Rival managers eye Platinum Asset Management bid

Regal Partners’ recent bid to acquire Platinum Asset Management has seemingly fuelled renewed attention for the troubled asset manager, which has been grappling with net outflows and a falling share price.

Geoff Wilson, chairman and chief investment officer at Wilson Asset Management, told Money Management’s sister brand InvestorDaily the firm is also considering Platinum as a potential acquisition.

“It’s an interesting play and we’re assessing it,” he said. “We haven’t said that we’re going to bid, we haven’t announced a bid, we haven’t said we’re not going to bid. But to me, it’s an interesting play.”

The firm is no stranger to M&A activity, having acquired QVE Equities in the first half of 2024 by way of a scheme of arrangement. Over the last decade, it has also undertaken over a dozen takeovers, primarily of listed investment companies, boosting its funds under management to $5.5 billion.

Wilson’s interest, which was first reported by Capital Brief, comes after Platinum confirmed an unsolicited confidential, non-binding, indicative proposal from Regal to acquire all of the shares in Platinum it does not already own via a scheme of arrangement.

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Regal has had a 5.5 per cent stake in Platinum since 2022, which it acquired via a number of smaller acquisitions over a period of a few months.

In an ASX announcement, Platinum said it is “considering the merits” of the proposal, while analysts describe it as an “opportunistic” bid against the backdrop of the manager’s troubles.

Capital Brief also reported that Challenger Group could be interested in the fund manager. However, responding to InvestorDaily’s request for comment, Challenger said that as a listed stock, “we don't comment on market speculation".

Number of interested parties to emerge

Morningstar equity analyst Shaun Ler believes Platinum’s “attractive” price point will likely see a number of interested parties emerge.

Platinum’s share price has seen a nearly 20 per cent dip in the last 12 months, standing at around $1.07 as at 21 September 2024. Over the last five years, the stock has plunged more than 70 per cent.

“If you look at the share price, it has been declining, and apart from that, they are getting outflows,” Ler told sister brand InvestorDaily.

However, Platinum maintains “a certain brand name”, he said, and has established distribution channels across various platforms.

“They still have some good traits. Some of Platinum’s client base tend to be stickier, and they are getting outflows, but a lot are from the financial adviser channel. They’ve got a loyal retail client base,” he said.

“On top of that, the retail management fees are quite a higher margin than institutional fee margin, so it is a more lucrative business.

“There’s still some intrinsic value over there. I think many players would be looking at buying them at an opportunistic price.”

At the start of the year, Platinum welcomed a new chief executive, Jeff Peters, and announced an “urgent” two-part growth and reset strategy. Since then, it has launched a review of its product range, closed the Platinum Global Transition Fund, and its Cayman funds and London office.

In its latest results for the financial year 2024, it reported net profit after tax fell from $80.9 million in FY23 to $45 million, while funds under management slipped 25 per cent to $13 billion.

The asset manager also reported net fund outflows of $4.9 billion for FY24.