Platinum outflows jump over 120% as co-CIOs step back
Outflows from Platinum Asset Management jumped from $160 million to $358 million in February as the firm announced its co-chief investment officers will step back from their roles.
In its monthly funds under management (FUM) update, the Australian-based investment manager said it saw its FUM decrease from $10.99 billion in January to $10.76 billion in February.
Platinum experienced net outflows of approximately $358 million during the month, which included outflows of $322 million from the Platinum Trust Funds.
February’s net outflows more than doubled from January, when Platinum reported its lowest outflows in 18 months at $160 million.
The investment manager announced last month its co-chief investment officers Andrew Clifford and Clay Smolinski would step down from their roles, effective 3 March.
Clifford, who had worked at Platinum for 31 years and was CEO for a period, stepped down from the CIO role and management of the flagship Platinum International Fund. Similarly, Smolinski, while technically on a leave of absence for a period of six months, stepped down as CIO and his duties as portfolio manager of the flagship fund.
While Clifford has assumed an investment mentorship role at the firm, Smolinski is yet to determine whether he will return to an alternative role within the investment team.
The firm is currently without a CIO as it did not formally name a replacement. However, last month it announced long-short global equity manager, Ted Alexander, would run the Platinum International Fund and its other global strategies.
Following this major shake-up, Morningstar said the exits of Clifford and Smolinski meant redemption risks would rise, given the longstanding tenure and brand recognition of the pair.
Platinum’s FUM was projected to decline from $13 billion to $3 billion by FY29, driven by outflows averaging 33 per cent of FUM per annum.
“Clifford and Smolinski’s departures may see outflows given their long tenures. While there’s a successor, Ted Alexander, team stability and redemption risks have risen. We note investors’ confidence in Platinum was largely underpinned by the former two,” Morningstar equity analyst Shaun Ler said.
“There is potential for client redemptions. It is likely to take time for investors to gain confidence in Alexander. There may also be concerns about ongoing cost reductions and restructuring – including headcount reductions – across the broader group, which could impact research capabilities.”
Money Management reached out to Platinum, but the firm declined to comment on whether February’s outflows could be tied to the departure of the pair.
AUTHOR
Jasmine Siljic
Recommended for you
Bell Financial Group has appointed a chief investment officer who joins the firm from Clime Investment Management.
Private markets funds with “unattractive practices” could find themselves facing enforcement activity with ASIC chair Joe Longo stating he cannot rule it out in the future.
Despite ASIC concerns about private credit funds being accessed via the advised channel, there are questions regarding how high its usage actually is among financial advisers.
Challenger has looked to the superannuation industry for its appointment of a group chief investment officer, a newly-created role.
