Platinum brand in doubt as binding terms signed with L1 Capital
Platinum Asset Management has entered into binding terms for a merger with L1 Capital, with the firm to be renamed upon completion.
The firm said this will create a “market-leading provider of listed and alternative investment strategies” with funds under management of $16.5 billion.
Subject to shareholder approval, Platinum will acquire 100 per cent of the issued share capital of L1 Capital in consideration for the issue of new Platinum ordinary shares to existing L1 shareholders. Following its completion, L1 Capital shareholders will hold 74 per cent of the issued capital in the merged group, while Platinum ones will hold 26 per cent.
Upon completion, the combined firm will temporarily be known as MergeCo and renamed in due course, however, individual existing funds will retain their branding of both firms. No decision has been made yet over whether the Platinum will be retained in the new name.
Jeff Peters will continue as the chief executive of MergeCo, Andrew Stannard will be the chief financial officer, and Joel Arber will be the chief operating officer. Its board will have seven directors, although L1 Capital founders Mark Landau and Raphael Lamm will have investment-focused roles rather than board positions.
As well as Peters and Arber, the board of MergeCo will include Platinum chair Guy Strapp, independent non-executive director Rachel Grimes, executive director Jane Stewart, and two L1 Capital non-executive directors.
Platinum said the deal is expected to achieve pro forma $20 million in annual pre-tax cost synergies and be double-digit earnings accretive in the 12 months following completion.
The benefits from the deal include:
- Exposure to a scalable, growing, and well-diversified platform of alternative investment strategies which are expected to significantly increase and diversify assets under management.
- Combining the deep expertise, investment experience, industry networks, and established track records of talented investment management teams.
- Leveraging complementary client relationships across the merged group, including existing long-term relationships with institutional, wholesale, high-net-worth, and retail investors in Australia and globally.
- Unlocking the potential of combined distribution capabilities.
In a change to his remuneration, Peters will receive $670,000 as an “additional work effort payment” for his work on the deal which is not conditional on the merger reaching completion.
Strapp said: “The Platinum board is unanimous in its view that this transaction is in the best interests of shareholders. After careful consideration, we believe the combination with L1 Capital provides a catalyst to deliver strong outcomes for shareholders and investors, creating a high-quality manager with a strong heritage, world-class investment talent and scale.”
Lamm said: “Mark [Landau] and I are both very committed to the future success of the combined business. We believe the combination of L1 Capital and Platinum will create one of Australia’s leading global investment firms, with a performance culture and extreme alignment with our investors.
“At L1 Capital, we have several top-performing funds that have delivered strong returns and exceptional downside protection, which we think will resonate well with Platinum’s client base.”
A general meeting will be held in September 2025 to approve the merger.
Separately, the firm said net outflows during June were $428 million with this almost entirely coming from the Platinum Trust funds.
This brings total funds under management to $8 billion and means the firm has lost $5 billion during the FY25 financial year, having started the year at $13 billion.
However, June’s outflows are far smaller than the volume of outflows experienced in May when the termination of an institutional mandate saw outflows stand at $1.6 billion. This consisted of $958 million from the mandate, institutional redemptions of $360 million and outflows from the Platinum Trust funds of $293 million.
The firm will pay distribution (net of reinvestment) of $151 million in July but did not generate any performance fees for the second half of FY25.
AUTHOR
Laura Dew
Recommended for you
Evidentia Group has announced the appointment of a chief risk and operating officer, rounding out its executive leadership team after a slew of hires last month.
Family office Lederer Group has progressed its takeover bid for the Elanor Commercial Property Fund, lodging a bidder’s statement with ASIC as it says the fund has been “unable to agree” on negotiation terms.
Magellan Financial Group is keen to enact further strategic expansions with income from strategic partnerships tripling to $31.1 million from the addition of Vinva during FY25.
Outflows have doubled in the property and infrastructure space to $1.3 billion with advisers instead favouring private markets as Morningstar data finds active property funds are struggling to outperform.
