Why fund managers remain divided on Generation Development Group

Generation Development Group's investment bonds business keeps compounding, but repeated delays in its Evidentia managed accounts acquisition have weighed heavily on the stock.

30 Jun 2026 · 7 min read

Wealth and retirement products group Generation Development Group has spent much of the past year working through a difficult integration of its Evidentia managed accounts acquisition, even as its investment bonds business keeps compounding. QVG Capital's June 2026 Monthly Report acknowledged the stock has been a poor performer, falling 39% calendar year to date, while noting Lonsec Research and the Investment Bond business continue to perform well and are set to accelerate further as a big winner from recent capital gains tax changes.

Investment bonds compounding while Evidentia disappoints

Cerutty Macro Fund's detailed February 2026 report laid out the structural tailwind behind the investment bonds business: Generation Life commands 60% of annual market inflows and had grown Investment Bonds funds under management to $5.2 billion, up 34% year on year, with every dollar sitting on the platform for an average of 14.3 years, producing exceptionally sticky, high-margin revenue. The same report flagged Division 296, proposed superannuation tax changes expected to take effect from 1 July 2026, as a major structural tailwind likely to push wealth managers and advisers toward tax-effective vehicles outside superannuation, an area where investment bonds are well placed.

A P/E multiple in the mid to high 20s looks modest to us for what is north of a 30% grower with long term tailwinds.

— QVG Capital, Monthly Report, April 2026

The managed accounts side of the business has been the recurring source of disappointment. Ausbil Investment Management's series of monthly reports through early 2026 tracked repeated misses on Evidentia fund flow timing, with its March 2026 report describing a 28.7% monthly fall in sympathy with broader markets, while its April 2026 update called the pattern of missed mandate timing a case of deja vu, even as the Division 296 tailwind and investment bond momentum kept the medium-term outlook intact. QVG Capital's May 2026 Article was blunter still, stating the Evidentia acquisition has disappointed, with management having overpaid, overpromised and underdelivered, though QVG still rated the stock a buy given the managed accounts trend is not going away and earnings could grow in the mid-20s percent range for the foreseeable future.

What managers are watching next

Ophir Asset Management's commentary through April and June 2026 showed the stock remains a large, long-term holding despite repeated short-term setbacks, including a further push-out of the HUB24 Xplore mandate transition that was ultimately completed by 7 May 2026. With a forward price-to-earnings multiple of around 25 times by mid-2026, QVG Capital's view is that accelerating investment bond flows, a step-up in technology spend into FY27, and eventual delivery on managed account mandates should compress that multiple rapidly as earnings catch up, even as near-term flow delays continue to test investor patience.