How Will L1 Group Harness $16.7bn Merger and $286m Capital Raise for Growth?

A New Chapter for L1 Group

On 1 October 2025, the merger between Platinum Asset Management and L1 Capital was finalised, giving birth to the newly branded L1 Group Limited (ASX, L1G). This strategic union combines two of Australia's respected investment management brands, creating a firm with $16.7 billion in funds under management (FUM) as of October 2025. The merger was overwhelmingly supported by shareholders and marks a significant milestone in the Australian asset management landscape.

Chair Guy Strapp opened the 2025 Annual General Meeting by reflecting on a year of transformation. Despite a challenging environment that saw Platinum’s FUM decline from $13 billion to $7.9 billion by June 2025, the company successfully executed a cost reduction program, cutting adjusted expenses by 22% and maintaining a robust adjusted EBIT margin of 44%. These efforts laid the groundwork for the merger and positioned the combined entity for future growth.

Capital Raising and Leadership Renewal

To capitalise on the merger’s momentum and fund growth initiatives, L1 Group raised $286 million through an institutional placement priced at a 7.8% discount to the pre-announcement share price. This was complemented by a retail share purchase plan targeting an additional $25 million. The capital raise attracted cornerstone investors such as MFF Capital Investments and Washington H. Soul Pattinson, underscoring confidence in L1 Group’s strategic direction.

Julian Russell, formerly CEO of ASX-listed FleetPartners, was appointed CEO and Managing Director to steer the newly merged group. Russell brings 25 years of financial services experience and is tasked with integrating the businesses, delivering cost synergies, and driving growth across multiple fronts.

Strategic Growth Pathways and Integration Focus

L1 Group outlined four key growth pathways, organic growth of existing funds, extension strategies leveraging current investment teams, joint ventures to attract new talent, and selective mergers and acquisitions. The Group’s flagship L1 Long Short Fund continues to deliver strong performance, complemented by promising new strategies such as the L1 Global Long Short fund, which has returned over 45% net since its January 2025 inception.

However, challenges remain. Platinum’s FUM experienced net outflows, including a significant $580 million institutional redemption in September 2025. The Group expects these outflows to persist but at a decelerating pace over the next 18 months. Stabilising Platinum’s funds under management and enhancing its investment capabilities are top priorities during the integration phase.

Financial Outlook and Market Position

Pro forma financials as at 30 June 2025 show the merged L1 Group generating approximately $262 million in total revenue, $142 million in underlying EBITDA, and $96 million in underlying net profit after tax. The merger is expected to deliver cost synergies of $30–35 million within 18 months, potentially lifting EBITDA margins from 54% to 65%.

With a scalable operating platform and diversified client base, L1 Group is well positioned to expand distribution channels domestically and internationally. The Board remains optimistic about the merger’s value uplift, reflected in a 114% increase in share price since the merger announcement in July 2025.

Looking ahead, the Group will shift to quarterly reporting of funds under management, with the next update due for the December 2025 quarter. Investors will be watching closely as L1 Group executes its integration strategy and pursues growth opportunities in a competitive market.