Perpetual reports $9bn in quarterly outflows
Perpetual has seen another difficult quarter for asset management, with outflows of $8.9 billion over the three months to 30 June.
In a quarterly update, the firm said total assets under management (AUM) were $215 billion compared to $227 billion at the end of March.
“This is primarily due to the impact from negative market movements and distributions of $1.4 billion, currency movements ($2.1 billion) and net outflows of $8.9 billion.”
The fourth quarter outflows follow net outflows of $5.2 billion in the previous quarter, $4.3 billion outflows in Q2 and positive inflows of $0.1 billion in Q1.
Pendal AUM was down 8 per cent to $41 billion driven by net outflows of $3.4 billion and negative market movement of $0.1 billion. The largest outflows were seen in Pendal’s large cap, diversified and cash strategies.
Nevertheless, Perpetual said the integration of Pendal Group has “progressed well” and remains ahead of plan on its targeted $80 million synergies.
Other badly affected divisions were Trillium, where AUM was down 13.6 per cent over the quarter, and J O Hambro Capital Management which saw AUM decrease by 7.5 per cent.
Total funds under administration in wealth management was $19.8 billion, down 1 per cent on the previous quarter. This was driven by negative market movement of $0.4 billion, but partially offset by net inflows of $0.2 billion.
Chief executive and managing director, Rob Adams, said: “The June quarter showed a mixed performance across our business divisions, with corporate trust and wealth management delivering steady performance, while asset management experienced a difficult quarter impacted by net outflows, markets and currency movements.
“Our asset management business was impacted by the timing of several institutional client redemptions and short-term delays in expected new institutional inflows in specific strategies, as well as softer equity markets in Australian and global indices.
“J O Hambro, TSW and Trillium boutiques saw net outflows in global and international strategies over the period. In Australia, Pendal had a challenging quarter with outflows in cash (cyclical, low margin) and Australian equities, driven by manager rationalisation following a super fund merger and outflows from lower margin former Westpac AUM. In Barrow Hanley, while there were outflows in US equities, we had solid client interest in Barrow Hanley’s emerging markets strategies, as well as fixed income strategies.”
Earlier this year, the firm announced it had sold its corporate trust and wealth management business to private equity giant KKR for $2.1 billion, while Perpetual Limited would become a standalone asset management business. This followed a strategic review and would also see Adams step down, following a period of orderly transition upon completion.
Adams has held the role since September 2018, joining from Janus Henderson. He is also the chief executive of asset management following a company reshuffle last year, which saw its asset management businesses form one global division and create a simplified leadership structure.
AUTHOR
Laura Dew
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