This strategy makes sense, but the value of
asset management businesses obviously resides primarily in people & goodwill — I'm concerned about the potential implications for EIIB's market valuation.
Not exact matches
While the super sector generally thinks of itself as being in the
asset management business, it is
obviously very much in the intermediation
business.
Quite
obviously, growing the
asset management business & increasing the share price / NAV has become a far more lucrative proposition now than attempting to gouge shareholders.
You're implying a 50 % drop in AUM — in that scenario, the
asset management business would
obviously be worth more dead (i.e. sold) than alive.
In reality, the discount's (far) larger — return all cash / investments to shareholders, and
obviously Argo's
asset management business would continue to have some positive market value].