Perpetual earlier revealed it is set to undergo a major transformation, with KKR poised to acquire its wealth management and corporate trust divisions for $2.175 billion. Pending approval, this strategic move is expected to simplify Perpetual into a sleek, debt-free multi-boutique asset manager, sharpening its focus exclusively on funds management.
In its latest ASX listing just last week to announce its upcoming AGM, Perpetual said: “Our multi-boutique business comprises quality investment teams across seven boutiques and brands with diversified investment capabilities across equities, cash and fixed income, multi-asset and sustainable investing, and a strong presence in key markets across the globe”.
Despite net outflows, Perpetual’s funds management business boosted its assets under management from $212.1 billion to $215.0 billion in the 2024 financial year. The firm credits this growth to its robust model, which leverages a diverse mix of equity, bond markets, regions, and client channels.
“While the board acknowledges that there is still work to do to maximise the value of Perpetual’s more recent acquisitions, particularly Pendal Group, we are confident that the strength of the brands, together with their exceptional investment teams, will underpin long-term growth for our asset management business,” the firm’s outgoing chairman, Tony D’Aloisio, said.
Sharing the optimism, as he handed over the reins to Bernard Reilly earlier this month, former CEO Rob Adams highlighted Perpetual’s readiness to enter its next chapter as a global multi-boutique asset manager. In his final address to shareholders, Adams emphasised that with a strong balance sheet and an extensive global footprint, Perpetual is well-positioned for substantial growth across key markets and channels.
This renewed sense of confidence at the firm comes despite a challenging year for Perpetual’s asset management business, which faced $18.4 billion in total net outflows.
Outflows were mainly concentrated in J O Hambro’s Global and International Select strategies as well as outflows in the J O Hambro UK Dynamic strategy following the departure of a portfolio manager. But the firm also experienced net outflows in TSW’s International Equity capability, driven by partial redemptions from clients due to portfolio rebalancing and asset allocation shifts.
“While this result has been disappointing, our asset management business overall was supported by stronger markets over the year, which offset the impact of net outflows,” Adams said at the time.
Reflecting on the decision to split Perpetual, the former CEO explained that the firm’s 2018 transformation strategy was designed to combat a weakening competitive position in asset management and to address significant investment needs in corporate trust and wealth management. These strategic goals were effectively realised through the sale to KKR.
Moreover, Perpetual’s bold decision to focus exclusively on asset management gained added confidence from its strategic acquisitions of Trillium, Barrow Hanley, and Pendal Group. These deals not only added substantial scale but also provided a crucial boost by reducing the firm’s previous heavy dependence on Australian equities.
As Perpetual gears up for a late 2025 shareholder vote on the KKR deal, the firm is banking on unanimous support to secure an immediate cash injection to pave the way for future growth.
“The board is confident that retaining ownership of our asset management business will unlock improved returns to shareholders over the long term,” the chairman said.
Perpetual’s AGM is scheduled for 17 October.
