Allfunds Group Plc : Business model facing uphill battle amid passive investments revolution

Allfunds’ active fund distribution model is facing growing pressure from the rise of passive investments and private capital. While the company is diversifying into alternatives and active ETF distribution, these efforts are not game-changers and are unlikely to lead to a materially improved outlook in terms of AuA growth. With structural risks in the core business and lack of strong organic growth, we downgrade the stock to Underperform.