Pendal Group sees 91 per cent fall in performance fees
Pendal Group has reported a historic low for performance fees after the worst market returns since the September 2011 quarter caused performance fees to fall by 91 per cent.
In its half-year results for the six months to 31 March 2019, the firm, formerly known as BT Investment Management, said it saw ‘significantly lower performance fees’ during the period, falling from $47.6 million in the same period a year ago to $4.4 million.
This was attributed to volatile global markets, subdued industry flows and uncertainty surrounding Brexit in the UK. Pendal said funds investing in UK, Europe, Japan and Asia ex-Japan had particularly underperformed due to macroeconomic factors.
Pendal chief executive, Emilio Gonzalez, said: “The market returns in the December quarter were the worst on record since the September 2011 quarter, and despite a rebound in market returns in the March quarter, the volatility over the half has led to a significant increase in risk aversion from clients. Any resolution of the US/China trade talks and clarity over Brexit should see investor confidence improve.”
Cash earnings per share were 26 cents, some 27 per cent lower than the same period a year ago, and it declared an interim dividend of 20 cents per share.
Fee revenues were down 18 per cent from $296 million to $243 million while funds under management were down $0.7 billion as a result of outflows from European and Asian equities but were offset by strong inflows into cash and fixed income strategies.
There were net outflows of $1.2 billion from European equities during the period due to slow economic momentum in Europe, which contributed to total net outflows from OEIC funds of $1.7 billion. Meanwhile, fixed income saw inflows of $0.8 billion and cash saw inflows of $0.9 billion.
AUTHOR
Laura Dew
Recommended for you
Platinum Asset Management has put its two closed-end funds under strategic review in a bid to reduce the share price discount to pre-tax NTA and maximise shareholder value.
In the latest Meet the Manager profile, Money Management speaks with Michael Skinner, founder and managing director at Blackwattle Investment Partners.
Perpetual has seen AUM rise 6 per cent in the last quarter but the departure of a longstanding JOHCM fund manager led to outflows of $2.2 billion from his strategy.
Global fixed income fund Bentham Global Opportunities has been added to several major platforms, enabling it to be accessed more easily by financial advisers.
