Perpetual lifts funds under advice as ‘new chapter’ begins

Perpetual Private’s funds under advice reached $17.9 billion at the end of the December quarter, an increase of 4 per cent compared to the previous quarter.

In an update to the ASX released on Friday, the firm said that Perpetual Private’s performance had benefited from positive market movements as well as continued net flows.

Overall, Perpetual reported a 4 per cent rise in total assets under management (AUM) to $93.7 billion, benefiting from positive market movement during the quarter but being partially offset by negative currency movements and outflows.

“Despite what was a very tough operating environment in 2022 for asset managers, Perpetual has ended the December quarter in a strong position. All areas of our business experienced growth in the quarter,” commented Perpetual CEO and managing director Rob Adams.

“Across our asset management business, we benefited from a rebound in equities markets in the quarter and while at a headline level, we reported net outflows of $1.2 billion, we saw continued and solid interest in our global equities capabilities across both Perpetual Asset Management International (PAMI) and Perpetual Asset Management Australia (PAMA).”

PAMI’s AUM sat at $71.6 billion at the end of the quarter, 4.5 per cent higher than the previous quarter, while PAMA’s AUM rose 4 per cent to $22.1 billion.

The increase in AUM for PAMI was largely driven by positive market movements of approximately $7.9 billion, which were offset by negative foreign exchange movements of $3.8 billion and net outflows of $1.0 billion.

Meanwhile, the rise for PAMA was said to be mainly due to favourable market movements, while being partially offset by net outflows predominantly from the institutional channel.

Perpetual Corporate Trust’s total funds under administration lifted 1 per cent to $1.14 trillion.

“It was a significant quarter for Perpetual, as we have now received Pendal shareholder and court approval for the acquisition of Pendal Group which means we are on track for completion this coming Monday, 23 January 2023,” said Mr Adams.

“The acquisition will see Perpetual substantially grow its asset management business, creating a leading global, multi-boutique asset management firm focused on active asset management, with a truly global distribution footprint and leading ESG investment strategies, better positioned to manage industry headwinds and to drive future growth.”

Perpetual is due to report its results for 1H23 on 23 February. This is expected to cover both Perpetual’s results for the period ending 31 December 2022 as well as high-level, pro-forma information on the combined group including details on AUM by asset class as well as synergies and leverage position.

Based on preliminary unaudited financials for the half year, Perpetual expects that its underlying profit after tax over the period will be in the range of $65 million to $70 million.

“Given the acquisition of Pendal Group is yet to complete, Perpetual is not able to provide full-year expense guidance for the combined group at this time,” the firm noted.

“However, on a standalone basis, Perpetual remains on track to deliver FY23 expense growth at the higher end of its previously stated expense guidance.”

Guidance for the combined group for FY23 is expected to be provided as part of Perpetual’s March quarter business update due out in April.

“From the end of January, Perpetual enters a new chapter in its history, as a significantly stronger asset management business with diverse but complementary corporate trust and private wealth businesses,” Mr Adams said.

“We will be laser-focused on a successful integration of Pendal and continuing to drive growth across all divisions.”