Platinum Asset Management has announced it plans to launch a Partner Series where it will partner with global institutional managers to boost their presence in the retail space.
In its FY24 results, the firm said it will offer exclusive access to top-performing global institutional managers who lack a significant wholesale/retail presence in Australia. This is part of the new growth strategy within its turnaround program, announced earlier this year.
The objective of these new relationships is to build a portfolio of subadvisory opportunities over the next three years to expand its reach and grow the business.
This will help achieve asset class diversification, add new flows, and deepen Platinum’s client relationships into complementary asset classes.
It has already secured its first fund manager relationship and is in negotiation with others, with the first fund expected to come to market in 2025. The asset class was not disclosed, but it said it is targeting both private and public markets across equity and debt.
Platinum did not expect to have equity ownership in the subadvisory partners.
In a second string, it will also add new Platinum products including an absolute return global equity hedge fund, which it is aiming at high-net-worth clients and family offices. The firm hopes to build a portfolio of new investment products over the next three years.
Expanding more on the two offerings, chief executive Jeff Peters said: “The economics of these new targeted initiatives will continue to be favourable, I would expect ones run by Platinum to have the same profile as our current funds.
“Obviously when you have a third-party manager involved, you do split fees, but these will be off attractive asset prices and there is an avoided cost of management which the other party bears.
“We believe the subadvisory Partner Series will have strong profitability, and while the fee rate will be lower in terms of what we realise, we will make that up by selling more in terms of flows and having reduced costs.”
In terms of what he believed Platinum could offer these institutional players, he said: “Platinum brings a lot to the table in terms of distribution, we have 50,000 direct shareholders, over 11,000 adviser relationships, significant brand awareness and an established retail presence which is difficult for new players to access.”
Financial performance
In terms of its financial results, the firm announced a statutory net profit after tax of $45 million, a drop of 45 per cent from FY23 when it was $80.9 million.
Funds under management were $13 billion, a decrease of 25 per cent from a year ago, and said it saw net fund outflows of $4.9 billion. These included $1.2 billion in outflows from one institutional client and $0.2 billion as a result of product rationalisation initiatives, including the closure of its Platinum World Portfolios.
Breaking it down by channel, net retail outflows rose from $1.2 billion a year ago to $2.3 billion, while net institutional ones rose from $1.1 billion to $2.5 billion.
Total revenue was $174.4 million, down from $202.6 million, with revenue entirely attributed to management fees as performance fees were nil, compared to $1.2 million in FY23. Platinum said this reflected the decrease in average funds under management.
It said it is making progress on its turnaround strategy and expects to complete a simplification of its existing product range by December 2024. This has already seen a review of the product range, closure of the Platinum Global Transition Fund, merger of two listed investment companies, termination of its Irish UCITS platform, and the closure of its Cayman funds and London office.
The business declared a final dividend of 4¢ per share, fully franked.
It also announced the appointment of Rachel Grimes, former chief financial officer at Challenger and director at platform HUB24, as a non-executive director. She will join the board on 2 September, and has 30 years’ experience in financial services.
