(a)
20,700
23,127
Employee benefits
17
18
9
Deferred tax liabilities
6(c)
2,232
-
Other financial liabilities
18
-
171,243
Total non-current liabilities
23,315
194,729
Total liabilities
124,640
341,387
Net assets
663,214
421,538
Equity
Share capital
20(a)
542,714
368,165
Non-share capital
20(b)
89,507
87,824
Reserves
91,526
45,389
Accumulated losses
(60,533)
(79,840)
Total equity attributable to equity holders of the parent
663,214
421,538
Navigator Global Investments Limited
2024 Annual Report
The accompanying notes form part of these consolidated financial statements
Page 44
STATEMENT OF CHANGES IN EQUITY
For the year ended 30 June 2024
Consolidated USD’000
Amounts attributable to equity holders of the parent
Note
Share
Capital
Non-share
Capital
Share
Based
Payments
Reserve
Fair Value
Reserve
Translation
Reserve
Parent
Entity
Profits
Reserve
Accumulated
Losses
Total
Equity
Balance at 1 July 2023
368,165
87,824
14,165
(19,885)
89
51,020
(79,840)
421,538
Net profit for the period
-
-
-
-
-
-
66,305
66,305
Transfer to parent entity profits reserve1
-
-
-
-
-
47,000
(47,000)
-
Other comprehensive income
Foreign Currency translation differences, net of
tax
-
-
-
-
15
-
-
15
Net change in fair value of financial assets at fair
value through other comprehensive income
-
-
-
3,001
-
-
-
3,001
Income tax on other comprehensive income
-
-
-
4,290
-
-
2
4,292
Total other comprehensive loss, net of tax
-
-
-
7,291
15
-
2
7,308
Total comprehensive income for the year, net
of tax
-
-
-
7,291
15
47,000
19,307
73,613
Issue of ordinary shares
20(a)
177,005
-
-
-
-
-
-
177,005
Modification of non-share capital
20(b)
-
1,683
-
-
-
-
-
1,683
Transaction costs
20(a)
(2,456)
-
-
-
-
-
-
(2,456)
Dividends to equity holders
7
-
-
-
-
-
(9,019)
-
(9,019)
Share based payments
3(a)
-
-
850
-
-
-
-
850
Total transactions with owners
174,549
1,683
850
-
-
(9,019)
-
168,063
Balance at 30 June 2024
542,714
89,507
15,015
(12,594)
104
89,001
(60,533)
663,214
1 Relates to the net profit of the parent entity (Navigator Global Investments Limited).
Navigator Global Investments Limited
2024 Annual Report
The accompanying notes form part of these consolidated financial statements
Page 45
STATEMENT OF CHANGES IN EQUITY (CONTINUED)
For the year ended 30 June 2024
Consolidated USD’000
Amounts attributable to equity holders of the parent
Note
Share
Capital
Non-share
Capital
Share
Based
Payments
Reserve
Fair Value
Reserve
Translation
Reserve
Parent
Entity
Profits
Reserve
Accumulated
Losses
Total
Equity
Balance at 1 July 2022
356,186
99,818
13,326
(1,758)
414
29,897
(84,366)
413,517
Net profit for the period
-
-
-
-
-
-
35,512
35,512
Transfer to parent entity profits reserve1
-
-
-
-
-
30,127
(30,127)
-
Other comprehensive income
Foreign Currency translation differences, net of
tax
-
-
-
-
(325)
-
-
(325)
Net change in fair value of financial assets at fair
value through other comprehensive income
-
-
-
(17,905)
-
-
(856)
(18,761)
Income tax on other comprehensive income
-
-
-
(222)
-
-
(3)
(225)
Total other comprehensive loss, net of tax
-
-
-
(18,127)
(325)
-
(859)
(19,311)
Total comprehensive income for the year, net
of tax
-
-
-
18,127
(325)
30,127
4,526
16,201
Convertible note redemption
20(a)
11,994
(11,994)
-
-
-
-
-
-
Transaction costs
20(a)
(15)
-
-
-
-
-
-
(15)
Dividends to equity holders
7
-
-
-
-
-
(9,004)
-
(9,004)
Share based payments
3(a)
-
-
839
-
-
-
-
839
Total transactions with owners
11,979
(11,994)
839
-
-
(9,004)
-
(8,180)
Balance at 30 June 2023
368,165
87,824
14,165
(19,885)
89
51,020
(79,840)
421,538
1 Relates to the net profit of the parent entity (Navigator Global Investments Limited).
Navigator Global Investments Limited
2024 Annual Report
The accompanying notes form part of these consolidated financial statements
Page 46
STATEMENT OF CASH FLOWS
For the year ended 30 June 2024
Consolidated USD’000
Note
2024
2023
Cash flows from operating activities
Cash receipts from operating activities
269,086
183,034
Cash paid to suppliers and employees
(244,962)
(165,764)
Cash generated from operations
24,124
17,270
Distributions received from investments
72,962
66,860
Profit share payment to non-controlling interests
(34,923)
(42,483)
Bank interest received
903
463
Interest paid
(1,326)
(1,017)
Lease interest received
201
232
Lease interest paid
(917)
(1,024)
Income taxes paid
(3,034)
(2,445)
Net cash from operating activities
5(b)
57,990
37,856
Cash flows from investing activities
Capital expenditure on plant and equipment & internally developed
software intangibles
(6,705)
(8,011)
Acquisition of product investments
(1,599)
(49)
Acquisition of equity investments (including deferred consideration
paid)
(21,906)
(51,656)
Dividends received from/ (investments in) joint ventures and
associates
12
147
127
Transaction cost associated with acquisitions & redemption liability
settlement
9
(4,562)
(1,975)
Payment of security deposits
(252)
(722)
Net cash used in investing activities
(34,877)
(62,286)
Cash flows from financing activities
Proceeds from borrowings
36,000
30,000
Repayment of borrowings & associated fees
(46,692)
(20,597)
Lease payments received from finance leases
508
503
Payment of principal portion of lease liabilities
(3,917)
(2,782)
Proceeds from issuing shares
20(a)
45,427
-
Transaction costs associated with the issue of shares
20(a)
(2,456)
(15)
Payments in settlement of redemption liability
9
(47,985)
-
Dividends paid to equity holders
7
(9,019)
(9,004)
Net cash used in financing activities
(28,134)
(1,895)
Net (decrease)/increase in cash
(5,021)
(26,325)
Cash balance at 1 July
67,818
94,041
Effect of exchange rate fluctuations on cash balances held in
foreign currencies
(1,175)
102
Cash balance as at 30 June
5(a)
61,622
67,818
Navigator Global Investments Limited
2024 Annual Report
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2024
Page 47
Results for the year
This section of the notes to the financial statements focuses on the results and performance of the Navigator Global Investments Limited Group
explaining the results for the year, segment information, taxation and earnings per share. Acquisitions made in recent times are significant to the
operating structure of the Group and have also been included in this section of the financial statements.
Where a material accounting policy or key estimate is specific to a single note, the policy or estimate is described in the note to which it relates.
1.
Operating segments
The Group has two reportable segments and are unchanged from the prior reporting period:
Lighthouse Group, which operates as a global absolute return funds manager for investment vehicles; and
NGI Strategic Group, holds several strategic investments on a minority basis. Including the strategic portfolio, Marble Capital and Invictus
Capital investments.
No operating segments have been aggregated to form the above reportable operating segments.
The ‘All other segments’ category includes the parent entity, investments in joint ventures & associates and adjustments to eliminate on
consolidation. Individually these are not considered a reporting segment.
With the Group’s substantial growth over the past two years the executive management team was expanded to include a newly appointed group
chief executive officer, Stephen Darke, Head of NGI Strategic and chief investment officer, Ross Zachary together Sean McGould (former group
chief executive officer), Lighthouse chief executive officer and chief investment officer. All three executives are collectively the chief executive
decision makers (“CODMs”) of the Group, each responsible for day-to-day operations of their respective areas and the implementation of the
group’s business strategy reporting to the Board of directors. Internal management reports are provided to the CODMs on a monthly basis
including separate analysis for the Lighthouse, NGI Strategic & NGI Corporate divisions to monitor the operating results of its business for the
purpose of making decisions about resource allocation and performance assessment.
Divisional performance is evaluated based on the financial information as set out below, as well as other key metrics such as Assets under
Management and the average management fee rate.
Navigator Global Investments Limited
2024 Annual Report
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2024
Page 48
1.
Operating segments (continued)
Reportable Segments
All other segments &
Eliminations
Consolidated
USD’000
Lighthouse
NGI Strategic
Total reportable
segments
2024
2023
2024
2023
2024
2023
2024
2023
2024
2023
Revenue
95,932
83,360
-
-
95,932
83,360
246
176
96,178
83,536
Other revenue
180,010
101,280
-
-
180,010
101,280
96
81
180,106
101,361
Total revenue from contracts with
customers
275,942
184,640
-
-
275,942
184,640
342
257
276,284
184,897
Other income
-
-
72,962
31,815
72,962
31,815
-
-
72,962
31,815
Share of profit from associates & joint
ventures
-
-
-
-
-
-
811
638
811
638
Employee expenses (excludes non-operating)
(55,998)
(51,627)
(3,040)
(2,186)
(59,038)
(53,813)
(3,770)
(1,820)
(62,808)
(55,633)
Operating expenses (excluding depreciation
and amortisation)
(184,615)
(108,314)
(1,777)
(1,687)
(186,392)
(110,001)
206
(51)
(186,186)
(110,052)
Result from operating activities
35,329
24,699
68,145
27,942
103,474
52,641
(2,411)
(976)
101,063
51,665
Net finance income / (costs) (excluding
interest)
1,195
266
1,197
1,982
2,392
2,248
(915)
1,692
1,477
3,940
Other non-operating expenses
(2,598)
-
(4,875)
(863)
(7,473)
(863)
(262)
-
(7,735)
(863)
Earnings before interest, tax,
depreciation and amortisation
33,926
24,965
64,467
29,061
98,393
54,026
(3,588)
716
94,805
54,742
Interest revenue
267
257
817
326
1,084
583
21
112
1,105
695
Interest expense
(1,303)
(1,120)
(5,217)
(4,663)
(6,520)
(5,783)
(30)
(57)
(6,550)
(5,840)
Depreciation and amortisation
(7,461)
(5,539)
-
-
(7,461)
(5,539)
(40)
(53)
(7,501)
(5,592)
Reportable segment profit / (loss)
before income tax
25,429
18,563
60,067
24,724
85,496
43,287
(3,637)
718
81,859
44,005
Income tax (expense) / benefit
(9,647)
(5,466)
(5,907)
(3,027)
(15,554)
(8,493)
-
-
(15,554)
(8,493)
Reportable segment profit / (loss) after
income tax
15,782
13,097
54,160
21,697
69,942
34,794
(3,637)
718
66,305
35,512
Segment assets
229,239
214,172
534,461
529,268
763,700
743,440
24,154
19,485
787,854
762,925
Segment liabilities
(39,731)
(34,434)
(82,673)
(306,086)
(122,404)
(340,520)
(2,236)
(867)
(124,640)
(341,387)
Net assets
189,508
179,738
451,788
223,182
641,296
402,920
21,918
18,618
663,214
421,538
Navigator Global Investments Limited
2024 Annual Report
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2024
Page 49
2.
Revenue
a) Revenue from contracts with customers
Consolidated USD’000
2024
2023
Operating revenue
Management fees from hedge fund clients
34,110
27,380
Management fees from commingled funds
19,698
21,255
Management fees from customised solutions clients
20,871
19,150
Management fees from managed account services clients
9,554
8,889
Performance fees
11,945
6,862
Total operating revenue
96,178
83,536
Other revenue
Revenue from reimbursement of fund costs
172,675
96,620
Revenue from provision of office space and services
7,431
4,741
Total other revenue
180,106
101,361
Total revenue from contracts with customers
276,284
184,897
Management fees
Management fees are received from customers for providing:
investment management / advice and related services to
commingled funds;
investment management / advice to customised solutions
clients; and
managed account services to clients.
Management fee revenue is based on a percentage of the
customer’s portfolio value and is calculated in accordance with the
applicable document or agreement which creates the contractual
relationship with the customer. The management fee is a single
fee which covers all of the individual components which make up
the management service. Management fee revenue is variable in
nature as it is based on a percentage of the customer’s portfolio
value.
The Group’s obligation to provide management services to
customers is satisfied as and when the customer receives and
consumes the services on a continuous basis. The Group
recognises revenue for the services performed at the end of each
month.
Performance fees
Performance fees may be earned on certain fund share classes
and client accounts, other than for managed account services
clients.
The amount of the performance fee is calculated in accordance
with the terms of the applicable contract with the customer. The
entitlement to performance fees for any given performance period
is dependent on the customer’s portfolio achieving a positive
performance, and in some cases in outperforming an agreed
hurdle. Performance fees are generally also subject to a high-
water mark arrangement which ensures that fees are not earned
more than once on the same performance.
The Group satisfies its obligations to provide services in exchange
for the performance fee revenue on a continuous basis, however
the right to receive the revenue is constrained by achieving the
required performance hurdles and/or high-water mark. As such,
performance fee revenue is only recognised to the extent that it is
probable that a significant reversal of the revenue will not occur.
Due to the uncertainty associated with the estimate of performance
fees prior to the end of the performance period, this revenue is not
recognised in the income statement until the entitlement to receive
the fee becomes certain, which is at the end of the relevant
performance period. At all times prior to this, there is a high
probability of any revenue recognised being reversed.
Performance periods for performance fee arrangements range
from between 1 month to 1 year.
Navigator Global Investments Limited
2024 Annual Report
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2024
Page 50
2.
Revenue (continued)
Revenue from reimbursement of fund costs
The Group is entitled to reimbursement for fund expenditure that it
has paid on behalf of the funds which includes operating
expenses, capital expenditure and regulatory charges. While the
funds generally pay their own operating expenses directly, there
are some expenses, such as financial data services, software
development and technology expenses, where it is more practical
for the Group to incur and pay the costs and then be reimbursed
by the funds.
The Group enters into contracts for the relevant good or service
directly with the third-party service providers, and hence the Group
controls the good or service until it subsequently directs the good
or service to be transferred to the fund.
As the Group controls the good or service before it is transferred,
the Group is not acting in a capacity as agent for the fund. The
Group is required to recognise both:
the expense incurred under the contract with the third-party
service providers (see note 4) to receive the good or service;
and
the revenue to which it expects to be entitled from the fund in
exchange for transferring the good or service.
The revenue and expense in relation to these reimbursed costs
off-set to the extent amounts relate to operating expenditure as
opposed to capital expenditure. The Group does not add a margin
to the original cost of the good or service transferred to the fund.
Revenue from the provision of office space and
services
The Group has a number of agreements with external parties to
license office space at its New York and London offices. As part of
these agreements, licensees are charged license fees and service
charges on a monthly basis.
The Group’s obligation to provide office space services and its
obligation to provide business services to licensees are satisfied
as and when the customer receives and consumes the services on
a continuous basis. The Group recognises revenue as the amount
to which it has a right to invoice for the period.
The Group is entitled to:
a license fee and an occupancy-related service charge as per
the terms of the applicable contract with each licensee as it
satisfies its obligations to provide office space and related
services; and
a service charge as per the terms of the applicable contract
with each licensee as it satisfies its obligations to provide
business services.
Major revenue source
7% (2023: 8%) of the Group’s operating revenue relates to
management fees and performance fees earned on the Lighthouse
Diversified commingled funds.
11% (2023: 12%) of the Group’s operating revenue relates to
management fees and performance fees earned on the Lighthouse
Global Long/Short commingled funds.
39% (2023: 38%) of the Groups operating revenue relates to
management fees and performance fees earned on the North
Rock funds.
The Group’s largest individual client represents 11% of operating
revenue (2023: 12%).
The Group’s three largest individual clients combined represent
24% of operating revenue (2023: 26%).
Geographic information
The company is domiciled in Australia where $0.2 million (2023:
$0.2 million) of operating revenue from contracts with customers is
earned with the remaining $95.9 million (2023: $83.5 million)
operating revenue derived from contracts with customers in foreign
countries. Those countries with significant revenue generation
include the United States of America $31.6 million, Cayman
Islands $56.3 million and United Kingdom $6.8 million.
Navigator Global Investments Limited
2024 Annual Report
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2024
Page 51
2.
Revenue (continued)
b) Other income
Consolidated USD’000
2024
2023
Distribution income
72,962
66,860
Share of profits to non-controlling interest holders
-
(35,045)
Net investment income
72,962
31,815
Distribution income
Distributions are received from investments the Group holds in
unquoted securities in externally managed entities. Income is
recognised on the date that the Group’s right to receive payment is
established which is primarily upon receipt.
Share of profits to non-controlling interests
The early settlement of the redemption liability on 3 January 2024,
resulted in the extinguishment of non-controlling interests
associated with the Strategic Portfolio. As a result the Group is
entitled to all profits associated with the Strategic Portfolio from the
current financial year onwards. Previously the non-controlling
interest holders were entitled to a share of profits above a
minimum level of distributions received from the six investments
within the portfolio.
3.
Expenses
Consolidated USD’000
2024
2023
a) Employee expenses
Employee costs and benefits
(61,733)
(54,028)
Share based payments
(1,075)
(839)
Termination payments (non-operating)
(2,181)
(765)
Total employee expenses
(64,989)
(55,633)
b) Administration and other general expenses
Operating expenses
Professional and consulting expenses
(4,178)
(3,674)
Information and technology expense
(2,770)
(2,830)
Reimbursable fund costs
(167,770)
(94,540)
Occupancy expense
(3,245)
(2,107)
Distribution expense
(3,416)
(2,487)
Insurance
(686)
(654)
Travel expense
(1,335)
(1,118)
Other expenses
(2,786)
(2,642)
Total operating expenses
(186,186)
(110,052)
Non-operating expenses
Transaction costs associated with acquisitions, restructuring & debt refinancing
(5,554)
(863)
Total administration and general expenses
(191,740)
(110,915)
Navigator Global Investments Limited
2024 Annual Report
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2024
Page 52
3.
Expenses (continued)
Consolidated USD’000
2024
2023
c) Depreciation and amortisation expense
Depreciation of plant and equipment
(3,649)
(2,491)
Lease depreciation
(3,626)
(3,006)
Amortisation of intangible assets
(226)
(95)
Total depreciation and amortisation expense
(7,501)
(5,592)
Total expenses
(264,230)
(172,140)
Employee expense
The largest operating expense is employee expense which
includes salaries and wages, together with the cost of other
benefits provided to employees such as contributions to
superannuation and retirement plans, health care benefits,
educational assistance and cash bonuses. It also includes
associated payroll costs such as payroll tax and payroll processing
fees.
A defined contribution plan is a post-employment benefit plan
under which the Group pays fixed contributions to a separate entity
and will have no legal or constructive obligation to pay further
amounts. Obligations for contributions to defined contribution
plans are recognised as an employee benefit expense in profit and
loss in the periods during which services are rendered by
employees.
Share based payment expense
The Group provides benefits to small select group of senior
management in the form of share based payment awards as part
of their remuneration. Employees render services in exchange for
shares or rights over shares (‘equity settled transactions’). During
the period 1,305,820 (2023: 3,287,460) performance rights were
issued under the Group’s Employee Performance Rights Plan and
241,952 rights were cancelled with payment made in lieu (2023: nil
cancelled).
For each employee, a portion of the rights are subject to non-
market vesting conditions to achieve target earnings hurdles and
the remaining portion are subject to market vesting conditions.
The cumulative expense recognised for share based payments
transactions at each reporting date until vesting date reflects:
the grant date fair value of the award;
the extent to which the vesting period has expired;
the current best estimate of the number of awards that will
vest; and
incremental value provided to the employee for modifying
existing rights or providing replacement entitlements upon
cancellation.
Reimbursable fund costs
The Group is entitled to reimbursement for fund expenses that it
has paid on behalf of the funds. While the funds generally pay
their own operating expenses directly, there are some expenses,
such as financial data services, software and technology
expenses, where it is more practical for the Group to incur and pay
the expense and then be reimbursed by the funds.
Since January 2021 new cost sharing arrangements were
negotiated with funds whereby additional operating expenses such
as employee costs including salaries, wages and cash bonuses
are passed through for reimbursement.
Occupancy expense
Occupancy expense includes rent for leased premises or
equipment where the short-term lease exemption and low value
exemptions have been applied under AASB 16 Leases.
Expenditure also includes common area maintenance costs
outgoings.
Navigator Global Investments Limited
2024 Annual Report
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2024
Page 53
4.
Finance income and costs
a) Recognised directly in profit and loss
Consolidated USD’000
2024
2023
Finance income
Unrealised fair value changes in financial assets
23,006
36,014
Realised gain on financial assets
254
213
Interest income on bank deposits
904
463
Finance income on net investment in finance lease
201
232
Total finance income
24,365
36,922
Finance costs
Fair value changes in financial liabilities
(19,556)
(31,634)
Lease interest expense
(1,292)
(1,113)
Net foreign exchange loss
(1,205)
(171)
Bank charges
(1,022)
(482)
Interest on borrowings
(1,694)
(1,137)
Unwinding of discount on financial liabilities & provisions
(3,564)
(3,590)
Total finance costs
(28,333)
(38,127)
Net finance (loss) / income recognised in profit and loss
(3,968)
(1,205)
b) Recognised directly in comprehensive income
Consolidated USD’000
2024
2023
Foreign currency translation differences
15
(325)
Unrealised fair value changes in financial assets
3,001
(18,761)
Income tax recognised directly in equity
4,292
(225)
Total finance gain/(loss)
7,308
(19,311)
Recognised in:
Fair value reserve
7,293
(18,986)
Translation reserve
15
(325)
Fair value movements through profit and loss
Financial assets (Note 11) and financial liabilities (Note 18 (a) at
fair value through profit and loss are remeasured at each reporting
date. Fair value movements (unrealised) are reported in the profit
and loss as either finance income or finance costs depending on
whether the fair value increment or decrement for the reporting
period.
Fair value changes in financial liabilities reflects the write up of the
redemption liability prior to its settlement as part of the transaction
completed on 3 January 2024 (Note 9).
Fair value movements through comprehensive
income
Financial assets at fair value through other comprehensive income
are carried in the statement of financial position at fair value, with
changes in fair value reported in other comprehensive income and
presented in the fair value reserve in equity (refer Note 11).
Upon sale or derecognition of these investments, any gain or loss
will be transferred to retained earnings.
Navigator Global Investments Limited
2024 Annual Report
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2024
Page 54
5.
Cash
a) Cash and cash equivalents
Consolidated USD’000
2024
2023
Cash at bank
61,622
67,818
At balance date, AUD cash accounts earn interest between
4.1%-4.83% (2023: 3.9%); USD cash accounts earn
between 0%-4.50% (2023: 0-4.39%).
The carrying amount of these assets is a reasonable
approximation of fair value. The Group’s exposure to
interest rate and foreign currency risk on cash is disclosed
in Note 21.
b) Reconciliation of cash flows from operating activities
Consolidated USD’000
2024
2023
Cash flows from operating activities
Profit for the period
66,305
35,512
Adjustments for:
Income tax expense, less income tax paid
12,519
6,047
Depreciation of plant and equipment
3,649
2,491
Lease depreciation
3,626
3,006
Amortisation of intangible assets
226
95
Fair value changes in financial assets
(23,260)
(36,227)
Fair value changes in financial liabilities
19,556
31,634
Non-cash lease (income)/expense & modification gains, net
179
85
Interest expense & borrowing cost amortisation (non-cash)
3,931
3,847
Share based payments
850
839
Share of (profit)/loss joint ventures and associates
(811)
(638)
Net foreign exchange (gain) / loss
1,205
172
Transaction costs associated with acquisitions & redemption liability
settlement
4,562
-
Transaction costs associated with borrowings
290
-
Operating cash flow before changes in working capital and provisions
92,827
46,863
(Increase) / decrease in receivables
(7,016)
(1,857)
(Increase) / decrease in other current assets
(1,056)
(599)
Increase / (decrease) in payables
(32,162)
(5,836)
Increase / (decrease) in employee benefits
5,397
(715)
Net cash from operating activities
57,990
37,856
Navigator Global Investments Limited
2024 Annual Report
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2024
Page 55
6.
Income tax
The Group operates in various tax jurisdictions around the world including Australia, United States of America, and to a smaller extent United
Kingdom, Hong Kong, Singapore, UAE and Ireland. The Group has an Australian tax consolidated group and three separate US tax
consolidated groups; one for the Lighthouse segment and two within the NGI Strategic segment. Several entities within the NGI Strategic
segment are incorporated in the Cayman Islands including the partnership entities which receive distribution income from portfolio investments
acquired in the current year. Further information about the tax residency of subsidiaries within the Group are outlined in the Consolidated entity
disclosure statement.
Income tax expense comprises current and deferred tax and is recognised in profit and loss, except to the extent that it relates to items
recognised directly in equity or in other comprehensive income.
Pillar Two legislation has been enacted or substantially enacted in certain jurisdictions in which the Group operates. However, this legislation
does not apply to the Group as its consolidated revenue is lower than €750m.
a) Reconciliation of effective tax rate
Consolidated USD’000
2024
2023
Profit before income tax
81,859
44,005
Income tax using the Company’s domestic tax rate of 30% (2023: 30%)
(24,558)
(13,202)
Effect of tax rates in foreign jurisdictions
4,536
(33)
Non-deductible / non-assessable amounts included in accounting profit
8,001
8,561
Amounts not included in accounting profit
(3,346)
(1,038)
Tax losses / (generated) for which no deferred tax asset is initially recognised
(1,871)
(39)
Changes in estimates relating to prior years
1,684
(2,742)
Total income tax expense reported in profit and loss
(15,554)
(8,493)
b) Current tax assets and liabilities
Consolidated USD’000
2024
2023
Current tax assets
2,466
93
Current tax liabilities
(1,909)
(1,487)
Tax receivables & payables
Current tax assets and liabilities represent the amount of income
taxes receivable or payable to the relevant tax authority, using
rates current at reporting date. Income taxes payable are after the
effects of applying any carried forward losses available and
instalments paid during the period.
Current tax assets and liabilities are offset if there is a legally
enforceable right to offset, and they relate to income taxes levied
by the same tax authority on a tax consolidated group of entities.
Navigator Global Investments Limited
2024 Annual Report
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2024
Page 56
6.
Income tax (continued)
c) Deferred tax
Consolidated USD’000
2024
2023
Carried forward tax losses
31,478
37,271
Goodwill and intangible assets
(8,321)
(11,569)
Property, plant and equipment
(81)
376
Employee benefits
(3)
921
Financial assets at fair value through profit and loss
(6,244)
(1,637)
Investment in joint ventures and associates
(657)
(334)
Financial assets at fair value through other comprehensive income
2,519
425
Foreign tax credits
-
856
Other items
(219)
2,344
Net deferred tax assets
18,472
28,653
Reflected in the statement of financial position as follows:
Deferred tax assets
20,704
28,653
Deferred tax liabilities
(2,232)
-
Net deferred tax
18,472
28,653
Deferred tax balances
Deferred tax is recognised in respect of temporary differences
between the carrying amounts of assets and liabilities for financial
reporting purposes and the amounts used for taxation purposes.
Deferred tax is not recognised for temporary differences related to
investments in wholly-owned subsidiaries to the extent that it is
probable that they will not reverse in the foreseeable future.
Deferred tax is measured at the tax rates that are expected to be
applied to temporary differences when they reverse, based on the
laws that have been enacted or substantively enacted by reporting
date.
Deferred tax assets and liabilities are offset if there is a legally
enforceable right to offset, and they relate to income taxes levied
by the same tax authority on a tax consolidated group of entities.
Uncertain tax positions
In determining the amount of current and deferred tax, the Group
takes into account the impact of uncertain tax positions and
whether additional taxes and interest may be due. This
assessment relies on estimates and assumptions and may involve
interpretations of tax law and judgements about future events. New
information may become available that causes the Group to
change its judgement regarding the calculation of tax balances,
and such changes will impact the profit and loss in the period that
such a determination is made.
Recognition of deferred tax assets
Deferred tax assets are only recognised to the extent that it is
probable that future taxable profits will be available against which
the asset can be utilised. Deferred tax assets are reduced to the
extent that it is no longer probable that the related tax benefit will
be realised. The carrying value of both recognised and
unrecognised deferred tax assets are reassessed at each
reporting date.
Carried forward losses are available to the Lighthouse tax
consolidated group and one of the Strategic tax consolidated
groups. At balance date it is considered more likely than not that
these losses and deductible temporary differences will be fully
recovered. This position is supported by the current profitability of
each tax group and/or the ability to apply against capital losses.
Carried forward tax losses relating to the US Group which existed
prior to 1 January 2018 have a life of 20 years and will expire
during the period from 2029 to 2038. Tax losses incurred after 1
January 2018 have an indefinite life.
Navigator Global Investments Limited
2024 Annual Report
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2024
Page 57
6.
Income tax (continued)
c) Deferred tax (continued)
Deferred tax assets - unrecognised
Deferred tax assets have not been recognised in respect of the following items:
Consolidated USD’000
2024
2023
Deductible temporary differences
77,840
77,844
Unrealised capital losses
-
4,879
Tax losses
2,488
2,679
Foreign tax credits
2,382
Total deferred tax assets - unrecognised
82,710
85,402
Unrecognised deferred tax assets relating to the Australian tax
consolidated Group of AUD$120.7 million equivalent (2023:
AUD$121.5 million) consist of carried forward operating tax losses
and deductible temporary differences primarily relating to financial
assets and impairment losses recognised in previous financial
years. Tax losses relating to the Australian Group and deductible
temporary differences do not expire under current tax legislation.
At balance date it is not probable that the Australian tax Group will
produce sufficient taxable profits and/or capital gains against which
these deferred tax assets can be utilised and therefore the
deferred tax assets are unrecognised.
7.
Dividends
The following dividends were paid by the Company during the period:
Consolidated USD’000
2024
2023
Final ordinary dividend for the year ended 30 June 2023 of US 3.0 cents
9,019
-
Final ordinary dividend for the year ended 30 June 2022 of US 3.0 cents
-
9,004
9,019
9,004
The Directors have determined a final unfranked dividend of US 3
cents per share (with 100% conduit foreign income credits). The
dividend will be paid on 27 September 2024.
The dividends were not determined or provided for as at 30 June
2024, and there are no income tax consequences.
Franking credits
Consolidated USD’000
2024
2023
Amount of franking credits available to shareholders of Navigator Global
Investments Limited for subsequent financial years
781
727
Dividends paid and declared during the 2024 financial year have
been unfranked. Franking credits are attached to dividends
received from the Group’s investment in Longreach Alternatives
Ltd. Franking credits available have been converted from
Australian dollars at each balance date.
Navigator Global Investments Limited
2024 Annual Report
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2024
Page 58
8.
Earnings per share
Consolidated USD
2024
2023
Restated1
Basic earnings per share
16.62
14.38
Diluted earnings per share
14.94
11.22
Reconciliation of earnings used in calculating earnings per share
Basic and diluted earnings per share (EPS)
Consolidated USD’000
2024
2023
Profit attributable to ordinary equity holders of the Company
used in calculating basic and diluted EPS
66,305
35,512
Weighted average number of shares used in calculating basic and diluted EPS
’000 shares
2024
2023
Restated1
Weighted average number of ordinary shares used in calculating
basic EPS (i)
398,994
246,947
Adjustment for calculation of diluted EPS relating to Convertible
notes & share based payments (ii)
44,806
69,581
Weighted average number of ordinary shares used in calculating
diluted EPS
443,800
316,528
(i) The weighted average number of shares takes into account the
weighted average effect of shares issued from the share
placement on 3 January 2024 (refer note 9 & 20). Shares
associated with convertible notes became mandatorily convertible
when modified on 3 January 2024 and are also included. In the
prior year, the weighted average number of shares takes into
account the weighted average effect of shares issued upon
conversion of notes in June 2023.
(ii) Diluted earnings per share includes contingently issuable
shares associated with equity settled share based payments which
are expected to vest had the contingent period ended at balance
date.
There have been no other transactions involving ordinary shares
or potential ordinary shares between the reporting date and the
date of authorisation of these financial statements.
1 2023 basic and diluted earnings per share have been recalculated in accordance with the standard and not due to error. This is as a result of
the rights issue in the current period, refer to Note 20 for further details.
Navigator Global Investments Limited
2024 Annual Report
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2024
Page 59
9.
Acquisitions
Current year transaction
NGI Strategic Portfolio – accelerated settlement of the redemption liability
On 3 January 2024, the Group completed the final stage of its February 2021 transaction relating to the six minority interest investments within
the NGI Strategic Portfolio. The Group accelerated the settlement of the redemption liability with certain affiliates of GP Strategic Capital
(formerly known as Dyal Capital)(“GP Strategic Affiliates”), a platform of Blue Owl (NYSE: OWL) regarding the accelerated acquisition of
incremental profit distributions for total agreed consideration of $200 million, to be satisfied through the issue of shares and a cash payment.
The arrangement was otherwise due to settle in 2026 based on an earnings multiple applied to the Strategic Portfolio’s average relevant gross
earnings for calendar years 2021 to 2025 up to a maximum of $200 million, and a financial liability was carried on the Group’s balance sheet at
fair value prior to extinguishment. The completion of this transaction entitles the Group to the GP Strategic Affiliates’ share of profit distributions
from the NGI Strategic Portfolio with effect from 1 July 2023 and hence all distributions received in the current financial year are retained by the
Group.
The following table summarises consideration paid & payable for the investment together with the fair value of the modified redemption liability
prior to extinguishment:
Contract
value
Fair Value
USD’000
USD’000
Share placement (129,712,902 shares)
120,000
99,067
Share allotment through Rights Issue and Noteholder Offer (48,099,151 shares at
A$1.00/share)
32,015
32,015
Cash consideration1
47,985
47,985
Total consideration
200,000
179,067
1Approximately 93% of cash consideration paid was raised through an Entitlement Offer to non-GP Affiliate shareholders.
The fair value of the Share placement is determined with reference to the USD equivalent share price on 5 December 2023, the date on which
all conditions of the contract were satisfied and the redemption liability was modified.
The redemption liability recorded as a non-current financial liability (Note 18(a) in the prior year has been extinguished with the change in fair
value of $19.6 million for the period recorded as a finance cost (Note 4(a). Transaction costs of $4.6 million were expensed (non-operating) and
$2.5 million were capitalised in equity to the extent they related to the issue of share capital in the Company.
Navigator Global Investments Limited
2024 Annual Report
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2024
Page 60
9.
Acquisitions (continued)
Prior year transaction
Investment in Invictus Capital Partners
On 4 August 2022, the Group acquired passive investment interests in US based Invictus Capital Partners, LP and four affiliate entities
(collectively ‘Invictus Capital’). Invictus Capital operates in a real estate credit focused alternative asset manager of private funds and separately
managed accounts. They seek attractive risk-adjusted returns by sourcing undervalued high-quality mortgage loans and financing them
efficiently through credit facilities and the securitisation market. The acquisition expands the Group’s investments in the broad residential real
estate sector. The Group acquired equity rights of 18.18% across various Invictus Capital entities and is entitled to 9.09% of carried interest
proceeds for total consideration of $100 million. Up front consideration of $15 million has been paid during the period with the remaining $85
million expected to be payable in cash over a three year period. Deferred consideration comprises of primary and secondary elements, with
primary expected to be paid on anniversary dates but can be accelerated upon certain terms being met, while the timing of the secondary
consideration is dependent upon Invictus Capital’s mortgage business to achieve a required earnings target or on the third anniversary date at
the latest.
The Group has traditional protective rights over the investment held and has no representation on the board of directors, or ability to significantly
influence operations, it has been determined the acquisition is of an investment in a financial asset which will be recorded at fair value through
comprehensive income. Refer to Note 13 for further details on fair value measurement. The following table summarises consideration paid &
payable for the investment:
Total
Consideration
Final
Fair Value
USD $’000
At completion (cash):
15,000
15,000
Deferred (cash):
85,000
76,324
Total consideration
100,000
91,324
Capitalised transaction costs
1,970
Initial carrying amount
$93,294
Fair value of the investment in Invictus Capital at acquisition is $91.3 million. The differential to total consideration paid and payable of $8.7
million is a result of discounting deferred components not callable for 12 months, to present value. Deferred consideration is not contingent upon
future events or earnings and as such is not treated as contingent consideration and is remeasured at each balance date. The balance is
however classified as current as it is not within the Group’s control to defer payment beyond twelve months. Transaction costs of $2 million are
capitalised to the investment when fair valued through other comprehensive income.
Navigator Global Investments Limited
2024 Annual Report
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2024
Page 61
Operating assets and liabilities
This section provides information on the operating assets and liabilities of the Group, including explanations of key assets
used to generate operating results and the corresponding liabilities. Where a material accounting policy or key estimate is
specific to a single note, the policy or estimate is described in the note to which it relates.
10.
Trade receivables and other assets
Consolidated USD’000
Note
2024
2023
Current
Trade receivables from contracts with customers
24,689
17,728
Prepayments
3,504
2,314
Other receivables
1,052
1,212
Finance lease receivable
14(b)
567
508
Other financial assets
3,060
2,620
32,872
24,382
Non-current
Guarantees and deposits
3,140
2,978
Finance lease receivable
14(b)
2,383
2,950
5,523
5,928
Trade receivables from contracts with customers
Trade receivables due from contracts with customers comprise
management service fees, performance fees, recoverable costs,
licence fees, outgoings and other operating expenses on-charged
under agreements with external parties to licence office space.
Related party receivables at balance date are negligible.
Trade receivables are non-interest bearing and are generally on 30
to 90 day terms. Trade receivables are initially recognised at
transaction price, being the amount to which the Group has the
right to invoice for the period for the services or recoverable costs
provided.
Due to the short-term nature of the Group’s trade receivables and
the historically low default rate on payment by customers, there is
no credit allowance against trade receivables as at 30 June 2024
or 30 June 2023. In determining this credit allowance, the Group
has considered forward looking factors specific to the receivables
and the economic environment and determined that any allowance
would be insignificant.
Other receivables and prepayments
Other receivables and prepayments relate to items such as
prepaid expenses (principally in relation to software licences and
insurance policies), short-term deposits, interest receivable on
cash deposits, pending redemptions from investments in Group
managed products, and the current portion of finance leases
receivable. Further details are provided for finance lease
receivables at Note 14(b).
Other financial asset
The Group is entitled to an additional 2.67% ownership in GROW
Investment Group for no further consideration (refer Note 12). The
Group became entitled to additional ownership rights upon
realisation of a contingent asset, as the investment had not met
earnings target by the agreed timeframe. The fair value of this
additional investment has been measured based on the most
recent market transaction with new shareholders in January 2024.
As at balance date, the additional shares have not yet been issued
to the Group. Upon issuance the fair value established at that date
will be transferred to Investments at fair value, a non-current asset
on the Group’s balance sheet.
The carrying amount of these assets is a reasonable
approximation of fair value. The Group’s exposure to credit risk,
currency risk and impairment losses related to trade and other
receivables is disclosed in Note 21.
Navigator Global Investments Limited
2024 Annual Report
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2024
Page 62
11.
Investments at fair value
Consolidated USD’000
2024
2023
Financial assets at fair value through other comprehensive income
Investments in unquoted securities of externally managed entities
162,000
159,000
Financial assets at fair value through profit and loss
Investments in unquoted securities of externally managed entities
344,243
323,132
Investments in unquoted securities of Group managed entities
16,842
13,786
523,085
495,918
Financial assets at fair value through other
comprehensive income
Financial assets at fair value through other comprehensive income
comprise non-controlling equity holdings in unquoted securities of
US based entities over which the Group does not have significant
influence.
The Group has elected to account for these investments at fair
value with changes to fair value recognised through other
comprehensive income in the fair value reserve. Upon sale or
derecognition of these investments, any gain or loss will be
transferred to retained earnings.
Financial assets at fair value through profit and
loss
These assets have been classified as fair value through profit and
loss upon initial recognition with changes in fair value recognised
in profit and loss. These investments comprise of:
Investments in unquoted securities of Group managed
entities; and
Investments in unquoted securities of externally
managed entities which comprise of the six investments
in the NGI Strategic Portfolio. The Group elected fair
value through profit and loss to better align with the fair
value movements expected in the corresponding
redemption payment liability to acquire non-controlling
interests in the acquired partnerships (see Note 18(a).
Note 21 provides details on the methods used to determine fair
value for measurement and disclosure purposes.
Navigator Global Investments Limited
2024 Annual Report
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2024
Page 63
12.
Investment in joint ventures and associates
a) Interest in joint venture
Consolidated USD’000
2024
2023
Opening balance
10,405
9,840
Share of profit from joint venture net of intangibles amortisation
1,207
1,017
Dividends received
(147)
(127)
Foreign exchange translation difference
15
(325)
Balance at 30 June
11,480
10,405
b) Interest in associates
Consolidated USD’000
2024
2023
Opening balance
3,492
3,658
Gain on deemed disposal
252
213
Share of loss from associate
(396)
(379)
Balance at 30 June
3,348
3,492
Joint arrangements
The Group has a 34.06% (2023: 34.06%) interest in Longreach
Alternatives Ltd (’Longreach’), a joint venture in an Australian
based diversified asset management firm. Longreach investments
are across market segments in Australian and the US including
alternative income, private credit, quantitative equity and real
assets.
The Group jointly controls Longreach with another major
shareholder, both are responsible for the overall direction and
supervision of Longreach. The Shareholders Agreement is
contractually structured so that both major shareholders are
responsible for the overall direction and supervision of Longreach.
Decisions over relevant activities require both major shareholders
to agree. Investments in joint ventures are accounted for using the
equity method.
Embedded within the investment value are separately identifiable
intangibles for management rights over investment mandates.
These rights have a carrying value of $0.32 million (2023: $0.4
million) and are amortised over their eight year life reducing the
share of profits recognised in the Group’s profit and loss.
The parent entity receives a small service fee from Longreach for
providing financial and accounting support to maintain the books
and records of the consolidated group. During the period,
Longreach and Lighthouse commenced a joint initiative to
distribute products for mutual benefit. Under a services agreement,
Longreach can recover certain employee and operating expenses
associated with the arrangement totalling $0.3 million for the
period. There are no other fees received, purchases made or
commitments to the joint venture entity as at balance date.
Longreach is expected to pay dividends in relation to its profits
subject to ensuring ongoing compliance with the financial
requirements under its Australian Financial Services License.
Associates
Associates are entities over which the Group has significant
influence but not control or joint control. This is generally the case
where the Group holds between 20% and 50% of the voting rights.
Significant influence may exist for shareholdings less than 20% if
through voting power, significant influence can be demonstrated.
Investments in associates are accounted for using the equity
method.
The Group has significant influence over GROW Investment Group
(‘GROW‘) who seeks to capitalise on opportunities in the Chinese
asset management industry and the continued evolution of China’s
markets. The Group holds a 5.4% (2023: 5.84%) shareholding in
GROW and 20% (2023: 20%) representation on the board of
directors. The board is ultimately responsible for the key operating
and financial decisions of the company to which the Group has
influence over. Prior to balance date the Group became entitled to
a further 2.67% shareholding as GROW had not met earnings
targets set at the time the initial investment was made. The
incremental ownership does not attract additional rights or board
representation and share of earnings will be effective from the date
additional shares are issued. As such incremental ownership does
not change the Group’s assessment of having significant influence
over GROW and the investment in associate classification will
continue.
No embedded intangibles other than goodwill were established at
the time of acquisition as GROW were in a start-up phase. The
GROW Investment group has a calendar year end and therefore
the Group utilises management accounts to equity account for this
investment. There are no fees received, purchases made or
commitments to the associate entity. There are no restrictions on
the ability for GROW to pay dividends from distributable profits.
None of the Group’s joint ventures or associates are listed on any
public exchange.
Navigator Global Investments Limited
2024 Annual Report
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2024
Page 64
13.
Plant and equipment
Consolidated US$’000
Furniture &
equipment
Computer
equipment &
software
Leasehold
improvements
Total
Cost
Balance at 1 July 2022
2,912
9,913
4,958
17,783
Additions
1,829
2,538
1,565
5,931
Disposals
-
-
-
-
Balance at 30 June and 1 July 2023
4,741
12,451
6,523
23,715
Additions
387
3,500
435
4,323
Transfers
(940)
58
882
-
Balance at 30 June 2024
4,188
16,009
7,840
28,037
Depreciation
Balance at 1 July 2022
(1,664)
(7,326)
(2,072)
(11,062)
Depreciation for the year
(215)
(1,675)
(601)
(2,491)
Disposals
-
-
-
-
Balance at 30 June and 1 July 2023
(1,879)
(9,001)
(2,673)
(13,553)
Depreciation for the year
(311)
(2,388)
(950)
(3,649)
Disposals
-
-
-
-
Balance at 30 June 2024
(2,190)
(11,389)
(3,623)
(17,202)
Carrying amounts
At 1 July 2022
1,248
2,587
2,886
6,721
At 30 June and 1 July 2023
2,862
3,450
3,850
10,162
As at 30 June 2024
1,998
4,620
4,217
10,835
Depreciation
Depreciation is recognised in the profit and loss on a straight-line
basis over the estimated useful life of the asset as follows:
Leasehold improvements:
Lease term
Computer software and equipment: 2-3 years
Furniture and equipment:
5-20 years
The residual value, the useful life and the depreciation method
applied to an asset are reassessed at least annually. The carrying
value of plant and equipment is reviewed for impairment when
events or changes in circumstances indicate the carrying value
may not be recoverable.
Navigator Global Investments Limited
2024 Annual Report
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2024
Page 65
14.
Leases
a) Group as lessee
Amounts recognised in the balance sheet
Right-of-use assets
Consolidated US$’000
Office premises
Total
Balance at 1 July 2022
18,101
18,101
Additions
5,188
5,188
Modification adjustment
(518)
(518)
Depreciation for the period
(3,005)
(3,005)
Balance at 30 June 2023
19,766
19,766
Additions
-
-
Modification adjustment
1,314
1,314
Depreciation for the period
(3,626)
(3,626)
Balance at 30 June 2024
17,454
17,454
Lease liabilities
Consolidated US$’000
Balance
at
30 June
2023
Cash
flows
Foreign
exchange
Modification
adjustment
Other
Transfer
to
current
Balance
at
30 June
2024
Lease liabilities - current
3,595
(3,917)
-
-
387
3,576
3,641
Lease liabilities – non-current
23,127
-
44
1,105
-
(3,576)
20,700
26,722
(3,917)
44
1,105
387
-
24,341
The Group discounts lease payments using each leases
incremental borrowing rate and are determined for each lease
based on its maturity profile.
Lease payments have been discounted using incremental
borrowing rates of 3.00% to 7.59% (2023: 3.00% to 6.8%).
The Group classifies interest paid as cash flows from operating
activities.
The lease for Lighthouse’s New York office location was modified
during the period to occupy additional space for the remainder of
the lease term. The right of use asset and lease liability were
increased by $1 million as a result.
An option was exercised to extend the lease term for the Group’s
corporate head office in Brisbane for a further five years. The right
of use asset and lease liability were increased by $0.1 million as a
result. Other minor modifications were recorded for the Hong Kong
office to remeasure lease obligations.
Amounts recognised in the statement of profit and loss
Consolidated US$’000
2024
2023
Lease interest expense (included in finance costs)
1,292
1,113
Expense relating to short-term leases (included in occupancy expense)
737
325
Expense relating to variable lease payments not included in the measurement of
lease liabilities
1,100
1,505
Income from subleasing right-of-use assets (included in finance income)
201
232
Total cash outflow for leases in 2024 was $4.3 million (2023: $3.8million).
Navigator Global Investments Limited
2024 Annual Report
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2024
Page 66
14. Leases (continued)
a) Group as lessee (continued)
Contractual cash flows
Consolidated US$’000
2024
Total
2023
Total
6 months
or less
6-12
months
1-2 years
2-5 years
More
than 5
years
30 June 2023 Lease liabilities –
undiscounted
-
31,873
2,277
2,554
4,594
14,437
8,011
30 June 2024 Lease liabilities –
undiscounted
28,775
-
2,645
2,261
5,222
13,644
5,003
Future finance charges
(4,434)
(5,151)
Lease liabilities in the statement
of financial position
24,341
26,722
Current
3,641
3,595
Non-current
20,700
23,127
Lessee accounting policies
At inception of a contract, the Group assesses whether a contract
is, or contains, a lease. A contract is, or contains, a lease if the
contract conveys the right to control the use of an identified asset
for a period of time in exchange for consideration.
The Group has elected not to recognise right-of-use assets and
lease liabilities for short-term leases of office premises that have a
lease term of 12 months or less, and leases of low-value assets
comprising certain equipment. The Group recognises the lease
payments associated with these leases as an expense on a
straight-line basis over the lease term.
Contracts may contain both lease and non-lease components. The
Group allocates the consideration in the contract to the lease and
non-lease components based on their relative stand-alone prices.
The lease liability is initially measured at the present value of the
remaining lease payments, discounted using the Group’s
incremental borrowing rate.
Lease liabilities include the net present value of fixed payments
(including in-substance fixed payments) less any lease incentives
receivable, variable lease payments (linked to an index or a rate),
and any expected residual value guarantee payments.
Lease payments to be made under reasonably certain extension
options are also included in the measurement of the liability.
Possible future cash outflows amounting to $17.0 million (2023:
$16.1 million) were not included in the lease liability because it is
not reasonably certain that the leases will be extended. The
majority of leases with extension options have original lease terms
ending in FY29 or later.
Navigator Global Investments Limited
2024 Annual Report
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2024
Page 67
14.
Leases (continued)
b) Group as sublessor
Amounts recognised in the balance sheet
Consolidated US$’000
Note
2024
Total
2023
Total
6 months
or less
6-12
months
1-2 years
2-3 years
More
than 3
years
30 June 2023 Finance lease
receivable – undiscounted
-
4,085
350
359
734
761
1,881
30 June 2024 Finance lease
receivable – undiscounted
3,376
-
363
371
760
788
1,094
Unearned finance income
(426)
(627)
Finance lease receivable in the
statement of financial position
2,950
3,458
Current
567
508
Non-current
2,383
2,950
Amounts recognised in the statement of profit and loss
Consolidated US$’000
2024
2023
Finance income on net investment in the lease
201
232
Current period cash inflows for subleases was
$709 thousand (2023: $735 thousand).
The Group currently subleases one of its office premises and for
the whole of the remaining term of the head lease. These leases
are classified as a finance lease both the head lease and the
sublease are recorded separately.
At inception of each sublease, the Group determines whether it is
a finance lease or an operating lease. It assesses the lease
classification with reference to the right-of-use asset arising from
the head lease, not with reference to the underlying asset.
Allocation of lease and non-lease components are assessed by
the Group applying AASB 15 to allocate the consideration in the
contract.
Finance income is recognised over the term of the sublease based
on a pattern reflecting a constant rate of return on the lessor’s net
investment in the lease. For purposes of calculating finance
income on the sublease, the Group has used the incremental
borrowing rate on the head lease.
Navigator Global Investments Limited
2024 Annual Report
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2024
Page 68
15.
Intangible assets
Consolidated US$’000
Goodwill
Trademarks
Software
Client
relationships
Total
Cost
Balance at 1 July 2022
499,519
1,900
2,050
1,077
504,546
Work in progress – internally developed
-
-
2,080
-
2,080
Balance at 30 June and 1 July 2023
499,519
1,900
4,130
1,077
506,626
Additions
-
-
2,382
-
2,382
Balance at 30 June 2024
499,519
1,900
6,512
1,077
509,008
Amortisation and impairment losses
Balance at 1 July 2022
(405,718)
(1,378)
(2,050)
(1,077)
(410,223)
Amortisation for the year
-
(95)
-
-
(95)
Balance at 30 June and 1 July 2023
(405,718)
(1,473)
(2,050)
(1,077)
(410,318)
Amortisation for the year
-
(95)
(131)
-
(226)
Balance at 30 June 2024
(405,718)
(1,568)
(2,181)
(1,077)
(410,554)
Carrying amounts
At 1 July 2022
93,801
522
-
-
94,323
At 30 June and 1 July 2023
93,801
427
2,080
-
96,308
At 30 June 2024
93,801
332
4,331
-
98,464
Goodwill
Goodwill that arises upon the acquisition of subsidiaries is included
in intangible assets. The Group’s recorded goodwill balance
relates to the acquisition of the Lighthouses business in 2008.
Following initial recognition, goodwill is measured at cost less any
accumulated impairment losses.
Other intangible assets
Other intangible assets acquired or internally developed by the
Group, which have finite lives, are measured at cost less
accumulated amortisation and accumulated impairment losses.
Amortisation
Except for goodwill, intangible assets are amortised on a straight-
line basis in profit and loss over their estimated useful lives, from
the date that they are available for use. The estimated useful lives
for the current and comparative periods are as follows:
Trademarks
20 years
Capitalised software costs
5 years
Amortisation methods, useful lives and residual values are
reviewed at each reporting date and adjusted if appropriate.
Navigator Global Investments Limited
2024 Annual Report
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2024
Page 69
15.
Intangible assets (continued)
Impairment testing of intangible assets
The carrying amounts of the Group’s intangible assets which have
an indefinite life are reviewed at least annually, or when an
impairment indicator exists. An impairment loss is recognised if the
carrying amount of an asset or its related cash-generating unit
(CGU) exceeds its estimated recoverable amount.
The recoverable amount of an asset or CGU is the greater of its
value in use and its fair value less costs to sell. In assessing value
in use, the estimated future cash flows are discounted to their
present value using a discount rate that reflects current market
assessments of the time value of money and the risks specific to
the asset or CGU. For the purpose of impairment testing, assets
are grouped together into the smallest group of assets that
generates cash inflows from continuing use that are largely
independent of the cash inflows of other assets or CGU.
Impairment losses are recognised in profit and loss. An impairment
loss recognised in respect of a CGU is allocated first to reduce the
carrying amount of any goodwill allocated to the CGU and then to
reduce the carrying amount of the other assets in the CGU on a
pro-rata basis.
An impairment loss in respect of goodwill is not reversed. In
respect of other assets, an impairment loss is reversed only to the
extent that the asset's carrying amount does not exceed the
carrying amount that would have been determined, net of
depreciation and amortisation, if no impairment loss had been
recognised.
Cash Generating Units
The Group has two CGU’s which is unchanged from the prior year;
the US Lighthouse Group (US CGU) and NGI Strategic Group
(Strategic CGU). Corporate costs, assets and liabilities associated
with the Australian corporate business are allocated accordingly
between each CGU.
Impairment testing as at 30 June
Intangible assets subject to impairment testing, remain within the
US based funds management cash generating unit (US CGU). An
impairment assessment is not required for the NGI Strategic CGU
as no intangibles are associated and assets are measured at fair
value each balance date.
All of the Group’s intangibles are associated with the US CGU
totalling $98.5 million (2023: $96.3 million). The carrying value of
the US CGU tested at 30 June 2024 includes $10.8 million (2023:
$10.1 million) of directly attributable plant and equipment.
Impairment testing carried out on the US CGU as at 30 June 2024
and 30 June 2023 did not result in the recognition of any
impairment losses.
Recoverable amount
The recoverable amount of the CGU was determined based on a
value-in-use calculation where the cashflows of Lighthouse were
disaggregated between net fee related earnings and performance
fee earnings. Each component has distinctly different risk profiles
and accordingly different discount rates applied.
Five year cash flow projections comprise of the first three years
based on financial forecasts approved by the Board, which are
then extrapolated over an additional two years.
Revenue for the additional two years is extrapolated using an
independently sourced industry long term growth rate. Investment
management costs and operating expenses are extrapolated
based on ratios consistent with the third year of the approved
financial forecasts.
Key assumptions used in the calculation are discount rates and
terminal value growth rates:
Key assumption
2024
2023
Discount rate – Net fee related
earnings
14%
14%
Discount rate – Performance fee
earnings
21%
21%
Long term & terminal value growth
rate
3%
3%
The discount rate is a post-tax measure calculated based on US
risk factors as well as other risk factors specific to the industry and
operational nature of the business, including a market interest rate
of 5% (2023: 4.6%).
The terminal growth rate is based on the forecast long-term growth
rate for Open-End Investment Funds in the United States.
A reasonably possible change in these assumptions would not
result in an implied impairment of this CGU.
Navigator Global Investments Limited
2024 Annual Report
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2024
Page 70
16.
Trade and other payables
Consolidated USD’000
2024
2023
Current
Trade creditors
443
164
Distribution costs payable
924
723
Accruals
4,542
2,942
Profit share payable to non-controlling interest
-
34,923
Other payables
1,901
1,875
7,810
40,627
Non-current
Other long-term liabilities
365
350
365
350
Trade creditors, accruals & other payables
Trade creditors are non-interest bearing and normally settle on 30
to 90 day terms. The carrying amount of these liabilities is a
reasonable approximation of fair value. Current period accruals
includes non-operating accruals of $0.4 million (2023: $0.9 million).
Profit share to non-controlling interests
Following the transaction in January 2024 to extinguish the
redemption liability, the profit share arrangements with non-
controlling interests and related party Blue Owl (formerly Dyal
Capital Partners) is no longer applicable. Prior period amounts
relate to the Strategic Portfolio’s FY23 earnings which the Group
settled in cash within two months from balance date.
17.
Employee benefits
Consolidated US$’000
2024
2023
Current
Short-term incentives
8,065
2,724
Liability for annual leave entitlements
229
182
Liability for long service leave entitlements
118
105
8,412
3,011
Non-current
Liability for long service leave entitlements
18
9
Navigator Global Investments Limited
2024 Annual Report
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2024
Page 71
18.
Other financial liabilities
Consolidated USD’000
Note
2024
2023
Current
Deferred consideration payable
79,553
97,938
79,553
97,938
Non-current
Borrowings
-
9,581
Financial liabilities at amortised cost – Convertible notes
-
1,655
Financial liabilities at fair value – Redemption payment liability
18(a), 9
-
160,007
-
171,243
Deferred consideration
Consideration payable associated with business combinations and
investment acquisitions that are not contingent upon future events
is considered deferred consideration. This financial liability is
recorded at fair value at acquisition date based on discounted cash
flows. Interest accretion is recognised as a finance expense.
Both Marble Capital and Invictus Capital acquisitions in prior
periods, included contractual terms to defer a portion of
consideration for up to two years. Both parties can call on some
amounts ahead of scheduled anniversary payment dates subject
to certain conditions outside of the Group’s control. Consequently,
a significant portion of this deferred consideration is considered a
current liability. Note 21 outlines a contractual maturity profile to
consider when amounts are expected to be due and payable.
Convertible notes
The Company issued 102,283 convertible notes with a face value
of $1,000 to one holder, issued as part consideration to acquire the
Strategic Portfolio investments in 2021. As part of the transaction
in January 2024 the Convertible Note Deed with GP Strategic
Affiliates was modified to remove the possibility of redeeming
notes for cash.
The carrying value of the convertible notes on 3 January 2024, of
$1.68 million was transferred to equity. Refer Note 20(b) for further
details.
Borrowings
On 16 February 2024, the Group entered into a new credit
agreement with its current lender, BMO Harris Bank N.A. (‘BMO’),
for a new 5 year senior, secured credit facility of $100 million
capacity. This increase in capacity of $30 million available provides
the Group with flexible financing to maximise shareholder returns
and to fund outstanding deferred consideration in relation to the
Marble Capital and Invictus Capital acquisitions. At balance date,
the Group has undrawn funds of $100 million (2023: $60 million).
The new facility matures in February 2029, an extension of
approximately 3.6 years in comparison to the prior terms of the
facility and is secured by a charge over certain Group assets.
The applicable interest rate is benchmarked to the secured
overnight financing rate (“SOFR”) administered by the Federal
Reserve Bank of New York and adjusted for an applicable term
and margin rate. Accrued interest (if any) is included in other
payables on the balance sheet.
Borrowings are subject to the following financial covenants tested
quarterly:
Total Leverage Ratio;
Fixed Charge Cover Ratio; and
Minimum Group AUM levels;
Breaches in meeting the financial covenants would permit the
lender to immediate call for amounts drawn and/or restrict further
drawdowns. There have been no breaches of financial covenants
in the current period.
Navigator Global Investments Limited
2024 Annual Report
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2024
Page 72
18. Other financial liabilities (continued)
a) Redemption payment liability
Consolidated USD’000
2024
2023
Opening fair value / as at acquisition date
160,007
128,373
Unrealised fair value changes recognised in profit and loss
39,993
31,634
Consideration paid to GP Strategic Affiliates
(200,000)
-
Closing fair value
-
160,007
The Group had a written put arrangement over the non-controlling
interest in acquired partnerships which hold minority interests in
the Strategic Portfolio investments. The deferred consideration
payable represented the fair value of non-controlling interest held
by the vendor which the Group had a prior obligation to acquire in
FY2026.
The fair value was based on an earnings multiple applied to the
Strategic Portfolio’s average relevant gross earnings for calendar
years 2021 to 2025 up to a maximum of $200 million. The
maximum was agreed as consideration payable upon early
extinguishment following a transaction with GP Strategic Affiliates
on 3 January 2024. Further details of the transaction and the fair
value at the time of modification are outlined in Note 9.
As the redemption payment was considered contingent
consideration, fair value movements are recorded through profit
and loss.
Navigator Global Investments Limited
2024 Annual Report
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2024
Page 73
Capital and risk
This section provides information on how Navigator Global Investments Limited manages its capital and financial risk entailing
disclosures explaining the Group’s:
capital management, including structure, policies, and related accounts balances; and
exposure to financial risks, including market risks, credit risk, liquidity risk, and the risk arising from financial
instruments.
Where a material accounting policy or key estimate is specific to a single note, the policy or estimate is described in the note to
which it relates.
19.
Capital management
Capital management of the Group focuses on aiming to ensure:
that the Group continues as a going concern;
there is sufficient cash flow to meet operating
requirements;
that it meets financial covenants attached to the interest-
bearing borrowings;
flexibility is maintained for future business expansion;
and
that the payment of dividends is supported in
accordance with the Group’s dividend policy.
The Company’s capital comprises ordinary shares and convertible
notes on issue.
Line of Credit
The borrowing capacity of the Group increased during the period
following an increase in credit and extension of term with current
financiers BMO Harris Bank N.A. (‘BMO’). Capacity increased $30
million to $100 million in February 2024 following a prior increase
in capacity of $70 million in June 2022. The funding was sourced
from an additional lenders, Wintrust Bank, N.A and Byline Bank
respectively. An additional 3.6 years was added to the term,
extending maturity to February 2029.
The increased borrowing capacity provides the Group with flexible
financing to maximise shareholder returns, fund deferred
consideration related to the Marble Capital & Invictus Capital
transactions and provide opportunities to the Group for further
growth. As at balance date the Group has undrawn funds of $100
million (2023: $60 million) and the facility is secured by a charge
over certain Group assets.
Regulatory Capital Requirements
The following capital requirements were complied with throughout
the year:
LHP Ireland Fund Management Limited, a wholly owned
subsidiary, is required by Central Bank of Ireland to
maintain a prescribed capital amount, determined as:
-
a base requirement of 125 thousand Euros
-
plus .02% of excess over 250 million Euros in
assets under management,
-
plus an additional .01% of the assets under
management for potential liability risk.
LH NR UK (Management) LLP, a wholly owned
partnership is required by Financial Conduct Authority to
have capital requirements in four forms:
-
Permanent minimum capital requirement;
-
Fixed overhead requirement of 25% of fixed
overheads;
-
Own funds in excess of own funds threshold
requirement; and
-
Risk responsive computation for potential liability
risk.
NR Capital Management (HK) Limited, a wholly owned
entity is required by the Securities and Futures
Commission to maintain a fixed liquid capital balance
based on the type of license held.
NR Capital Management (SG) Pte Ltd and Penglai Peak
SG Ltd, a wholly owned entities are required by the
Monetary Authority of Singapore to maintain a capital
balance, referred to as the operational risk requirement.
This is calculated as the higher of the sum of 5% of
annual gross earnings up to S$100 million plus 2% of
annual gross earnings above S$10 million for the
average of the 3 preceding financial years; and
S$100,000.
Navigator Global Investments Limited
2024 Annual Report
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2024
Page 74
20.
Capital & Reserves
a) Share capital
Note
Shares ‘000
US$’000
Ordinary shares
2024
2023
2024
2023
Opening balance 1 July
243,692
235,692
368,165
356,186
Issued 3 January 2024 through a placement of shares
9
129,713
-
99,067
-
Issued 3 January 2024 through a rights issue
115,241
-
77,938
-
Less: Transaction costs arising on share issue
-
-
(2,456)
(15)
Issued upon conversion of notes
20(b)
-
8,000
-
11,994
Total share capital at 30 June
488,646
243,692
542,714
368,165
Ordinary shares are classified as equity. Incremental costs directly
attributable to the issue of ordinary shares and share options are
recognised as a deduction from equity, net of any tax effects.
The Company does not have authorised capital or par value in
respect of issued shares. All ordinary shares rank equally with
regard to the Company’s residual assets. Ordinary shares have
the right to receive dividends as declared and are entitled to one
vote per share at general meetings of the Company.
Associated with transaction to acquire remaining interests in the
Strategic Portfolio investments, the Group successfully raised
equity from the following activities:
A Placement of shares to the vendor issued at a contractual
price of A$1.40/share. The fair value of the equity instrument
was determined on the unconditional date of the transaction
of 5 December 2023 at a share price of A$1.16.
Rights issue to all shareholders and noteholders issued at
A$1.00/share representing a 14.7% discount to the
theoretical ex-rights price of A$1.17 and a 19.4% discount to
the ASX quoted price of A$1.24 on the day prior to launching
the offer.
b) Non-share capital
Non-share capital of $89.5 million (2023: $87.8 million) represents the
equity component of 90,289 (2023: 90,289) convertible notes issued
as part consideration for the initial acquisition of the Strategic Portfolio
in 2021. The increase in the period is the transfer of the previously
recorded debt portion of the same notes upon modification of the
convertible note deed in January 2024 to remove the ability for notes
to be redeemed for cash. Nil notes were redeemed in the current
period (2023: 11,994 notes / 7,999,998 ordinary shares).
Each note is convertible into fully paid ordinary shares of the
parent of the Group. Total notes on issue at balance date are
90,289 which equate to 60,222,763 ordinary shares (2023:
60,222,763 shares).
The notes are converted at the option of the holder at any time and at
the option of the issuer after two years (subject to maximum
ownership limits). The notes have a 10 year maturity date.
The convertible notes are non-interest bearing and entitled to
participate in discretionary dividends declared by the Company. No
voting rights are associated with the convertible notes.
c) Parent entity reserve
The parent entity profits reserve comprises the balance of
accumulated profit for the Company not yet distributed as
dividends and available as dividends in future years.
d) Fair value reserve
The fair value reserve comprises the movement in fair value of
financial assets through other comprehensive income above or
below their original purchase value, net of tax. Cumulative fair
value adjustments are transferred to retained earnings upon
derecognition which for the current period was nil (2023: $0.9
million).
e) Share based payment reserve
The Group provides benefits to selected executive employees in
the form of share-based payment arrangements, whereby
employees render services in exchange for shares or rights over
shares (‘equity settled transactions’).
The share-based payments reserve is used to recognise:
the grant date fair value of options and performance
rights issued to employees but not exercised;
the grant date fair value of shares issued to employees;
and
the grant date fair value of deferred shares granted to
employees but not yet vested.
All share based payment instruments are unvested as at balance
date with the exception of one tranche which were cancelled
during the period as they related to the Strategic Portfolio
investment which was settled early. Refer to Note 3 for further
details on share based payment expenses for the period.
Navigator Global Investments Limited
2024 Annual Report
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2024
Page 75
21.
Financial risk management
Classes of financial instruments
The Group held the following non-derivative financial assets and liabilities:
Derecognition of financial instruments
The Group derecognises a financial asset when the contractual
rights to the cash flows from the asset expire, or it transfers the
rights to receive the contractual cash flows on the financial asset in
a transaction in which control, or substantially all the risks and
rewards of ownership are transferred. The Group derecognises a
financial liability when its obligations under the liability is
discharged or cancelled or expire.
During the period the redemption liability was extinguished prior to
its maturity following a transaction with the vendor to settle in cash
and equity.
Offset of financial instruments
Financial assets and liabilities are offset and the net amount
reported in the statement of financial position if there is a currently
enforceable legal right to offset and there is an intention to either to
settle on a net basis or to realise the asset and settle the liability
simultaneously.
Fair value of financial instruments
Fair value hierarchy
The Group classifies fair value measurements using a fair value
hierarchy that reflects the subjectivity of the inputs used in making
the measurements. The different levels of fair value hierarchy are:
Level 1: quoted prices (unadjusted) in active markets for
identical assets or liabilities
Level 2: inputs other than quoted prices included within Level
1 that are observable for the asset or liability, either directly (i.e.
as prices) or indirectly (i.e. derived from prices)
Level 3: inputs for the asset or liability that are not based on
observable market data.
Classification
Description
Note
Assets
Financial assets at
amortised cost
The carrying amount of these assets is a reasonable approximation of fair value
Cash
Trade and other receivables
5
10
Financial assets at fair
value through profit
and loss (FVTPL)
Financial assets (previously contingent consideration asset relating to investment in GROW)
Non-controlling investments in unquoted securities of Group managed entities
Non-controlling investments in unquoted securities of externally managed entities include the
Strategic Portfolio of investments. Fair value movements in these assets through profit and
loss reasonably align with the corresponding movements in financial liability (see below).
The Group does not have significant influence over any of the entities associated with these
investments.
10
11
11
Financial assets at fair
value through other
comprehensive income
(FVOCI)
Non-controlling equity holdings in US based entities over which the Group does not have
significant influence. These investments include the Marble Capital & Invictus Capital
investments.
Fair value movements in these assets are recognised through a reserve within other
comprehensive income.
11
Liabilities
Financial liabilities at
amortised cost
The carrying amount of these assets is a reasonable approximation of fair value
Trade and other payables
Lease liabilities
Deferred consideration
16
14
18
Navigator Global Investments Limited
2024 Annual Report
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2024
Page 76
21.
Financial risk management (continued)
Fair value measurements
The following table shows the fair values of financial assets and liabilities and their levels in the fair value hierarchy.
Consolidated USD’000
Note
Level 1
Level 2
Level 3
Total
2023
Financial assets at fair value through other comprehensive income
Investments in unquoted securities of externally managed
entities
11
-
-
159,000
159,000
Financial assets at fair value through profit and loss
Contingent consideration asset
10
-
-
2,620
2,620
Investment in unquoted securities of externally managed
entities
11
-
-
323,132
323,132
Investments in unquoted securities of Group managed entities
11
-
13,786
-
13,786
Financial liabilities
Redemption payment liability
18
-
-
160,007
160,007
2024
Financial assets at fair value through other comprehensive income
Investments in unquoted securities of externally managed
entities
11
-
-
162,000
162,000
Financial assets at fair value through profit and loss
Financial asset (previously contingent consideration asset)
10
-
-
3,060
3,060
Investment in unquoted securities of externally managed
entities
11
-
-
344,243
344,243
Investments in unquoted securities of Group managed entities
11
-
16,842
-
16,842
There were no transfers between levels during the financial years ended 30 June 2024 or 30 June 2023.
Valuation techniques used to derive level 2 and
level 3 fair values
The fair value of financial instruments that are not in an active
market are determined using valuation techniques. These
valuation techniques maximise the use of observable market data
where available, and if so, the instrument is included in level 2. If
one or more of the significant inputs is not based on observable
market data, the instrument is included in level 3, as is the case for
unlisted equity securities. Specific valuation techniques are
outlined below in addition to those detailed in Note 18(a).
Unquoted securities of externally managed entities
Equity holdings in other externally managed entities are unquoted
and are considered level 3 as the inputs to the fair value are not
based on observable market prices.
Alternative asset managers
A portfolio of investments in alternative asset managers, each
operating within their own niche market. The Group engaged
external, independent and qualified valuers specialising in
unquoted securities to determine the fair value of the Group’s
investment in each alternative asset manager.
A combination of market and income approaches were utilised by
the external valuer based on forecasted cashflows prepared by
management. The utilisation of external valuers evolved the
process into a more robust and balanced approach. Certain
assumptions on model inputs including growth rates on net fee
related earnings, performance fee income and carried interest are
made. The probabilities of various estimates within the range can
be reasonably assessed and are used in management’s estimate
of fair value.
Other externally managed entities:
The Group has small investments in an operator of an online
marketplace for alternative investments & a boutique asset
manager. Continued uncertainty as to the on-going viability of
these investments, carrying value continues to be $nil.
Navigator Global Investments Limited
2024 Annual Report
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2024
Page 77
21.
Financial risk management (continued)
Share in unquoted securities of Group managed
entities
The Group holds investments in Group managed entities, each
with an external administrator who is responsible for determining
the fair value of the underlying investments. This is used to
calculate the net asset value per share at which any investor in the
entity can redeem their investment holding (‘the exit price’). This
exit price is used to fair value these investments at each balance
date. All significant inputs required to fair value the investments
are observable (level 2) and changes in fair value for these
investments are recorded in profit and loss.
Other financial assets
This asset relates to the Groups entitlement to an increase in
ownership in an investment in associate which did not meet
earning targets by an agreed timeframe. Previously recorded as a
contingent consideration asset, this financial asset remains
recorded at fair value based a recent private capital raising
activities which are unobservable inputs and considered level 3.
Movement in Level 3 financial instruments
Consolidated USD’000
Other financial
asset
Investments in
unquoted securities
Note
Through
profit and loss
Through
profit and loss
Through other
comprehensive
income
Total
Opening balance 1 July 2022
1,000
289,246
84,471
373,717
Acquisitions
9
-
-
93,294
93,294
Increase/(Decrease) in fair value
1,620
33,886
(18,765)
15,121
Closing balance 30 June 2023
2,620
323,132
159,000
482,132
Acquisitions
-
-
-
-
Increase/(Decrease) in fair value
440
21,111
3,000
24,111
Closing balance 30 June 2024
3,060
344,243
162,000
506,243
Refer to Note 18(a) for movement in Level 3 financial liability.
Navigator Global Investments Limited
2024 Annual Report
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2024
Page 78
21.
Financial risk management (continued)
Significant unobservable inputs to valuation
The significant unobservable inputs used in the fair valuation measurements categorised within level 3 of the fair value
hierarchy, together with a quantitative sensitivity analysis are shown below:
USD’000
Fair value at
Description
Valuation
technique
30 June
2024
30 June
2023
Unobservable inputs
Sensitivity of the input to fair value
Alternative asset
managers
Investments in
unlisted equity
securities in
externally
managed entities
Income &
Market
approach
506,243
482,132
Expected earnings through the
measurement period
A 1% change in revenue growth
increases/decreases earnings results in a
$13.1m increase / $12.6m decrease (2023: 1%
change, $13.8m increase/$13.2m decrease)
WACC applied to net fee
related earnings ranged from
9 – 23.5% (June 2023: 13 –
22.5%)
A 0.5% increase/decrease in the WACC would
decrease value $4.0m / $4.2m increase value
(2023: 0.5% change, $3.9m decrease / $4.1m
increase)
Discount rate ranged from 28 –
40% (2023: of 27-41%) applied
to performance fee & carried
interest earnings, a higher
degree of variability in earnings
A 0.5% increase/decrease in the discount rate
would result in a $2.7m decrease in value /
$2.8m increase in value (2023: 0.5% change,
$2.4m decrease/ $2.5m increase)
Transaction prices associated
with actual market transactions
for similar investments ranged
from 6.5x – 14x (2023: from
6.5x – 12x)
A 0.5x increase/decrease in market multiples
would result in a $10.1m increase/decrease in
value (2023: 0.5% change, $9.6m
decrease/increase)
Redemption
payment liability
recorded at fair
value
DCF
-
(160,007)
Expected earnings through the
measurement period.
n/a (2023: 1% change in earnings, would not
result in a change as the $200m cap remains
projected)
Discount rate – n/a (2023: 7.9%
was applied)
n/a (2023: 0.5% change in the discount rate
would result in, $2.2m decrease/$2.3m
increase)
Other financial
asset (previously
contingent
consideration
asset)
Market
approach
3,060
2,620
A share price from a recent
capital raise was utilised as an
indicative fair value for potential
increment in equity held.
A 10% increase/decrease in the price per
share would result in a $0.3m increase/ $0.3m
decrease (2023: 10% change, $0.3m
increase/decrease)
Navigator Global Investments Limited
2024 Annual Report
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2024
Page 79
21.
Financial risk management (continued)
Risk Management
The Group has direct and indirect exposure to credit risk, liquidity
risk and market risk (including currency risk, interest rate risk and
equity price risk) arising from its activities.
These risks can impact the Group’s net profit and total equity value
through:
fluctuations in the value of the Group’s investments and other
financial assets and liabilities;
the effect of market risks on the Group’s Assets Under
Management (AUM), which can impact management and
performance fees; and
the amount of interest earned on the Group’s cash balances
and paid on debt drawn.
Market risk
Market risk is the risk that changes in market prices, such as
interest rates, foreign exchange rates and equity prices will affect
the Group’s income or the value of its holdings of financial
instruments.
Interest rate risk
The Group’s exposure to interest rate risk relates primarily to the
line of credit facility and the interest payable on drawn amounts. To
a lesser & offsetting extent, interest rate movements also impact
cash and term deposits which mature in less than 90 days which
generate interest income. However having drawn on the line of
credit facility during the period the exposure to interest rate risk
has heightened.
Consolidated US$’000
2024
2023
Profit and loss (decrease) /
increase
Interest rate + 1%, net of tax
103
88
Interest rate - 1%, net of tax
(103)
(88)
A change in interest rates at reporting date would have impacted
the carrying value of the Group’s variable rate deposits, and would
therefore not have impacted the Group’s equity or profit and loss.
Price risk
The Group is exposed to price risk in relation to the value of its
investments, and indirectly through the impacts on management
and performance fees earned from the fluctuations in the value of
the AUM in the investment products it manages due to market
price movements.
Management fees
The Group earns management fees as a percentage of the assets
it manages on behalf of its funds and clients. Management fees
will be impacted by changes in the value of these assets from
movements in the individual prices of the underlying securities held
as well as the fluctuations in exchange rates for assets which are
not denominated in USD. The following table summarises the
sensitivity of management fees to a change in AUM due to
movements in market prices:
Consolidated US$’000
2024
2023
Profit and loss (decrease) /
increase
Fair value + 5%, net of tax
3,260
2,967
Fair value - 5%, net of tax
(3,260)
(2,967)
The impact of any change to management fees due to changes in
AUM from inflows and outflows of assets by clients due to changes
in market prices has not been estimated.
Performance fees
The Group earns performance fees from some of its funds and
clients. The Group’s entitlement to performance fees varies
between the relevant funds and clients, and generally is dependent
on the relevant fund or client portfolio outperforming a high-water
mark and in some cases a benchmark hurdle over a performance
period. Given the nature of performance fees, the Group is subject
to the risk that in any given financial year it may earn no
performance fees.
Investments
The Group’s investments comprise of:
Unquoted securities of US based companies externally
managed which have been designated as either fair value
through other comprehensive income or through profit and
loss. Refer above for level 3 significant unobservable inputs
into fair values and sensitivities for each.
Unquoted securities of investment funds managed by the
Group. Fair value movements for these level 2 investments
are recorded through profit and loss. The following table
summarises the sensitivity of the fair value (after tax) of these
assets to movements in market prices:
Consolidated US$’000
2024
2023
Financial assets at fair value
through profit and loss Level
2 investments
Profit and loss (decrease) /
increase
Fair value + 5%, net of tax
1,032
534
Fair value - 5%, net of tax
(1,032)
(534)
Navigator Global Investments Limited
2024 Annual Report
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2024
Page 80
21.
Financial risk management (continued)
Currency risk
The Group is exposed to currency risk on revenue, distribution
income, expenses, receivables, and payables that are
denominated in a currency other than the respective functional
currencies of the Group entities. In addition, currency risk on the
investment held in an Australian joint venture and the share of
profits recognised.
The following significant exchange rates applied during the year:
2024
2023
AUD/USD: Average rate
0.6557
0.6735
AUD/USD: 30 June spot rate
0.6657
0.6630
GBP/USD: Average rate
1.2579
1.2047
GBP/USD: 30 June spot rate
1.2639
1.2714
EUR/USD: Average rate
1.0820
1.0476
EUR/USD: 30 June spot rate
1.0701
1.0891
HKD/USD: Average rate
0.1279
0.1276
HKD/USD: 30 June spot rate
0.1281
0.1276
SGD/USD: Average rate
0.7423
-
SGD/USD: 30 June spot rate
0.7372
-
At reporting date, the Group’s direct exposure to currency risk
relates to:
Transactions associated with Navigator Global Investments
Limited (the parent entity of the Australian listed group). This
entity retains a number of working capital balances
denominated in AUD including cash, receivables, trade and
other payables and employee benefits which are translated to
the Group’s functional currency of USD.
Translation of an AUD denominated investment associated
with the joint venture interests acquired during the period. The
Group’s carrying value is translated at period end with
changes reflected in the foreign currency translation reserve.
Entities within the Lighthouse Group which has a functional
currency of USD record some balances denominated in AUD,
GBP, HKD & SGD. These balances comprise of trade
receivables due from a third party for management and
performance fees on funds for which Lighthouse performs
investment services.
EURO distributions are received from a French investment
and is translated to the Group’s functional currency of USD as
soon as practically possible to minimise currency fluctuations.
As the investment held is a non-monetary asset, sensitivity on
the currency impact on recorded fair values is not required.
The following table summarises the sensitivity of these balances
held at reporting date to movement in these currencies against the
USD, with all other variables held constant:
Consolidated US$’000
2024
2023
AUD/USD: appreciation of
10%, net of tax
337
450
AUD/USD: depreciation of
10%, net of tax
(337)
(450)
GBP/USD: appreciation of
10%, net of tax
739
440
GBP/USD: depreciation of
10%, net of tax
(739)
(440)
EURO/USD appreciation of
10%, net of tax
-
3
EURO/USD depreciation of
10%, net of tax
-
(3)
HKD/USD appreciation of
10%, net of tax
39
14
HKD/USD depreciation of
10%, net of tax
(39)
(14)
SGD/USD appreciation of
10%, net of tax
32
-
SGD/USD depreciation of
10%, net of tax
(32)
-
Credit risk
Credit risk is the risk of financial loss to the Group if a customer or
counterparty to a financial instrument fails to meet its contractual
obligations, and arises principally from the Group’s cash deposits
and receivables. The carrying amount of these financial assets
represents the Group’s maximum credit risk exposure.
Cash and lease guarantee deposits
Cash and lease guarantee deposits held in Australia are held with
bank counterparties which are rated A-1+ (Standard & Poor’s).
Cash and lease guarantee deposits held in the United States are
held in deposit accounts which are rated between A+ and A / A-1
(Standard & Poor’s).
Trade and other receivables
At reporting date, 64% of the Group’s trade and other receivables
excluding contingent and other financial assets, related to amounts
receivable from products managed by the Group (2023: 60%).
As at reporting date, the Group did not have any receivables which
were past due. Due to the short-term nature of the Group’s trade
receivables, the fact that the majority relate to Group managed
products, and the historically low default rates, the application of
the expected credit loss model has not resulted in the recording of
a material credit allowance as at 30 June 2024 or 30 June 2023.
In determining this credit allowance, the Group has considered
forward looking factors specific to the receivables and the
economic environment.
Navigator Global Investments Limited
2024 Annual Report
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2024
Page 81
21.
Financial risk management (continued)
Liquidity risk
Liquidity risk is the risk that the Group will encounter difficulty in
meeting the obligations associated with its financial liabilities that
are settled by delivering cash or another financial asset. The
Group’s approach to managing liquidity is to ensure, as far as
possible, that it has sufficient resources available to meet its
liabilities when due, under both normal and stressed conditions,
without incurring unacceptable losses or risking damage to the
Group’s reputation.
The Group maintains 12 month rolling forecasts and 5 year cash
projections, which assist it in monitoring cash flow requirements.
The Group ensures that it has sufficient cash on demand to meet
operational requirements in the short term and has appropriate
strategies in place to satisfy long term obligations.
The Group also has access to a Line of Credit of $100 million
which has increased by $30 million since the prior period with
funding sourced from an additional lender, Wintrust, administered
by BMO. As at 30 June 2024, the fully $100 million facility is
available to be drawn upon.
The liquidity approach adopted by the Group excludes the
potential impact of extreme circumstances which cannot be
predicted.
The following are the contractual maturities of non-derivative financial liabilities as at balance date:
Consolidated US$’000
Note
Carrying
value
Cont-
ractual
cash
flows
6 months
or less
6-12
months
1-2 years
2-5 years
More
than 5
years
30 June 2023
Trade and other payables –
current
16
40,627
(40,627)
(40,627)
-
-
-
-
Convertible note
18
1,655
(2,143)
-
-
-
-
(2,143)
Deferred consideration
18
97,938
(103,594)
(96,688)
(6,906)
-
-
-
Borrowings
18
9,581
(10,000)
-
-
(10,000)
-
Redemption payment
liability
18(a)
160,007
(200,000)
-
-
-
(200,000)
-
309,808
(356,364)
(137,315)
(6,906)
(10,000)
(200,000)
(2,143)
30 June 2024
Trade and other payables –
current
16
7,810
(7,810)
(7,810)
-
-
-
-
Deferred consideration
18
79,553
(81,688)
(81,688)
-
-
-
-
87,363
(87,363)
(87,363)
-
-
-
-
Refer to Note 14 for contractual maturities of the Group’s lease
liabilities.
The above maturity analysis is based on contractual terms, as
classified in the balance sheet of the Group. Deferred
consideration relating to Marble Capital and Invictus Capital
acquisitions are not variable in nature however the majority can be
called upon by sellers. Subject to certain conditions which are
outside the control of the Group, sellers may make capital calls
ahead of defined anniversary dates resulting in amounts included
in the 6 months or less maturity category.
Navigator Global Investments Limited
2024 Annual Report
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2024
Page 82
Group structure
This section outlines how the Navigator Global Investments Limited’s group structure affects the financial position and
performance of the Group as a whole including disclosures on the Group’s composition and key parent entity disclosures.
Where a material accounting policy or key estimate is specific to a single note, the policy or estimate is described in the note to
which it relates.
22.
Group entities
The consolidated financial statements of the Group include the following entities:
Name
Country of
incorporation
% Equity interest
2024
2023
HFA Lighthouse Holdings Corp
United States
100
100
HFA Lighthouse Corp
United States
100
100
LHP Investments, LLC
United States
100
100
Lighthouse Investment Partners, LLC
United States
100
100
Lighthouse Partners UK, LLC
United States
100
100
North Rock Capital Management LLC
United States
100
100
NR Technology Group, LLC
United States
100
100
Mission Crest Capital Management, LLC
United States
100
100
Pier61 Partners, LLC
United States
100
100
Luminae Partners, LLC
United States
100
100
Lighthouse Quantrarian Capital Management, LLC
United States
100
-
Penglai Peak Capital Management, LLC
United States
100
-
NGI Strategic Holdings I, Inc
United States
100
100
NGI Strategic Holdings II, Inc
United States
100
100
NGI Strategic Investments I, Inc
United States
100
-
NGI Strategic Investments II, Inc
United States
100
-
NGI Strategic Australia Pty Ltd
Australia
100
100
NGI Strategic Holdings Ltd
Cayman Islands
100
100
NGI Strategic Holdings (A) LP
Cayman Islands
100
71
NGI Strategic Holdings (B) LP
Cayman Islands
100
56
Lighthouse Partners Limited (HK)
Hong Kong
100
100
NR Capital Management (HK) Limited
Hong Kong
100
100
LHP Ireland Fund Management Limited
Ireland
100
100
North Rock Capital Management (UK) LLP
United Kingdom
100
100
LH NR UK Limited
United Kingdom
100
100
Lighthouse Partners (DIFC) Limited
UAE
100
100
LH Penglai Peak Pte. Ltd.
Singapore
100
-
North Rock Capital Management (SG) Pte. Ltd
Singapore
100
-
Basis of consolidation
The consolidated financial statements are those of the Group,
comprising Navigator Global Investments Limited and all entities
that Navigator Global Investments Limited controlled during the
period and at reporting date.
Control is achieved when the Group is exposed, or has rights, to
variable returns from its involvement in the investee and has the
power to affect those returns through its power over the investee.
The Group has concluded there have been no changes in the
control of subsidiaries, investments recorded at fair value,
investments in joint ventures and associates that have occurred in
the current period.
.
Navigator Global Investments Limited
2024 Annual Report
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2024
Page 83
23.
Parent entity disclosures
As at, and throughout the financial year ended 30 June 2024, the parent company of the Group was Navigator Global
Investments Limited.
Company US$’000
2024
2023
Result of the parent entity
Profit for the year
47,000
30,127
Total comprehensive income for the year
47,015
29,802
Financial position of the parent at year end
Current assets
6,035
4,890
Total assets
633,941
419,497
Current liabilities
(2,088)
(1,045)
Total liabilities
(2,236)
(2,871)
Net assets
631,705
416,626
Total equity of the parent comprising of
Share capital
542,714
368,165
Non-share capital
89,507
87,824
Accumulated losses
(99,342)
(99,342)
Parent entity profits reserve
89,001
51,021
Translation reserve
4,327
4,309
Share based payments reserve
5,498
4,649
Total equity
631,705
416,626
Navigator Global Investments Limited
2024 Annual Report
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2024
Page 84
Other disclosures
This section includes information that must be disclosed to comply with the Accounting Standards, the Corporations Act 2001 or
the Corporations Regulations but the Directors do not consider to be significant in understanding the financial performance and
position of the Group.
24.
Related parties
Key management personnel remuneration
The key management personnel remuneration included in ‘employee expense’ (see Note 3(a)) is as follows:
Consolidated US$
2024
2023
Short-term employee benefits
9,704,734
5,502,810
Long-term employee benefits
16,251
6,877
Post-employment benefits
137,372
123,175
Share-based payment transactions
1,051,927
564,880
Total compensation paid to key management personnel
10,910,284
6,197,742
Detailed remuneration disclosures are provided in the remuneration report on pages 20 to 36.
Transactions with key management personnel
Apart from the details disclosed in this note, no director has
entered into a material contract with the Group since the end of the
previous financial year and there were no material contracts
involving directors’ interests existing at year-end.
There were no transactions with key management personnel
during the year.
Other related party transactions
Revenue from group managed products
During the financial year Group entities recognised management
fees, performance fees and fund reimbursement revenue received
or receivable of $257,319,208 (2023: $169,411,131) from
investment products for which group entities act as general
partner, investment manager or managed account service
provider. Amounts receivable from these products at 30 June 2024
were $16,663,891 (2023: $10,882,406).
Investment in products
As at 30 June 2024, Group entities hold $16,842,792 of
investments in products for which they act as investment manager
or managed account service provider (2023: $13,786,151). Refer
Note 11 for additional detail.
During the financial year, the Group recognised distributions from
its investments in these products of $nil (2023: nil).
For the years ended 30 June 2024 and 30 June 2023, the Group
has not recorded a credit allowance relating to amounts owed by
related parties. Additional information regarding the Group’s
assessment of credit risk in relation to related party receivables
and investments is disclosed in Note 21.
Other
There have been no guarantees provided or received for any
related party receivables. Transactions with joint venture entities
have been included in Note 12.
Navigator Global Investments Limited
2024 Annual Report
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2024
Page 85
25.
Auditors Remuneration
Consolidated US$
2024
2023
Fees to Ernst & Young
EY (Australia):
Audit and review of financial reports for the Group and controlled entities
430,987
320,126
Other non-audit services (advisory)
-
-
Overseas member firms of EY (Australia):
Audit and review of financial reports for the Group and controlled entities
449,858
340,713
Total fees to Ernst & Young
880,845
660,839
Audit fees to other audit firms
Other audit firms (Australia):
Other non-audit services (taxation)
31,215
38,204
Other non-audit services (advisory)
823
24,918
Total fees to other audit firms (Australia)
32,038
63,122
Overseas member firms of other auditors:
Audit and review of financial reports for controlled entities
27,246
14,254
Other non-audit services (taxation)
805,272
854,989
Other non-audit services (advisory)
228,679
104,480
Total fees to overseas member firms of other auditors
1,061,197
973,723
Total fees to other audit firms
1,093,235
1,036,845
Total auditor’s remuneration
1,974,080
1,697,684
26.
Commitments & contingencies
Commitments
At 30 June 2024 the Group had nil commitments (2023: $309
thousand).
Investment fund related obligations
The Company’s subsidiary Lighthouse Investment Partners, LLC
acts as the Investment Manager for certain private investment
funds under Delaware Law, Cayman Islands Law, Irish Law and
Illinois law. Due to its role as Investment Manager the subsidiary
may be subject to contingent liabilities as a result of its obligations
to the funds. The directors of Lighthouse Investment Partners,
LLC consider that all obligations have been met to 30 June 2024.
Guarantees
The Group provides a guarantee to one of the externally managed
entities for its share in a banking facility. In the event of default this
guarantee may be called upon which would be incurred jointly with
other investors. During the period, the facility is undrawn and
therefore no guarantee is applicable (2023: $3.3 million).
27.
Subsequent events
Events occurring after reporting period
On 23 August 2024, the Group entered into definitive
documentation to acquire additional ownership in Invictus Capital
Partners for total consideration of $14.85 million. The transaction
will increase the investment on the Group’s balance sheet. A
portion of the consideration will be deferred until the first
anniversary.
There is no expected impact on the profit and loss upon
completion of the transaction as any associated transaction costs
will be capitalised into the investment.
Other than the above, there has not arisen in the interval between
the end of the reporting period and the date of signing this report,
any item, transaction or event of a material nature, likely to affect
significantly the operations of the Group, the results of those
operations, or the state of affairs of the Group, in future financial
years.
Navigator Global Investments Limited
2024 Annual Report
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2024
Page 86
Basis of preparation
This section sets out the basis upon which the Group’s financial statements are prepared as a whole including information on
new accounting standards, amendments and interpretations, and whether they are effective for the current or later years. How
these changes are expected to impact the financial position and performance of the Group are outlined where relevant.
28.
Corporate information
The financial report of Navigator Global Investments Limited (the
‘Company’) for the year ended 30 June 2024 was approved by the
board of directors on the 27th day of August 2024.
The consolidated financial statements of the Company as at and
for the year ended 30 June 2024 comprise the Company and its
subsidiaries (the ‘Group’). Entities within the consolidated group
are outlined in Note 22.
The Company is a for profit company limited by shares
incorporated in Australia and is listed on the Australian Securities
Exchange. The registered office of the Company is Level 21, 10
Eagle Street, Brisbane QLD 4000.
29.
Statement of compliance
The consolidated financial statements are general purpose
financial statements prepared in accordance with the requirements
of the Corporations Act 2001, Australian Accounting Standards
(AASB) and other authoritative pronouncements of the Australian
Accounting Standards Board. The consolidated financial
statements also comply with the International Financial Reporting
Standards (IFRS) as issued by the International Accounting
Standards Board.
During the period, disclosures reflect changes to the comparative
period to conform to the current period’s presentation. Details of
the Group’s accounting policies, including changes during the
year, are included in Note 32 as well as within the individual notes
to the financial statements if material.
30.
Basis of measurement
The consolidated financial statements have been prepared on a
going concern basis. The consolidated financial statements have
been prepared on a historical cost basis except for the following
items:
Items
Measurement
basis
Note
disclosure
Financial assets at fair value
through profit and loss & other
comprehensive income
Fair value
11 & 21
Other financial assets (formerly
consideration asset)
Fair value
10 & 21
Financial liabilities at fair value
through profit and loss
Fair value
18 & 21
Where the Group’s accounting policies and disclosures require the
determination of fair value, the methods used to measure fair value
are outlined in Note 21.
31.
Functional and presentation
currency
The consolidated financial statements are presented in US dollars
(‘USD’) unless otherwise stated, which is the Company’s functional
currency.
The amounts contained in this financial report have been rounded
to the nearest thousand dollars in accordance with the ASIC
Corporations (Rounding in Financial/Directors’ Reports) Instrument
2016/191 dated 24 March 2016, unless otherwise stated.
Translation of foreign currency
Transactions in foreign currencies are translated to the respective
functional currency of Group entities at rates of exchange ruling on
the date of those transactions. Foreign exchange gains and losses
resulting from the settlement of such transactions, and from the
translation at the year-end exchange rate of monetary assets and
liabilities denominated in foreign currencies, are recognised in
profit and loss.
32.
Other accounting policies
Assumptions and estimation uncertainties
Information about assumptions and estimation uncertainties that
have a significant risk of resulting in a material adjustment within
the next financial year are included in the following notes:
Note 6 - recognition of deferred tax assets: availability of
future taxable profit against which carried forward tax losses
can be used;
Note 10 – financial assets (formerly contingent consideration
asset); fair value measurement of incremental ownership the
Group is entitled to receive;
Note 11 - fair value measurement of investments;
Note 12 – classification of joint arrangements and
assessment of significant influence in associates; and
Note 15 - impairment test: key assumptions underlying
recoverable amounts of intangible assets.
Navigator Global Investments Limited
2024 Annual Report
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2024
Page 87
32.
Other accounting policies
(continued)
Business combinations
The acquisition method of accounting is used to account for all
business combinations regardless of whether equity instruments or
other assets are acquired. Consideration transferred for the
acquisition of an entity comprises the:
fair values of the assets transferred
liabilities incurred to the former owners of the acquired
business
equity interest issued by the group
fair value of asset or liabilities resulting from a contingent
consideration arrangement; and
fair value of any pre-existing equity interest in the subsidiary.
Identifiable assets acquired and liabilities and contingent liabilities
assumed in a business combination are, with limited exceptions
measured at their fair values at the acquisition date. The group
recognises any non-controlling interest in the acquired entity on an
acquisition-by-acquisition either at fair value or at the non-
controlling interest’s proportionate share of the acquired entity’s
net identifiable assets.
If the consideration transferred, amount of non-controlling interest
(if any) and the fair value of any previously held equity interests in
the acquired entity, exceeds the fair value of assets acquired,
goodwill is recorded on the balance sheet. If consideration
amounts are less than the fair value of the net identifiable assets of
the business acquired, the bargain difference is recorded in profit
and loss.
Where deferred consideration is agreed, the amounts payable in
the future are discounted to their present value as at the date of
exchange. Contingent consideration is classified as either equity or
a financial liability. Amounts classified as a financial liability are
subsequently remeasured to fair value with changes in fair value
recognised in the profit and loss.
For business combinations achieved in stages, the acquisition date
carrying value of the acquirer’s previously held equity interest in
the acquiree is remeasured to fair value at the acquisition date.
Any gains or losses arising from a remeasurement is recognised in
the profit and loss.
Transaction costs associated with the acquisition are expensed as
incurred.
Non-controlling interests
When a business combination involves an agreement to purchase
the non-controlling interest at a later date (referred to as a put
arrangement), such as the redemption liability associated with the
Strategic Portfolio, the Group will consider it as a discrete
transaction. The Group did not have a present ownership interest
in the non-controlling interest shares until 2026, hence the Group
elected not to account for the non-controlling interest on initial
acquisition.
As a result, the redemption payment was recorded as a financial
liability upon initial acquisition and subsequent changes in the put
liability fair value recognised in profit and loss. In the current period
the shares subject to the put were accounted for when the
arrangement was settled on 3 January 2024.
Changes in accounting policies
New and amended standards
The Group has adopted all new and revised Standards and
Interpretations issued by the Australian Accounting Standards
Board (the AASB). Those that are relevant to its operations and
effective for the current reporting period include:
AASB 2021-2 Amendments to Disclosure of Accounting
Policies and definition of Accounting Estimates; and
AASB 2022-7 Editorial corrections to AAS and repeal of
superseded and redundant standards.
As a result the Group reviewed accounting policy disclosures and
amended or removed those which are not considered material.
Accounting standards and interpretations issued but
not yet effective
The following Australian accounting standards and interpretations
that are relevant to the Group’s operations have been issued but
are not yet effective and have not been adopted by the Group for
the current period:
AASB 2020-1, 2020-6. 2022-6 & 2023-3 Amendments
regarding the classification of Liabilities as Current or Non-
current. Amendments will be effective for the Group in the
next financial year.
AASB 2023-5 Amendments to Australian Accounting
Standards – Lack of exchangeability. Amendments will be
effective for the Group in the 2026 financial year.
AASB 2014-10 Sale or Contribution of Assets between an
Investor and its Associate or Joint Venture (Amendments to
IFRS 10 and IAS 28). Amendments will be effective for the
Group in the 2026 financial year.
AASB 18 Presentation and disclosure in financial statements.
This standard will result in a significant change in the way the
Group’s income and expense items are shown on the profit
and loss, with more disaggregated information, consistency
with cash flow statements and inclusion of management
performance measures. Effective from the 2028 financial
year, the Group will assess the impact and consider whether
early adoption will be made.
Other than AASB 18, new accounting standards issued but not yet
effective are not expected to have a significant impact on the
Group’s consolidated financial statements.
Navigator Global Investments Limited
2024 Annual Report
CONSOLIDATED ENTITY DISCLOSURE STATEMENT
For the year ended 30 June 2024
Page 88
Name
Country of
incorporation
Entity type
% of share
capital held by
the Company
Country of
tax residency
Navigator Global Investments Limited
Australia
Body Corporate
100
Australia
HFA Lighthouse Holdings Corp
United States
Body Corporate
100
United States
HFA Lighthouse Corp
United States
Body Corporate
100
United States
LHP Investments, LLC
United States
Body Corporate
100
United States
Lighthouse Investment Partners, LLC
United States
Body Corporate
100
United States
Lighthouse Partners UK, LLC
United States
Body Corporate
100
United States
& United
Kingdom
North Rock Capital Management LLC
United States
Body Corporate
100
United States
NR Technology Group, LLC
United States
Body Corporate
100
United States
Mission Crest Capital Management, LLC
United States
Body Corporate
100
United States
Pier61 Partners, LLC
United States
Body Corporate
100
United States
Lighthouse Quantrarian Capital Management,
LLC
United States
Body Corporate
100
United States
Penglai Peak Capital Management LLC
United States
Body Corporate
100
United States
NGI Strategic Holdings I, Inc
United States
Body Corporate
100
United States
NGI Strategic Holdings II, Inc
United States
Body Corporate
100
United States
NGI Strategic Holdings GP LLC
United States
Body Corporate
100
United States
NGI Strategic Investments I, Inc
United States
Body Corporate
100
United States
NGI Strategic Investments II, Inc
United States
Body Corporate
100
United States
NGI Strategic Australia Pty Ltd
Australia
Body Corporate
100
Australia
NGI Strategic Holdings Ltd
Cayman Islands
Body Corporate
100
N/A1
NGI Strategic Investments Ltd
Cayman Islands
Body Corporate
100
N/A1
NGI Strategic Holdings (A) LP
Cayman Islands
Partnership
100
N/A1
NGI Strategic Holdings (B) LP
Cayman Islands
Partnership
100
N/A1
MSW Director Services Limited
Cayman Islands
Body Corporate
100
N/A1
LDO 906 Limited
Cayman Islands
Body Corporate
100
N/A1
Lighthouse Partners Limited (HK)
Hong Kong
Body Corporate
100
Hong Kong
NR Capital Management (HK) Limited
Hong Kong
Body Corporate
100
Hong Kong
LHP Ireland Fund Management Limited
Ireland
Body Corporate
100
Ireland
North Rock Capital Management (UK) LLP
United Kingdom
Partnership
100
United
Kingdom
LH NR UK Limited
United Kingdom
Body Corporate
100
United
Kingdom
Lighthouse Partners (DIFC) Limited
UAE
Body Corporate
100
UAE
LH Penglai Peak Pte. Ltd.
Singapore
Body Corporate
100
Singapore
North Rock Capital Management (SG) Pte. Ltd
Singapore
Body Corporate
100
Singapore
1For the Cayman Island related entities the tax residency status is not applicable.
Navigator Global Investments Limited
2024 Annual Report
Page 89
DIRECTORS’ DECLARATION
In accordance with a resolution of the directors of Navigator Global Investments Limited (the ‘Company’) we state
that:
1. In the opinion of directors:
(a) the consolidated financial statements and notes that are set out on pages 41 to 87, and the Remuneration
report on pages 20 to 36 of the Directors' report, are in accordance with the Corporations Act 2001, including:
(i) giving a true and fair view of the Group’s financial position as at 30 June 2024 and of its performance
for the financial year ended on that date; and
(ii) complying with Australian Accounting Standards and the Corporations Regulations 2001; and
(b) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they
become due and payable; and
(c) the consolidated entity disclosure statement required by section 295(3A) of the Corporations Act is true and
correct.
2. The directors have been given the declarations required by Section 295A of the Corporations Act 2001 from the
Chief Executive Officer and Chief Financial Officer for the financial year ended 30 June 2024.
3. The directors draw attention to note 29 of the consolidated financial statements, which includes a statement of
compliance with International Financial Reporting Standards.
Michael Shepherd, AO
Suvan de Soysa
Chairman and Non-Executive Director
Non-Executive Director
Sydney, 27 August 2024
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
Page 90
Ernst & Young
111 Eagle Street
Brisbane QLD 4000 Australia
GPO Box 7878 Brisbane QLD 4001
Tel: +61 7 3011 3333
Fax: +61 7 3011 3100
ey.com/au
Independent auditor’s report to the members of Navigator Global
Investments Limited
Report on the audit of the financial report
Opinion
We have audited the financial report of Navigator Global Investments Limited (the Company) and its
subsidiaries (collectively the Group), which comprises the consolidated statement of financial position
as at 30 June 2024, the consolidated income statement, consolidated statement of comprehensive
income, consolidated statement of changes in equity and consolidated statement of cash flows for the
year then ended, notes to the financial statements, including material accounting policy information,
the consolidated entity disclosure statement and the directors’ declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations
Act 2001, including:
a.
Giving a true and fair view of the consolidated financial position of the Group as at 30 June 2024
and of its consolidated financial performance for the year ended on that date; and
b.
Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the financial
report section of our report. We are independent of the Group in accordance with the auditor
independence requirements of the Corporations Act 2001 and the ethical requirements of the
Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional
Accountants (including Independence Standards) (the Code) that are relevant to our audit of the
financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with
the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in
our audit of the financial report of the current year. These matters were addressed in the context of
our audit of the financial report as a whole, and in forming our opinion thereon, but we do not provide
a separate opinion on these matters. For each matter below, our description of how our audit
addressed the matter is provided in that context.
We have fulfilled the responsibilities described in the Auditor’s responsibilities for the audit of the
financial report section of our report, including in relation to these matters. Accordingly, our audit
included the performance of procedures designed to respond to our assessment of the risks of
material misstatement of the financial report. The results of our audit procedures, including the
procedures performed to address the matters below, provide the basis for our audit opinion on the
accompanying financial report.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
Page 91
Investment Valuation
Refer to Notes 11 and Note 21 of the financial report
Why significant
How our audit addressed the key audit matter
The Group has a significant investment portfolio
comprising primarily of six minority interests in unlisted
investment managers including Bardin Hill Investment
Partners, LP, Waterfall Asset Management, LLC, Capital
Fund Management S.A., Capstone Investments Advisors,
LLC, Pinnacle Asset Management, LP, MKP Capital
Management, LLC (Strategic Portfolio) and two minority
interests in unquoted securities in Invictus Capital
Partners and Marble Capital. As at 30 June 2024, the
value of these unlisted investments was US$523 million
which equates to 66% of total assets.
As disclosed in the Group’s accounting policy in Note 11,
the Strategic Portfolio are financial assets recognised at
fair value through profit or loss, and Invictus Capital
Partners and Marble Capital are financial assets
recognised at fair value through other comprehensive
income in accordance with the requirements of
Australian Accounting Standards.
Key assumptions such as the growth rates and discount
rates applied to the management fee and performance
fee income streams can have a significant impact on the
fair value of these financial assets and amounts recorded
in the financial statements.
Note 11 to the financial statements discloses the Group’s
accounting policy relating to the investments and Note
21 includes the disclosures relating to the significant
unobservable inputs to the valuation.
Accordingly, the significant estimation and judgement
involved in measuring the fair value of investments, we
considered this to be a key audit matter.
Our audit procedures included the following:
•
Obtained an understanding of the key processes
adopted by management to assess the fair value
of the investments;
•
Confirmed the ownership interest with the
respective investee fund managers at 30 June
2024;
•
Obtained the most recent audited financial
statements of the underlying investment
managers including review of the content of the
audit opinion, considered the nature of the
underlying investments held and the recorded
fair values of those investments, including the
accounting basis adopted for such valuations;
•
Obtained, where available, assurance reports on
the internal controls of the investment
manager’s administrators in relation to fund
administration services for the year ended 30
June 2024, and assessed the auditor’s
independence, qualifications and objectivity, and
the results of their procedures;
•
Obtained management’s assessment of the most
recent unaudited financial information of the
asset managers and evaluated the
reasonableness of any material fair value
movements (or the lack thereof) within the
discounted cash flow models supporting the fair
value;
•
Evaluated the qualifications, competence, and
objectivity of the external valuer engaged by
management;
•
On a sample basis, assessing the reasonableness
of underlying cash flow assumptions by agreeing
to supporting documentation; and
•
Assessed the adequacy of the Group’s
disclosures included in Notes 11 and 21 to the
financial statements.
•
We involved our valuation specialists in:
•
Evaluating the valuation methodologies and
assumptions used by the Group to estimate
the fair value of its investments at 30 June
2024; and
•
On a sample basis, testing the
mathematical accuracy of the model used
by the external valuer.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
Page 92
Recoverability of Goodwill relating to Lighthouse CGU (US CGU)
Refer to Note 15 of the financial report
Why significant
How our audit addressed the key audit matter
At 30 June 2024 the Group has goodwill of $93.8m as
disclosed in Note 15 which is allocated to the Group’s US
cash generating unit (“CGU”).
The Group performs an annual impairment assessment
which involves the comparison of the carrying amount of
the CGU with its recoverable amount.
The model used by the Group to determine the
recoverable amount of the CGU is complex due to
assumptions and estimations used in forecasting the
future cash flows of the CGU, discount rates and terminal
growth rates.
Given the carrying amount of goodwill and the judgement
and estimation involved in calculating the recoverable
amount of the CGU we considered this a key audit matter.
Our audit procedures included the following:
•
Tested the mathematical accuracy of the
model used to calculate the recoverable
amount;
•
Evaluated the Group’s key input
assumptions used to forecast cash flows
used in the recoverable amount calculation,
including agreeing cashflows to the most
recent Board approved forecasts;
•
Assessed the accuracy of the Group’s cash
flow forecasts by comparing historic
forecasts to actual performance;
•
Evaluated the qualifications, competence
and objectivity of the external specialists
engaged by management;
•
Involved our valuation specialists in
assessing the growth rate and discount rate
used in the model which included
considering the methodology applied is in
accordance with the requirements of
Australian Accounting Standards;
•
Performed sensitivity analysis by varying
key input assumptions and assessing the
impact on the recoverable amount of the
CGU; and
•
Assessed the adequacy of the disclosures
included in Note 15 to the financial
statements.
Redemption Payment Transaction
Refer to Note 9 and Note 18 of the financial report
Why significant
How our audit addressed the key audit matter
The Group’s redemption liability with GP Strategic
Affiliates was settled on 3 January 2024. The overall
consideration for this transaction was $179 million.
Note 9 of the financial statements discloses a summary of
the transaction and 18 discloses the Group’s accounting
policies relating to the transaction.
Given the size of the transaction, we considered this a key
audit matter.
Our audit procedures included the following:
•
Read the transaction agreement, including
understanding the required regulatory
approvals;
•
Evaluated the Group’s accounting for the
transaction with reference to the
requirements of Australian Accounting
Standards;
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
Page 93
Why significant
How our audit addressed the key audit matter
•
Tested the consideration paid to settle the
redemption liability and amounts received
from the Group’s capital raising to bank
statements and share issue documents;
•
Tested the transactions costs incurred to
invoices and other supporting documents
and assessed the allocation of transaction
between equity raising costs and finance
costs; and
•
Assessed the adequacy of the Group’s
disclosures included in Note 9 and 18 to the
financial statements.
Information other than the financial report and auditor’s report thereon
The directors are responsible for the other information. The other information comprises the
information included in the Company’s 2024 annual report, but does not include the financial report
and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not
express any form of assurance conclusion thereon, with the exception of the Remuneration Report
and our related assurance opinion.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the directors for the financial report
The directors of the Company are responsible for the preparation of:
a.
The financial report (other than the consolidated entity disclosure statement) that gives a true and
fair view in accordance with Australian Accounting Standards and the Corporations Act 2001;
and;
b.
The consolidated entity disclosure statement that is true and correct in accordance with the
Corporations Act 2001, and
for such internal control as the directors determine is necessary to enable the preparation of:
i.
The financial report (other than the consolidated entity disclosure statement) that gives a true and
fair view and is free from material misstatement, whether due to fraud or error; and
ii.
The consolidated entity disclosure statement that is true and correct and is free of misstatement,
whether due to fraud or error.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
Page 94
In preparing the financial report, the directors are responsible for assessing the Group’s ability to
continue as a going concern, disclosing, as applicable, matters relating to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of this financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional
judgment and maintain professional scepticism throughout the audit. We also:
►
Identify and assess the risks of material misstatement of the financial report, whether due to
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not
detecting a material misstatement resulting from fraud is higher than for one resulting from
error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control.
►
Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Group’s internal control.
►
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the directors.
►
Conclude on the appropriateness of the directors’ use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to
events or conditions that may cast significant doubt on the Group’s ability to continue as a going
concern. If we conclude that a material uncertainty exists, we are required to draw attention in
our auditor’s report to the related disclosures in the financial report or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up
to the date of our auditor’s report. However, future events or conditions may cause the Group to
cease to continue as a going concern.
►
Evaluate the overall presentation, structure and content of the financial report, including the
disclosures, and whether the financial report represents the underlying transactions and events
in a manner that achieves fair presentation.
►
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Group to express an opinion on the financial report. We are
responsible for the direction, supervision and performance of the Group audit. We remain solely
responsible for our audit opinion.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
Page 95
We communicate with the directors regarding, among other matters, the planned scope and timing of
the audit and significant audit findings, including any significant deficiencies in internal control that we
identify during our audit.
We also provide the directors with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, actions
taken to eliminate threats or safeguards applied.
From the matters communicated to the directors, we determine those matters that were of most
significance in the audit of the financial report of the current year and are therefore the key audit
matters. We describe these matters in our auditor’s report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter
should not be communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.
Report on the audit of the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in the directors’ report for the year ended 30
June 2024.
In our opinion, the Remuneration Report of Navigator Global Investments Limited for the year ended
30 June 2024, complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our
responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in
accordance with Australian Auditing Standards.
Ernst & Young
Nathan Young
Partner
Brisbane
27 August 2024
SHAREHOLDER
INFORMATION
Navigator Global Investments Limited
Shareholder information
Page 97
ASX additional information
As at 16 August 2024
Additional information required by the Australian Securities Exchange Limited (ASX) Listing Rules and not disclosed elsewhere in this document
is set out below.
Number of security holders and securities on issue
Navigator has issued the following securities:
488,646,396 Ordinary Shares held by 2,956 shareholders; and
90,289 Convertible Notes held by 1 noteholder.
Substantial shareholdings
The following beneficial owners have a substantial relevant interest in ordinary shares of Navigator Global Investments Limited:
Category
Number of
ordinary shares
%
Blue Owl Capital Inc. and its controlled entities
226,336,357
46.32%
Sean McGould, his controlled entities and associates
27,123,266
5.55%
Norges Bank
26,625,831
5.45%
Twenty largest holders
Name
Number of ordinary
shares held
Percentage of
capital held
J P Morgan Nominees Australia Pty Limited
267,699,863
54.78%
Citicorp Nominees Pty Limited
99,984,167
20.46%
HSBC Custody Nominees (Australia) Limited
22,616,513
4.63%
UBS Nominees Pty Ltd
18,888,513
3.87%
HSBC Custody Nominees (Australia) Limited – GSCO ECA
7,245,648
1.48%
HSBC Custody Nominees (Australia) Limited – NT-Comnwlth Super Corp
6,315,831
1.29%
HSBC Custody Nominees (Australia) Limited- A/C 2
4,487,306
0.95%
Priority Investment Management Pty Ltd
7,275,617
0.92%
Neweconomy Com AU Nominees Pty Ltd
3,281,835
0.67%
Warbont Nominees Pty Ltd
3,050,375
0.62%
BNP Paribas Nominees Pty Ltd
2,653,269
0.54%
BNP Paribas Nominees Pty Ltd – IB AU Noms RetailClient DRP
2,485,896
0.51%
ABN Amro Clearing Sydney Nominees Pty Ltd – Custodian A/C
2,168,916
0.44%
Mr Shay Shimon Hazan-Shaked
1,933,807
0.36%
HSBC Custody Nominees (Australia) Limited – GSI EDA
1,743,264
0.36%
BNP Paribas Nominees (NZ) Ltd
1,505,811
0.31%
BNP Paribas Nominees Pty Ltd Hub24 Custodial Serv Ltd
1,305,141
0.27%
Mr Mark Sheffield Hancock & Brig Ian Denis Westwood
1,273,104
0.26%
BNP Paribas Nominees Pty Ltd – Agency Lending A/C
962,447
0.20%
Sheffield Management Pty Ltd
899,500
0.18%
Navigator Global Investments Limited
Shareholder information
Page 98
ASX additional information (continued)
Distribution of shareholdings
Range
Number of holders
of ordinary shares
% of holders
Number of ordinary
shares
% of share
1-1,000
808
27.33%
393,664
0.08%
1,001-5,000
1,021
34.54%
2,757,065
0.56%
5,001-10,000
411
13.90%
3,123,338
0.64%
10,001-50,000
576
19.49%
12,776,479
2.61%
50,001 – 100,000
74
2.50%
5,212,938
1.07%
100,001 and over
66
2.23%
464,382,912
95.03%
Total
2,956
100.00%
488,646,396
100.00%
The number of shareholders holding less than a marketable parcel of ordinary shares is 230.
Voting rights
Ordinary Shares
The Company has 488,646,396 fully paid ordinary shares on
issue.
The fully paid ordinary shareholders of the Company are entitled to
vote at any meeting of the members of the Company and their
voting rights are:
on a show of hands – one vote per shareholder; and
on a poll – one vote per fully paid ordinary shares.
Convertible Notes
Noteholders do not have any voting rights on the Convertible
Notes held by them.
On-market buy-back
There is no current on-market buy-back.
Restricted securities and voluntary escrow
There are 185,812,051 NGI shares and 90,289 Convertible Notes
in voluntary escrow.
The Trustee for Dyal Trust and the custodian of the Shars and
Notes held on behalf of Dyal Trust have agreed to voluntarily
escrow Shares and Convertible Notes held by the custodian on
behalf of Dyal Trust, to be released upon the announcement of
Navigator’s financial results for the financial year ending 30 June
2026 (the Escrow).
The Escrow will cease to apply to the extent necessary to allow the
custodian to deal in any of the securities in Escrow if the dealing
arises out of (i) the acceptance of a bona fide third party Takeover
Bid in respect of the Shares, provided that the holders of at least
half of the Shares that are not subject to any escrow arrangements
with the Company in relation to Shares, and to which the offers
under the bid relate, have accepted the bid; or (ii) the transfer or
cancellation of the Shares in the Company as part of a scheme of
arrangement under Part 5.1 of the Corporations Act. The custodian
agrees that escrow restrictions will be re-applied in each case in (i)
and (ii) if any securities are not transferred or cancelled in
accordance with that Takeover Bid or scheme of arrangement.
The Escrow will also cease to apply to the extent necessary to
allow the trustee or custodian to undertake a reorganisation,
subject to there being no change to the underlying interests of the
beneficiaries of Dyal Trust and any new holder agreeing to be
bound by an escrow on substantially the same terms as the
Escrow.
The Escrow will also cease to apply under some more general
circumstances to allow a dealing in Shares, (a) if required by any
applicable law or pursuant to an order of a court of competent
jurisdiction compelling a dealing with the Shares, or (b) if the
dealing constitutes a transfer or disposal of, but not the creation of
a security interest in Shares to a (i) trustee of an affiliated fund or
(ii) member of the GP Strategic Capital Investor Group or its
Affiliates, provided that the respective trustees/members in (i) and
(ii) (and custodian if applicable) also agree to be bound by an
escrow on substantially the same terms as the Escrow for the
remainder of the Escrow period, and the terms of deed provide
that where the trustee or member in (i) and (ii) ceases to be an
affiliated fund or member of the GP Strategic Capital Investor
Group or its Affiliates, then the Escrow Shares must be transferred
to a trustee (or custodian if applicable) of an affiliated fund or
member of the GP Strategic Capital Investor Group or its Affiliates,
which enter into an escrow on substantially the same terms as the
Escrow.
Stock exchange listings
The Company’s securities are not listed on any other stock
exchange.
Unquoted securities
Convertible Notes
The Company issued 102,283 Convertible Notes on 1 February
2021. Total notes on issue at balance date are 90,289 notes
representing 60,222,763 shares (2023: 60,222,763 shares).
The notes are converted at the option of the holder at any time and
at the option of the issuer after two years (subject to maximum
ownership limits).
Name
Number of
Convertible
Notes held
Percentage
held
J P Morgan Nominees Australia
Pty Limited in its capacity as
custodian for Blue Owl Capital
Inc in its capacity as trustee for
Dyal Trust I
90,289
100%
There is no price payable on conversion of the Convertible Notes.
Navigator Global Investments Limited
Shareholder information
Page 99
ASX additional information (continued)
The following sets out the key terms of the Convertible Notes:
Ordinary shares issued on
conversion
Each Convertible Note will be convertible into Shares ranking equally with other existing fully paid
ordinary shares in the Company.
The Company must procure official quotation of the Shares issued on conversion.
Convertible Noteholder
conversion rights
A Convertible Noteholder may, at any time, require the conversion of all or some of its outstanding
Convertible Notes, subject to the following regulatory restrictions:
(a)
where such conversion is a notifiable action for the Convertible Noteholder under the FATA and
that Convertible Noteholder has not received FIRB approval in respect of such conversion;
(b)
where such conversion would contravene section 606 of the Corporations Act;
(c)
if the Convertible Noteholder (or its underlying beneficiaries) is GPSC Investor or any of its
Affiliates, such conversion would result in GPSC Investor or any of its Affiliates having a Relevant
Interest in the Issuer of more than 46.5%;
(d)
such conversion is subject to the expiration of a waiting period under the HSR Act, until the
expiration of such waiting period; or
(e)
where such conversion is prohibited by any applicable law or regulation.
Company Conversion Rights
On an annual basis from the seventh anniversary of the issue date, the Company may require
conversion of all or some of the Convertible Notes. Where the Company requires the conversion for
some of the Convertible Notes:
(a)
the aggregate face value of all Convertible Notes to be converted on that date must be at least
US$1 million; and
(b)
if there is more than one Convertible Noteholder, the conversion must be pro rata for each
Convertible Noteholder based on the number of Convertible Notes held by that Convertible
Noteholder as a proportion of all Convertible Notes on issue.
Maturity Date
To the extent that Conditions 5.2(b)(i) to 5.2(b)(v) (inclusive) apply to the conversion of any Convertible
Notes held by a Convertible Noteholder that remain outstanding on the Maturity Date, then the Maturity
Date will be extended for 3 years until the process for making any relevant filing and obtaining such
approval or consent as contemplated by Condition 5.2 is completed and Condition 5.2 is satisfied (and
for the avoidance of doubt, multiple extensions of the Maturity Date may occur until the process for
making any relevant filing and obtaining such approval or consent as contemplated by Condition 5.2 is
completed).
Restrictions on transfer
The Convertible Notes are transferrable:
(a)
without the prior written consent of the Company, provided that if such transfer is a notifiable
action under the FATA, that the Convertible Noteholder has received FIRB approval in respect
of such transfer and such transfer is not or would not otherwise be prohibited or restricted
pursuant to any applicable law or regulation; or
(b)
otherwise, subject to the prior written consent of the Company (such consent may be given or
withheld at the absolution discretion of the Company).
US law transfer restrictions also apply to the transfer of Convertible Notes.