Platinum starts CEO search after pressure from Kerr Neilson

Platinum CEO and co-founder Andrew Clifford has bowed to pressure from the fund manager’s biggest shareholder, announcing his intention to step down from the top job.

Platinum Asset Management CEO and co-founder Andrew Clifford has bowed to pressure from the fund manager’s biggest shareholder, announcing his intention to step down from the role he has held since 2018.

In an ASX announcement, the company said Mr Clifford will step aside as managing director and chief executive while maintaining the role of co-chief investment officer. Mr Clifford has held the role of CEO and co-CIO since his appointment five years ago.

It comes after a push by Platinum’s billionaire co-founder and biggest shareholder, Kerr Neilson, earlier this year for Mr Clifford to step down as the fund manager’s chief executive.

Mr Neilson said in February that “commingled roles” such as that held by Platinum’s chief executive “don’t get enough critical assessment of the team and its behaviour”.

Mr Neilson said he had been “agitating for (the move) for a long time”.

It came as Platinum reported a 20 per cent year fall in its net profit after tax for the year to June 30 to $80.85m.

Revenue declined 6.8 per cent to $217.4m.

Funds under management fell 4.9 per cent to $17.3bn, an amount that was reduced by an annual net distribution outflow of $400m.

Its average FUM of $18.1bn for the financial year compared to $21.4bn the previous year.

The change in closing FUM was driven by positive investment returns of $2bn, net fund outflows of $2.4bn and the June 39 net distribution.

Staff costs rose by $16.6m, primarily due to higher variable compensation expenses as a result of the strong weighted average investment performance for the one and three-year periods to March 31.

Platinum’s share price has fallen from about $9 to $1.61 since they listed in 2008, as an underwhelming performance from its flagship International Fund weighed on performance fees, funds under management and profits.

Mr Neilson said in February that Platinum should either split the chief executive and chief investment officer roles to sharpen team oversight, build trust and to encourage younger talent, or risk being swept up into the consolidation playing out in the funds management industry.

Mr Clifford said Platinum’s business has developed substantially since its beginnings nearly 30 years ago and now needed a greater focus on the strategic direction of the business.

“I have made the decision to step aside from the role of managing director and CEO, allowing me to fully concentrate on the positions of co-chief investment officer and co-portfolio manager of our Global and Asia strategies,” Mr Clifford told the stock exchange.

“I very much look forward to continuing to provide strong absolute returns for our clients. I thank our shareholders for their support throughout my time as CEO.”

Mr Clifford has committed to holding the chief executive role on an interim basis until his successor is appointed, working closely with the board to ensure a smooth transition.

Platinum chair Guy Strapp said Mr Clifford would “continue to play an integral part in delivering strong absolute returns for our clients.”

Mr Neilson owned a 21.4 per cent stake in Platinum shares, worth almost $200m. Mr Clifford has a 5.6 per cent stake.

Platinum shares closed flat at $1.615. The company declared a flat final fully-franked dividend of 7c, payable on September 15.