Platinum forecasts $1.2bn in redemptions
Platinum Asset Management has reported its latest funds under management (FUM) figures with more outflows forecast to occur in April.
In an ASX update, the firm said FUM during March was $15.5 billion, down from $15.6 billion at the end of February. Total FUM a year ago was $18.6 billion.
The firm said it experienced outflows of $527 million during the month which included outflows of $467 million from the Platinum Trust Funds. This compared to $285 million in outflows experienced in February.
“These outflows reflect approximately $200 million of the $1.4 billion of expected outflows announced by Platinum to the ASX on 26 March 2024, with the balance of these outflows expected to occur during April 2024.”
Earlier this year, the firm announced it has embarked on a two-stage turnaround process to address declining revenue and net outflows.
A short-term phase over the next one to four months – a reset phase – will include alignment of its expense base to current revenue conditions, review of product offering, renewal of client communication strategy, deep examination of its investment platform and review remuneration framework.
A second phase over the next six months – a growth phase – will implement recommendations, build improved product and distribution capabilities through new channels, explore inorganic and organic growth opportunities for diversification and complete back-office outsourcing projects.
It has since updated that FUM is expected to reduce by $0.2 billion as a result of the initiatives. It expects to see partial redemptions of at least $1.4 billion from its institutional and wholesale business which will impact FUM and revenue.
“Platinum expects to receive partial redemptions of at least $1.4 billion from its institutional and wholesale business over the coming month with one large client indicating that it intends to rebalance its exposure away from benchmark agnostic global equity managers.
“As such, we do not expect the account to close but rather to see a reduction in mandate size. These events, together with some other institutional account changes anticipated to take place over the coming months, are likely to result in a reduction in annualised fee revenue for the company of approximately $18 million per annum.”
In its half-year financial results for the six months to 31 December, it reported a 10.8 per cent decline in FUM from 30 June 2023. The FUM decline was driven by net outflows of $1.8 billion and negative investment returns of $0.1 billion during the six months.
In the past year, the firm made a series of people changes to its board and leadership team, including co-founder Andrew Clifford stepping back as chief executive after five years and also from the board, although he remains at the firm as co-chief investment officer. Directors Elizabeth Norman and Andrew Stannard also stepped down from the board at the end of 2023.
Instead, Platinum has appointed Jeff Peters from the US after a global search to take up the chief executive position; he began the role earlier this year. Peters previously led the institutional and international businesses at Columbia Threadneedle and Putnam Investments.
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Laura Dew
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