Platinum NPAT halves amid $1.6bn retail outflows
Platinum Asset Management has seen its profits halve in the first half of FY25 to $15.9 million as it announces a major investment team shake-up.
Funds under management (FUM) were $11.1 billion, down from $13 billion at the start of the half, and the firm attributed the decrease to net outflows of $2.5 billion and positive investment returns of $589 million.
While outflows were heavy during the 2024 calendar year, Platinum said they had moderated during the six-month period thanks to improved fund performance, albeit primarily in the institutional space.
Institutional outflows slowed from $940 million a year ago to $821 million, but retail ones grew from $813 million to $1.6 billion, which the firm acknowledged had been affected by Regal Partners’ bid for the company.
“Retail outflows increase includes some one-offs following Regal Partners non-binding indicative offer but mostly reflective of challenged investment performance relative to the index,” it said.
Statutory net profit after tax (NPAT) was $15.9 million, down from $35.6 million a year ago, with this attributed to a $23 million decrease in management fees due to the lower volume of FUM. NPAT had also been affected by implementation costs associated with the turnaround.
The firm said it is on track to deliver $25 million in target expense reductions in light of the growth and reset strategy.
It is also scheduled to launch a global equity small-cap offering in April managed by US-based business, GW&K Investment Management, the first under its Platinum Partner series, which was unveiled last year.
This will see Platinum offer exclusive access to top-performing global institutional managers that lack a significant wholesale/retail presence in Australia. The objective of these new relationships is to build a portfolio of sub-advisory opportunities over the next three years to expand its reach and grow the business.
Boston-based GW&K has over US$52 billion in assets under management and specialises in US and global small-cap equities as well as municipal bonds.
An internally managed long-short global equity strategy known as Arrow Trust is also targeting an external launch in the second quarter of 2025 with a target market of institutional clients and high-net-worth mandates. This will target an absolute return of cash +5 per cent with low correlation to global equity markets.
In a statement, the firm said: “The turnaround at Platinum is progressing, with refreshed leadership and new product offerings focused on enhancing investment performance and expanding access to innovative opportunities for our clients.
“While there is still progress to be made, these developments mark a positive step forward, laying solid foundations for the next phase of growth.”
It also announced people moves with Andrew Clifford and Clay Smolinski both stepping back from their co-chief investment officer and portfolio manager positions. This is part of a plan to “revitalise” the flagship Platinum International Fund and Ted Alexander has joined the firm to take over its management.
AUTHOR
Laura Dew
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