Trade war, global growth fears crimp Platinum's profit

Listed fund manager Platinum Asset Management has reported a 17 per cent fall in annual profit following what it said was a "disappointing investment performance," as the US-China trade war raged and weakening global growth prospects crimped the performance of its value stocks.

Net profit fell to $157.6 million, with revenue down more than 15 per cent to $299 million.

Platinum Asset Management's investments stumbled after founder Kerr Neilson said he would step down as the company's chief executive. Credit: Jessica Hromas

Funds under management dropped 3.6 per cent to $24.8 billion, from $25.7 billion a year earlier.

The company said in a statement after markets closed that it had experienced "challenging equity markets," with investment returns for most of its managed funds and portfolios lagging broader market returns in fiscal 2019.

"The ongoing uncertainty in relation to the US-China trade war and the bleaker prospects for future economic growth caused investors in global equity markets to remain nervous," the company said.

"Investors generally reacted to these fears by favouring companies perceived to be immune from external events, such as the US-China trade war.

"In contrast, value stocks and/or those with a degree of earnings cyclicality were avoided by the majority of investors, and those stocks generally became cheaper.

"This growing divergence between growth and perceived safety on one hand and attractive valuation on the other, led to some short-term investment underperformance for Platinum."

Platinum's results are in marked contrast to rival fund manager Magellan Financial Group, which earlier this month reported a 35 per cent jump in net profit after tax to $364.2 million.

The company will pay a fully franked dividend of 14 cents a share September 20.

Founded 25 years ago by stock picker Kerr Neilson, who's been dubbed "Australia's Warren Buffett" for his investment prowess, Platinum's value has more than halved since its shares peaked in February 2018, as its investments stumbled and Mr Neilson said he would step down as the fund's chief executive.

In March, Mr Neilson and former wife Judith Neilson sold about 10 per cent of the fund manager for about $300 million. After the sale, Mr Neilson retained about 126 million shares.

The company's shares closed flat at $4.28.