Platinum to lose $580m in major client redemption
Platinum Asset Management has seen its third major client withdrawal this year, flagging a large client will redeem $580 million by November.
In an ASX statement, the firm stated a large client plans to redeem $580 million from its Platinum Trust funds as well as from a mandate between October and November.
This is the outcome of a manager review which had been commenced by the client in FY25.
The impact of this loss would be noted in the firm’s monthly funds under management during those months, it stated.
As a result, shares in Platinum have fallen 5 per cent from 0.78 cents on 1 September to 0.74 cents the following day. Shares in the asset manager are down by 24 per cent over the past 12 months compared to gains of 10 per cent by the ASX 200 over the same period.
This is the third major client withdrawal this year following an exit of an institutional mandate worth $958 million in May and a smaller one worth $360 million in the same month which led the month’s net outflows to reach $1.6 billion. This was the largest volume of monthly net outflows from the company in over a year.
Overall funds under management at Platinum have fallen from $11 billion at the start of 2025 to $7.9 billion as of the end of July.
In its full-year FY25 results, Platinum said outflows during the financial year had been $5.6 billion, divided between $3.1 billion from retail investors and $2.3 billion from institutional ones. While institutional outflows actually saw a small 5 per cent decrease from those seen in FY24, the retail ones were 33 per cent higher than the previous year when they stood at $2.3 billion.
The majority of these outflows came from its flagship Platinum International Fund, which experienced underperformance during the financial year, as well as the loss of its managers Andrew Clifford and Clay Smolinski in February. Having worked on the fund for over a decade, Clifford moved into an investment oversight role while Smolinski took a sabbatical – the portfolio management responsibilities were handed over to new hire Ted Alexander.
The change has failed to boost performance yet as over one year to 30 June, the fund has returned 3.4 per cent compared to gains of 18.4 per cent by its benchmark of the MSCI World index. Assets on this fund stand at $3.3 billion as of 30 June, down from $5.6 billion at the end of FY24.
However, chair Guy Strapp said the underperformance is not the only factor as ongoing media speculation about the firm’s future and possible takeover activity also led to outflows during the period.
“The third quarter of 2024 was dominated by inorganic activity, with the company receiving a number of unsolicited non-binding indicative offers, some of which were public and others which were not. By December 2024, none of these had eventuated but nonetheless resulted in disruption and instability for the business as things played out in the media,” he said in the results.
“This instability, combined with sustained lackluster relative investment performance for our flagship fund, only served to put further pressure on fund outflows and resulted in the loss of a large institutional mandate, with consequential impacts on revenue.”
Since the end of the financial year, Platinum has entered into a binding agreement to merge with L1 Capital and, if this goes ahead, the firm will be renamed as L1 Group. The combination of the two firms will create a manager with $16.5 billion in assets spanning listed equities and alternative strategies.
AUTHOR
Laura Dew
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