Perpetual shares fall as shareholders grill board on poor share price
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More news: Perpetual’s share price fell 0.86% to $19.59 by 2:12pm ADST as shareholders grilled its board at its annual general meeting about its weak stock performance.
Its outgoing chair Tony D'Aloisio said the reason for the investment manager’s poor share price was “really an issue for the market”.
D’Aloisio said the board was trying to get shareholders through the noise in the lead up to the vote on KKR’s acquisition of Perpetual’s corporate trust and wealth management arms.
“Bernard's [Reilly] task … is really to demonstrate that this footprint that has been put in place for the asset management business, the use of shareholder funds for the acquisition is [in the] medium to long term going to provide the return that you're searching for,” he said.
“And I think, in your own mind, in your own analysis, you have a view as to what … could further influence that price to rise. And it's not really the secondary market that sorts this out.
“But I've no doubt, as we're clearer on the value and what we're doing with these businesses and integrating those costs that that will feed through … but will feed through back to the share price.”
The AGM also saw shareholders decline to elect fund manager Rodney Forrest as an independent director. Proxy votes showed there was about a 70% vote against his election.
Prior to the meeting the board had determined not to support Forrest’s appointment in the context of the board skills assessment and its composition.
What they said: “Today there are over 1800 equity products in Australia. If we just do what everyone else does we will become mediocre. What we need now is 10 times thinking, as Larry Page says, not 10% improvements. We need new energy. We need to spot and reward internal talent. We need to start off a blank piece of paper,” Forrest said as he addressed shareholders.
“... We need to go back to first principle, start again. Put our hand up and say, we make mistakes. We have so much to fix, but if we all buy in the future can be very bright. I'm not saying I have all the answers, but what I will bring is a fact based evidence approach, if we're not brutally honest, the ice cube may melt faster.
“... will strive to preserve the brand, restore confidence and support our wonderful team. We need simplicity and clarity of thinking, and right now, I'm your chance.”
Perpetual board receives first strike as shareholders vote against remuneration report
More news: As anticipated, Perpetual shareholders rejected the remuneration report at the investment manager’s annual general meeting today.
Proxy votes showed that about 87% of shareholders voted against the remuneration report, leading to a first strike against the board.
What they said: “Although our reasoning is explained in the remuneration report we are humbled by the vote against from shareholders and we will … review our remuneration framework and all remuneration arrangements going forward,” chair Tony D'Aloisio said.
“It is important to also note that we have no plans to put in place any further retention payments for the leadership team this financial year.”
Perpetual chair apologises for poor share price
More news: Perpetual has apologised for its poor share price at its annual general meeting and has asked shareholders to turn their focus on the proposed acquisition of its corporate trust and wealth management arms by KKR.
Speaking to shareholders, chair Tony D'Aloisio said “let me conclude by apologising on behalf of the board that our share price is not showing improvement compared to this time last year”.
He asked shareholders to instead focus on:
- The soundness of three businesses we have;
- The asset management acquisition strategy with new leadership;
- The option to vote on the acquisition for a more immediate cash return and retention of their investment in a single purpose asset management company; and The changes to the board.
Perpetual’s share price last closed at $19.76 and year-to-date has plummeted 23.35%. Over the last five years its share price has plunged 2.95%.
D'Aloisio also addressed concerns on its plan to transfer the 138-year-old Perpetual brand to KKR. Under the acquisition, Perpetual’s Australian equities teams will continue to use the Perpetual brand for a period for seven years. The first five years would be cost free while the sixth and seventh year would be a market based licensing fee, if the teams choose to continue using the brand.
What they said: “We know that the history of the Perpetual brand is significant for the Australian asset management industry and hence the negotiation of an appropriate agreed period of use for our Australian equities business,” he said.
“Importantly, Perpetual’s global Asset Management business trades under a number of recognised global brands including J O Hambro, Trillium, Pendal, Barrow Hanley, TSW and Regnan. The Perpetual name has not been a feature of those businesses hence further reducing risk from passing the name into private hands.”
Perpetual posts 3% AUM rise in first quarter
The news: Investment manager Perpetual reported a 3% rise in assets under management (AUM) during the September quarter, boosted by positive markets.
The numbers: Total AUM grew from $215 billion to $222 billion during the three months to September, primarily due to positive market movements of $12.7 billion and net inflows of $400 million. However, this was offset by negative currency movements of $5.8 billion, the company said.
Average AUM was $220.7 billion compared to $219.8 billion in the June quarter.
Perpetual said the quarter saw an improvement in investment performance, with 71% of the group's strategies outperforming their three-year benchmark.
The company’s boutiques recorded the following changes in AUM and net flows
- Barrow Hanley grew 1.3% to $78.5 billion with outflows of $2.1 billion;
- J O Hambro fell 1.9% to $37.5 billion, with outflows of $1.6 billion;
- Pendal Asset Management grew 13.9% to $45.4 billion, with inflows of $3.9 billion;
- Perpetual Asset Management grew 4.6% to $21.7 billion, wiht inflows of $200 million;
- Trillium fell 2.4% $9.2 billion, with outflows of $200 million; and
- TSW grew 2.5% to $30 billion, with flat net flows.
In its corporate trust business, Perpetual’s funds under administration (FUA) grew 1% quarter on quarter to $1.2 trillion. Wealth management FUA rose 3% to $20.4 billion.
The context: Perpetual noted that its Pendal boutique in Australia had a "particularly strong quarter", partly attributable to a short-dated cash mandate, while Barrow Hanley had a "more challenging quarter" in its global and international equities strategies.
It also flagged an improvement in net outflows in its offshore J O Hambro and TSW boutiques. In August, Perpetual recognised impairments of $547.4 million, following outflows of $8 billion for J O Hambro and $4 billion for TSW during the 2024 financial year.
The source: ASX announcement
