Pendal’s FUM hit by falling prices

Oksana Patron

20 October 2022

Falling asset prices and fund outflows in the US have seen Pendal’s funds under management (FUM) drop to $104.5 billion for the September quarter from $111 billion at the end of June.

Australia saw net outflows of $0.3 billion, excluding cash, during the quarter which included the sale of Westpac’s life insurance business in August 2022.

In the announcement made to the Australian Securities Exchange (ASX) the firm said that FUM was substantially retained with TAL Life Insurance Services via a new fixed income mandate and, on a positive note, there were flows across most asset classes in the wholesale channel.

The total Australia FUM dropped from $29.6 billion at the end of June to $28.5 billion in the September quarter.

By comparison, the group’s total FUM in the US, excluding cash, went down to $45.9 billion in the September quarter from $50.3 billion at the end of June.

Pendal explained that in the US, outflows of $2.1 billion were primarily in the US Pooled Fund which saw $1.5 billion in net redemptions as clients continued to reduce their exposure to growth-oriented international equities.

The EUKA region (Europe, UK and Asia) saw net inflows of $1.4 billion for the quarter to $20.6 billion helped by an investment from a UK institutional client in the Global Opportunities strategy.

“Pendal’s FUM for the September quarter was negatively impacted by falling asset prices and fund outflows in the US. However, this was offset by net inflows from the EUKA region and the stronger US dollar, which helped deliver a favourable currency uplift of $2 billion,” Pendal Group’s chief executive, Nick Good, said.

He stressed that the September quarter saw a continuation of strong volatility fueled by rising energy prices and concerns about potential inflation induced recession.

“In addition, ongoing political uncertainty led to the lowering of global growth expectations. As a result, the MSCI All Countries World Index (local currency) declined by approximately 5% over the quarter.”