Perpetual reshaped with strategic review outcome, Adams to retire

Perpetual is to become solely focused on asset management and chief executive Rob Adams will retire as the firm announces the outcome of a six-month strategic review.

In December, the firm announced it would embark on a strategic review of its corporate trust and wealth management businesses. Since then, it has stated it is in exclusive talks with private equity firm Kohlberg Kravis Roberts & Co (KKR) regarding the sale of the two entities.

This has already resulted in the decision to combine the Perpetual and Pendal multi-asset businesses to create one team, the Perpetual Multi Asset Strategies team. The new team is led by Perpetual’s current head of multi-asset, Michael O’Dea, and marks the departure of Michael Blayney as the portfolio manager of these funds.

In an outcome announced to the ASX on 8 May, the firm said it has entered into a scheme of arrangement where KKR will buy its corporate trust and wealth management businesses for $2.1 billion. Perpetual will provide transitional services to KKR for 18 months post completion with the option to extend for a further 12 months and after that date, the corporate trust and wealth management businesses will operate as standalone, independent businesses.

“Following a comprehensive process, the board has determined that becoming a pure-play global asset management business through a demerger, combined with the separation of the wealth management and corporate trust businesses, will provide superior value for shareholders.

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“The Perpetual board agrees that a transaction with KKR represents compelling value for shareholders and is equally a strong outcome for employees, clients and other stakeholders.”

The sale is subject to a Perpetual shareholder vote and the board unanimously recommends this in the absence of a superior proposal. Shareholders are expected to receive cash proceeds and will retain their ownership in the firm under its new structure as an asset manager with $227 billion in assets under management.

If approved, the transaction is expected to complete in February 2025.

Ownership of the Perpetual brand will transfer to KKR as part of the transaction and a licensing agreement will be in place for Perpetual's Australian equities team to allow them to continue to use the brand for up to seven years. The brand will sit alongside its other multi-boutique asset management brands including Pendal, Trillium and Barrow Hanley.

Perpetual, as in the ASX-listed entity, will be rebranded with a new name with the rebrand to occur by 31 December 2025. The Perpetual name has been in place since the company's foundation in 1886. 

Perpetual is expected to use the proceeds from the sale to pay debt and tax.

People moves

The firm also announced group chief executive and managing director Rob Adams is to retire 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.

Gregory Cooper, currently a non-executive director, has been appointed as deputy chair to assist the board with the asset management business and will chair a subcommittee to recruit a new CEO. A global search has begun for this already, the firm said.

Adams said: “I believe that it is an appropriate time for fresh leadership and renewed focus on driving that growth over time. Our asset management business has world-class portfolio managers, diverse capabilities and a global distribution reach. I am confident that this combination will deliver positive outcomes for our clients and shareholders over time, benefiting from the focus and balance sheet strength that will result from this transaction.”