Platinum CEO shares first turnaround progress update

Platinum Platinum Asset Management ceo strategy Andrew Clifford

18 April 2024
| By Laura Dew |
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Platinum Asset Management chief executive, Jeff Peters, has shared a progress update on its newly announced turnaround strategy.

Peters joined the asset manager earlier this year from a role in the US, having previously worked as managing director and head of global institutional business at Columbia Threadneedle.

An urgent two-part “growth and reset” turnaround strategy was shortly announced following his arrival which will focus on improving its fee revenue and funds management.

A short-term phase over one to four months – a reset phase – will include alignment of its expense base to current revenue conditions, review of product offering, renewal of client communication strategy, deep examination of its investment platform and review remuneration framework.

A second phase over the next six months – a growth phase – will implement recommendations, build improved product and distribution capabilities through new channels, explore inorganic and organic growth opportunities for diversification and complete back-office outsourcing projects.

In a shareholder letter, Peters said the strategy will cover:

  • A reorganisation of the research function within the investment team to improve its effectiveness.
  • A review of how it constructs each portfolio of stocks.
  • A review of how it approaches risk management processes, including shorting and cash positions.
  • An examination of existing product line features.

It has already completed a reorganisation of its investment team and has identified opportunities to enhance its risk management tools. 

Its investment philosophy of looking for mispriced opportunities will remain unchanged, and Peters said the skill of the investment team in stock selection “remains strong”.

“The broader market positioning of this last cycle with historically high concentrations in mega-cap stocks has overshadowed this, but we remain confident in our ability to rebound as markets move back to a more typical pattern.

“We will also continue to renew our client communication with a focus on explaining the reasons behind our investment positioning and our ability to meet client needs.”

Earlier this month, it announced FUM was $15.5 billion compared to $18.6 billion a year ago and it expects a further $1.2 billion in redemptions from its institutional and wholesale business which will cause a reduction in mandate size.

“Platinum expects to receive partial redemptions of at least $1.4 billion from its institutional and wholesale business over the coming month with one large client indicating that it intends to rebalance its exposure away from benchmark agnostic global equity managers.

“As such, we do not expect the account to close but rather to see a reduction in mandate size. These events, together with some other institutional account changes anticipated to take place over the coming months, are likely to result in a reduction in annualised fee revenue for the company of approximately $18 million per annum.”

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