Why fund managers are wary of GQG Partners' key-man risk

GQG Partners has faced sustained fund outflows after underperforming the market by around 20% in 2025, with fund managers split on whether the dividend yield is sustainable.

13 May 2026 · 6 min read

Global equities fund manager GQG Partners has been caught in a sustained cycle of fund underperformance driving outflows, which in turn drives further underperformance concerns among its own shareholders. Oracle Advisory Group's September 2025 Quarterly Report described the pattern turning from volatile into a sustained decline, falling 12.2% in August and 3.72% in September after GQG's underlying funds underperformed through the year, with the market clearly signalling expectations that outflows would continue.

A key-man risk overshadowing a strong track record

Seneca Financial Solutions' July 2025 Monthly Report detailed the trigger for the initial leg of the decline: the company reported US$1.4 billion in outflows during July, sending the stock down 15% on the announcement, a result the manager had already sold ahead of on concerns about trailing investment performance. Oracle Advisory Group's report drew a pointed historical parallel, noting GQG's chief investment officer and chairman Rajiv Jain has an enviable stock-picking and portfolio construction track record that enabled the firm's meteoric rise, but cautioned the market has seen this film before, referencing fellow star-manager-led business Magellan.

Our problem with GQG is not that they're getting outflows. It's just that I feel like I'm buying a person, not a company. There is a star stock picker there... If they leave, run for the door.

— Alliance Bernstein, Article, May 2026

Perpetual Asset Management's March 2026 Article detailed the source of the underperformance directly: GQG had called big technology stocks overpriced more than a year earlier, and its main global fund underperformed the broader market by around 20% during 2025 as a result, a call that has since driven clients to begin leaving and outflows to persist for six consecutive months. Perpetual's view was that asset management businesses carry largely fixed costs, meaning the profit swings, in either direction, tend to be amplified relative to the revenue change.

What managers are watching next

Views have diverged sharply on how to weigh the attractive dividend yield against the flow risk. Plato Investment Management's March 2026 Article rated the stock a hold, arguing the key question is whether performance improves enough to stabilise flows and sustain the dividend, while Paradice Investment Management's May 2026 Article echoed the key-man risk concern but held a similarly neutral view, waiting for the combination of improved performance, positive inflows and a resulting re-rating before taking a stronger position. Ellerston Capital, by contrast, ran a profitable overweight position through both November 2025 and February 2026 before taking profits in March 2026, illustrating how tradeable the stock's swings have been even amid the broader flow deterioration.