Platinum Asset Management’s takeover appeal clouded by funds hit
Hefty fund outflows have cast doubt on whether takeover target Platinum Asset Management will attract a binding bid before the year’s end.
Takeover target Platinum Asset Management suffered net outflows of $841m in November, casting doubt on whether the company will attract a binding bid before the year’s end.
In a sign of further weakness at the funds management firm, Platinum’s ASX statement said outflows reflected the loss of an institutional mandate worth $537m and net outflows of $239m from the Platinum Trust Funds.
The November outflows saw funds under management slide to $10.96bn from $12.2bn the prior month.
The continuation of outflows doesn’t bode well for the company attracting a compelling takeover offer.
Phil King’s Regal Partners lobbed a share-based offer at an implied value of $1.10 per Platinum share in September and is in the throes of deciding whether to improve that or walk away. Geoff Wilson’s firm Wilson Asset Management is working with Macquarie Capital on a potential tilt, while the David Paradice-led Paradice Investment Management has Morgan Stanley helping it run bid numbers.
The November outflows are an acceleration of the soft result in the prior month. Sources have said an entity associated with Allan Gray was partially behind the $416m in net outflows from Platinum in October.
Fund outflows have plagued Platinum over the past two years and culminated in a string of personnel changes, including the appointment of asset management stalwart Jeff Peters as chief executive. He took the reins early this year and has outlined a turnaround strategy which includes plans to stabilise Platinum by stemming outflows, rationalising products and boosting performance.
Fund managers both in Australia and offshore are being hit by a spate of factors including persistent downward pressure on fees, a shift to cheaper passive investment styles and mergers between their larger customers.
Any deal for Platinum is further complicated by those vying for the company having to court billionaire and co-founder of the firm Kerr Neilson, the fund manager’s largest shareholder who owns close to 22 per cent of Platinum.
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