Perpetual looks beyond value investing

Perpetual Limited, which posted today a 12 per cent drop in its net profit after tax for 1H 19, has said it is open to expanding its focus beyond value investing and to consider adding new investment styles, including a boutique-like team management approach.

The announcement came after the firm said that its business was challenged by market uncertainty and the outcomes of the Royal Commission, on top of outflows experienced in the second half of 2018.

As a result, net profit after tax slipped to $60.2 million and was driven down by a combination of lower performance fees, net outflows and change in accounting treatment of unrealised gains and losses.

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At the same time, revenues fell by five per cent compared to 1H18 and stood at $252.3 million. The board declared a fully franked interim dividend of 125 cents per share, which represented a seven per cent fall compared to 1H18.

Perpetual’s chief executive, Rob Adams, said the headwinds in the first half of the year forced the business to “broaden its thinking and approach” regarding its growth strategy.

“To grow, we need to change,” he said.

“During a period of regulatory and industry change, we remain responsive to evolving client needs. We will be delivering new investment vehicles to market and actively pursuing organic and inorganic growth opportunities including looking to invest in new asset management capabilities.”

“We will manage our investment teams in a boutique-like manner and will consider adding new investment styles and asset classes to this structure over time.”

Profit before tax (PBT) was lower for both Perpetual Investments and Perpetual Private which saw a 20 per cent and two per cent fall year-on-year, respectively.

At the same time, perpetual Corporate Trust saw PBT higher by 13 per cent ($22.4 million) compared to 1H18 thanks to its market activity within commercial property and managed investment funds.

 




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