AMP’s wealth management arm’s assets under management stable at $131.2bn, Perpetual’s tops $100bn

AMP’s wealth management arm’s assets under management were stable at $131.2bn at the end of September, while Perpetual’s surpassed $100bn.

Perpetual CEO Rob Adams says the business saw solid growth in the first quarter of the financial year. Picture: Supplied

AMP shares jumped 4 per cent after the financial services company reported its wealth business kept its assets under management stable over the three months to the end of September.

Its assets under management were steady at $131.2bn in the third quarter, as an uptick in investment markets offset $1.4bn in net cash outflows.

The outflows were an improvement on the $1.8bn that flowed out of the business in the prior corresponding period and included $500m in regular pension payments to clients in retirement, AMP told the market on Thursday.

Investors, unfazed by the $12bn that flowed out of its asset management business, AMP Capital, over the same period, drove the share price up 4 per cent to $1.16 in the session.

The AMP Capital outflows were largely driven by redemptions in public markets and real estate funds as well as AMP’s exit of a $9.2bn NZ wealth management mandate. Its assets under management by the end of the quarter sat at $180.3bn.

“AMP Capital’s cashflows primarily reflected the internal outflows from NZ wealth management, after the transition of the mandate to an index-based investment strategy, announced earlier this year, in line with market trends,” AMP chief executive Alexis George said.

“Our private markets teams have continued to invest on behalf of our infrastructure clients and build its pipeline of opportunities.

“We have a clear focus on our priorities ahead, including to deliver the demerger of our private markets business from AMP in the first half of next year.”

AMP Bank had a strong quarter, Ms George said, as it saw its total loan book jump by $300m to $21.3bn in the three-month period, driven by growth in residential owner-occupied loans thanks to the booming housing market.

Perpetual also had a good day, with its shares up more than 9 per cent after its assets under management pushed past the $100bn mark, with outflows in its global business putting only a mild dent in its upward trajectory.

The group revealed Thursday that its international operations had lifted funds under management to $75.5bn in the three months through to September 30, up 2.6 per cent from the end of June.

But the gains were due to a $2.9bn positive currency impact, which was partially offset by a $900m market loss and $100m in outflows.

Flows in US-based Barrow Hanley, which improved in the quarter, are now ahead of Perpetual’s forecasts, chief executive Rob Adams said.

Its other big buy, Boston-based ESG pioneer Trillium, which Perpetual acquired in mid 2020, saw $261m in next inflows and has now grown assets under management by 48 per cent since it took control of the business in July last year.

“We have had a positive start to the financial year with continued momentum across the business and all four divisions reporting solid growth to start the new financial year,” Mr Adams told investors at its annual meeting.

“Our asset management teams have delivered strong performance during the quarter, with another period of outperformance across the majority of our investment capabilities. It was pleasing to see that the combination of our Australian and International asset management businesses experienced positive net flows for the quarter.”

Alongside the lift in funds under management in its global business, the domestic operations contributed $25.5bn to the overall tally, with the gain driven by net inflows and asset growth.

“Our investment teams have delivered another quarter of standout performance, with the majority of funds producing excess returns relative to their respective benchmarks,” Mr Adams said.

“Our Australian equities funds continued to deliver strong performance over the quarter, and we have recently launched a new marketing campaign centred on our Australian equities capability, which has already seen a high level of interest from prospective investors.

“We continue to invest in new capabilities to provide new avenues for growth and we are on track to launch two active ETFs in the 2022 financial year.”

Mr Adams said the fund manager’s recent acquisitions had transformed it from an Australian-focused asset management business, with $28bn under its belt, to a $100bn manager with a global footprint, a global client base and a growth profile positioned to take advantage of ESG and value investing trends.

“During the year we made real strides in building our global distribution capability to support and drive future growth,” he said.

“Our operating model has evolved to now support a growing global business across all key functions, including our governance and risk management frameworks, which are so critical to our future success.

“Through our acquisitions we now have exposure to all key global markets, with a global presence, diversified by geography, by channel and by asset sector.”

The fund manager is now looking to build up its core business to drive growth while also looking for more bolt-ons, Mr Adams said.

“Across all divisions of Perpetual, we will continue to have an active pipeline of inorganic opportunities to add further capability and growth potential to the firm.”

Perpetual shares were up 7.8 per cent at $40.38 in a flat market on Thursday afternoon, just off its intra day high of $40.86.