Opportunity In ‘Mini Macquarie’ Weakness

Small Caps | 11:15 AM

Following the recent share price decline in MA Financial, analysts believe market concerns have been grossly overstated.

• MA Financial shares seen as undervalued
• Offshore private credit concerns overdone
• Strong asset management growth and lending momentum
• MA Money grows faster than expected by management

By Mark Woodruff

Opportunities to buy into a business with a strong earnings outlook at a discounted valuation, right as it turns an inflection point, are few and far between, even though bear-market conditions for large parts of the ASX in 2026 are probably offering more such opportunities than otherwise would be the case.

New research by Canaccord Genuity suggests MA Financial ((MAF)), an alternative asset manager and specialty financials platform with a market cap of circa $1.3bn, stands out as one not to be missed.

The market is seen as placing undue emphasis on perceived risks compared to underlying fundamentals, with FY25 results in February marking that inflection point.

Supporting this view, Jarden’s recent research initiation on the company equally highlights undervaluation, following a share price decline to around $6.94 from $11.26 post the release of 2025 results.

Sometimes referred to as the ‘mini-Macquarie Group’ ((MQG)), operations span Asset Management, Lending & Technology, and Corporate Advisory & Equities, with Asset Management the largest contributor at 64% of FY25 earnings ex-corporate costs.

The Asset Management segment has rapidly grown assets under management (AUM) to more than $15bn at FY25 year-end, becoming the largest contributor to group EBITDA and delivering accretive margins above 45%.

Private credit and real estate are the core strategies sitting within this segment, with around $7bn each in assets under management (AUM).

The company’s origins lay in Moelis Australia, which listed on the ASX in 2017 as a corporate advisory and equities business.

A strategic shift culminated in a rebrand to MA Financial Group in 2021, reflecting a broader platform spanning private credit, real estate, hospitality, and private equity alongside traditional advisory services.

Share price weakness

Jarden attributes the share price retreat to prior positive positioning into the February 2026 result release and broader negative sentiment toward the private credit sector stemming from the US.

Recent attention has centred on private credit funds overseas and their exposure to AI disruption, but Ord Minnett draws a distinction with MA Financial’s portfolio, where software accounts for just 2.9% of exposures compared with 13–26% for some large US-based funds.

Jarden points out the company has a 0% loss history and nil loans in non-accrual or over 90-day arrears. Its average loan profile is more conservative than typical US business development companies (BDCs).

While around 85% of MA Financial’s private credit book is comprised of asset-backed investments, sentiment-driven pressure on fund flows is the primary near-term risk, the broker suggests.

Canaccord sees the company as relatively insulated from issues affecting offshore private credit funds, given its exposure to residential and commercial development sectors rather than private equity-backed SaaS companies facing fundraising challenges.

Look-through data are seen as highlighting both resilience and diversification, and limited exposure to offshore risks.

Further, potential redemption pressure among its core retail and high-net-worth investor base is mitigated during periods of uncertainty.

Canaccord notes MA Financial’s circa $7bn private credit AUM includes a flagship fund, representing around half the total, which features a first-loss buffer.

A first-loss buffer is a layer of protection where one party (often the manager) agrees to absorb initial losses before other investors are affected.

It’s also noted around two-thirds of the underlying portfolio is rated BBB or higher, offering additional downside protection.

In further explaining recent share price weakness, Jarden notes MA Financial’s share price is more sensitive to overall market movements than average, with the small-cap index down -17% from its January 2026 peak.

Jarden now assesses the shares offer an attractive entry point, trading on around 14x next twelve months forecast earnings, the lowest level in nearly two years.

For the coming year and the medium term, the analyst at Canaccord forecasts strong earnings growth at an around 28% compound annual growth rate (CAGR), leaving shares trading on an attractive 16x FY26 price earnings ratio.

Separately, this broker sees Real Estate delivering another strong year, with Redcape Hotel Group and Gold Coast City Marina (GCCM) performing well and broader portfolio activity supporting continued fee growth, underpinned by an integrated lending platform.

Redcape is an Australian pub and hospitality operator, owning and operating a portfolio of pubs, gaming venues and accommodation assets, with MA Financial managing and holding exposure through its real estate and private equity funds.

Providing exposure to the high-end marine and the superyacht market, GCCM is a large marine maintenance, refit and superyacht facility in Queensland.

In mid-March, Ord Minnett recommenced coverage of MA Financial, noting continued momentum in asset management net inflows and expecting strong growth in near-term assets under management (AUM) following launches of new vehicles in FY25.

The residential lending business is gaining traction, the broker observes, and is set to deliver a more meaningful profit contribution in FY26.

MA Money

The residential lending business, MA Money, reported its first full year of positive earnings in FY25, with the loan book up by 148%.

Jarden highlights this business has grown materially faster than initially expected by management.

Ord Minnett expects strong near-term profit growth as the loan book expands from a low base, with market share of just 0.2%.

The latter broker forecasts FY26 earnings will increase by 150% to $28m from $11m in FY25.

While the company’s Finsure aggregator platform has delivered weaker-than-expected operating leverage, it has nonetheless supported the rapid growth of MA Money, Jarden explains.