Perpetual motions new strategy

PerpetualTrustees Australia had the best of both worlds last week after its annual results were warmly received by the market. The investment group was able to satisfy ever-hungry investors with a special $2 dividend while at the same time playing its cards close to its chest as to its ongoing strategy.

Perpetual chief executive David Deverall said the group was looking to concentrate on the investment and advice ends of the value-chain, with a reduced focus on administration.

However, there was limited information beyond noting the group was seeking to expand into other investment areas to reduce its reliance on Australian equities (65 per cent of its existing business book).

Although Deverall did hint the group’s funds management arm may consider developing an in-house international equities division by building its own manufacturing capabilities in place of its existing relationship with US-based Fidelity Investments.

“There is a very large market in the global equity space, [so] it’s a very important and strategic question to get right. I’ve asked my team to come back to me with an assessment as to what our potential response might be,” Deverall said.

However, he added that the review may in fact result in Perpetual consolidating its alliance with Fidelity. Perpetual sources $2.5 billion to Fidelity for it to invest in global equities.

Deverall, speaking after announcing a 16 per cent rise in net profit for 2004 of $90.4 million, said the group had also developed a new three pronged strategy.

These strategies are to develop a more balanced portfolio, create new sources of growth for the group and to fully engage its team to deliver on the strategy.

Deverall stressed that Perpetual’s WealthFocus platform will remain integral to the business, although elements of its administration will be outsourced.

“WealthFocus is an important product for us in terms of defending and potentially growing our retail funds under management. [However] there are components of the product offering that we are actively looking to [outsource],” he said.