Here's why the Genworth (ASX:GMA) share price is rocketing 8%

Is this a vote of confidence in the company?

| More on:
A woman and her umbrella are blown away by the force of a rocket.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Key points

  • Genworth announces an alternative investment manager has taken a minority stake in its share registry
  • Ares Management Corporation has taken a punt on Genworth, a move the company notes is a vote of confidence 
  • In the past 12 months the Genworth share price has climbed 4%

Shares in Genworth Mortgage Insurance Australia Ltd (ASX: GMA) are jumping into the green today. At the time of writing the Genworth share price is $2.86, up 8.33%.

Genworth climbed as high as $2.92 in early morning trading before retracing to its current level.

Investors are responding to a company announcement that alternative investment manager Ares Management Corp has taken a stake in the company.

Why are Genworth shares spiking today?

Genworth confirmed today it was made aware that alternative investment manager Ares Management has acquired a minority stake.

Ares is an alternatives giant and has its tentacles wrapped around credit, private equity, real estate, and other secondary markets. Since its inception in 1997, Ares has grown its assets under management (AUM) substantially.

The fact Ares has taken a spot in the front row of Genworth's equity show is no minor news. The United States-based fund manager became public in 2014. In 2018 it became a body corporate, the first alternative asset manager to do so.

With Ares on its register, Genworth has the full force of US$295 billion in AUM behind it, via the fund manager's book. It remains to be seen if Ares aims to take a more active role in the company.

And best believe Genworth acknowledges the investment as a vote of confidence in the company's growth narrative.

"Genworth welcomes this investment by Ares in the Company as an indication of the value it sees in Genworth's business," the release noted.

Back in January, the company's share price popped after announcing it was selected as the exclusive provider of lenders mortgage insurance (LMI) to the Commonwealth Bank of Australia. Specifically, for the big bank's CBA and Residential Mortgage Group (RMG) businesses.

Genworth will announce its financial results for the full year ending 31 December 2021 on 25 February, per today's release.

Genworth share price snapshot

In the past 12 months the Genworth share price has climbed just 4%. Although it has jumped more than 23% this year to date.

Over the last month of trading, shares have gained 18% and are now front-running the major indices since 4 January.

TradingView Chart

Motley Fool contributor Zach Bristow has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Share Gainers

Person pointing at an increasing blue graph which represents a rising share price.
Share Gainers

Why Liberty, Lovisa, Novonix, and SG Fleet shares are storming higher today

These shares are starting the week strongly. But why? Let's find out.

Read more »

Young girl drinking milk showing off muscles.
Share Gainers

Here are the top 10 ASX 200 shares today

It was a great end to the trading week for ASX investors today.

Read more »

A man sits thoughtfully on the couch with a laptop on his lap.
Share Gainers

3 ASX 200 stocks smashing the benchmark this week

These three ASX 200 stocks are leading the charge this week. Here’s how.

Read more »

A young woman holding her phone smiles broadly and looks excited, after receiving good news.
Share Gainers

Why A2 Milk, EOS, GQG, and Mineral Resources shares are racing higher today

These shares are ending the week strongly. But why?

Read more »

A man wearing a red jacket and mountain hiking clothes stands at the top of a mountain peak and looks out over countless mountain ranges.
Share Gainers

Here are the top 10 ASX 200 shares today

It was another disappointing day for ASX investors this Thursday.

Read more »

two men smiling with a laptop in front of them, symbolising a rising share price.
Share Gainers

Why Pinnacle, PWR, Race Oncology, and Vulcan shares are flying today

These shares are having a good session on Thursday. But why?

Read more »

A beautiful woman holds up one finger with one hand and has her hand on her waist with the other as she smiles widely as though she is very pleased about something.
Share Gainers

Why Boss Energy, Emeco, Mineral Resources, and Plenti shares are pushing higher today

These shares are having a good time on hump day. But why?

Read more »

Three small children reach up to hold a toy rocket high above their heads in a green field with a blue sky above them.
Share Gainers

3 ASX 300 shares going gangbusters on Wednesday

Investors are bidding up these three ASX 300 shares today. But why?

Read more »