Perpetual posts $1.2bn in net outflows

Oksana Patron

23 January 2023

Perpetual reported net outflows of $1.2 billion in the December quarter due to a struggling US equities segment and despite a rebound in equities markets.

The manager said that despite a tough operating environment in 2022 for asset manager it managed to end the Q4 in a strong position with total assets under management (AUM) at $93.7 billion, 4% higher than the prior period, thanks to positive market movements which were partially offset by negative currency movements and outflows.

Perpetual blamed tough conditions and industry trends in the US for the outflows in its American business as clients were allocating away from domestic equities due to the Federal Reserve’s tightening cycle.

Perpetual’s Barrow Henley experienced net outflows of $2.6 billion in its US equities strategies and was impacted particularly by a single client loss of $1.8 billion.

“Despite these outflows, relative investment performance across Barrow Hanley funds continues to be very strong and in December, Barrow Hanley recorded its strongest month of net inflows since Perpetual acquired Barrow Hanley in November 2020,” the firm said in the announcement made to the Australian Securities Exchange (ASX).

The manager also reported that across its Australian arm, Perpetual Asset Management Australia’s (PAMA’s) AUM increased 4% on the prior quarter to $22.1 billion at the end of December thanks to favourable market movements but were partially offset by net outflows predominantly from the institutional channel

At the same time, Perpetual Private’s total funds under advice (FUA) stood at $17.9 billion, and were up $0.7 billion compared to the September quarter.

Based on preliminary unaudited financials for the half year ending 31 December 2022, the company said it expected its underlying profit after tax for 1H23 to be in the range of $65 million to $70 million.

Significant items relating to transaction costs for the Pendal acquisition would be expected to sit between $25.5 million to $27.5 million pre-tax for 1H23 and these costs were part of Perpetual’s estimated transactions costs of $40 million previously announced.

The completion of Pendal’s acquisition is scheduled for Monday.