Platinum Asset Management CEO Jeff Peters unveils cost-cutting, growth plan after slump

Platinum Asset Management’s newly appointed chief executive Jeff Peters has flagged ‘immediate’ cost cuts in a plan to reignite growth after years of declining assets and share price.

Platinum CEO Jeff Peters has outlined a turnaround plan for the fund manager. Picture: Adam Yip

Platinum Asset Management’s newly appointed chief executive Jeff Peters has unveiled a turnaround plan for the fund manager meant to reignite growth after years of declining assets and share price.

“It has been a difficult year so far at Platinum,” said Mr Peters, who last December was appointed to replace Andrew Clifford as CEO. “We have seen net outflows, declines in revenue and our investment performance is not where we would like it to be for our clients.”

The initial phase of the turnaround plan, spanning the next one to four months, will focus on “immediate” cost reductions and a strategic review to “align” expenses with current revenue conditions.

The review will include existing products, distribution channels, re-evaluating client communication strategies, and assessing the investment research, portfolio construction, and risk management functions of its platform.

The “growth” phase, planned for the next six months onwards, will then see the implementation of recommendations to enhance the investment platform.

It would build product and distribution capabilities through new channels, and explore organic and inorganic growth opportunities, the company said. It will also review its remuneration framework.

With extensive experience in asset management, the Harvard-educated Mr Peters expressed confidence in the manager’s ability to regain its footing.

“The reasons I joined Platinum – the brand, the talent of our investment and senior teams, the legacy of success here in Australia – these things are all still here,” he said in a statement to the ASX.

“We must capitalise on them and improve where we can, and then we will be well on the way to revitalising Platinum for our clients and our shareholders.

The comprehensive turnaround plan has been approved by the board of directors, and the company plans to brief investors and analysts on it on Friday morning.

Earlier on Thursday afternoon after the market closed, the asset manager reported a 5 per cent fall in net income to $35.6m and a reduction in its interim dividend to 6c per share, down from 7c per share a year earlier.

Platinum shares have lost close to half of their market value in the past year. They closed flat at $1.03 each on Thursday.

Platinum, like many other fund managers, is under pressure to lower fees for clients, as cheaper passive managers – particularly those structured as ETFs – lure investors away.

Superannuation funds, which used to be key clients of the industry, are increasingly taking back control of their assets and pulling their investment mandates in favour of bringing asset management in-house.

Perpetual, Magellan Asset Management, Janus Henderson and Insignia Financial are examples of firms that are also struggling with outflows in recent times. “I recognise that the market and competitive environments are difficult and that this affects us, our clients and our peers,” Mr Peters said.

“Change is necessary and, whilst we have a full agenda, I am confident we can get it done.”