In an ASX listing on Tuesday, Perpetual reported a decline in assets under management of 4 per cent from $230.2 billion at 31 December to $221.2 billion at the end of March, on the back of net outflows of $8.9 billion and negative currency movements of $0.9 billion.
The final result was marginally offset by favourable market movements of $0.7 billion, compared to $15.8 billion last quarter when its AUM gained 3.6 per cent.
Commenting on the result, CEO and managing director Bernard Reilly said: “Our Asset Management business was impacted by outflows in the quarter, mainly in global and US equities and cash, due to a range of reasons including client mergers, clients reallocating or rebalancing their portfolios and continued underperformance in some strategies”.
The headline outflow numbers included approximately $2.5 billion in net outflows in cash within the giant’s Pendal boutique, mainly due to the end of a previously announced, low-margin, short-term mandate won in 2024.
“Across our boutiques, we did not see any significant de-risking from clients in the period to 31 March and group investment performance was robust with 62 per cent of strategies outperforming over three years,” Reilly explained, adding that Perpetual remains mindful of “the evolving macro-economic environment” and “the impact of these external conditions on sentiment towards equities investments”.
Pendal Asset Management’s AUM was $42.5 billion, down 4.9 per cent compared to the December quarter. Excluding outflows in cash, Pendal experienced net inflows of $0.8 billion in Australian equities.
Barrow Hanley’s AUM was $81.9 billion, down 3.7 per cent on the December quarter, driven by net outflows of $3.0 billion and unfavourable currency movements of $0.8 billion.
Net outflows were predominantly in US large-cap equities ($1.4 billion) and global equities strategies ($1.3 billion), whilst the emerging markets strategies experienced positive flows in the quarter.
Perpetual Asset Management’s AUM was $21.3 billion, a decrease of 3.7 per cent compared to the December quarter, impacted by net outflows of $0.4 billion in Australian equities and multi asset strategies, whilst fixed income strategies experienced net inflows in the quarter.
Regarding its Corporate Trust business, Perpetual said total FUA grew to $1.26 trillion as at 31 March 2025, up 1.1 per cent on the December quarter.
“Positively, our Corporate Trust business, which contributed over 30 per cent of our earnings in 1H25, provides earnings diversification to our business as we face into equity market uncertainty,” said Reilly.
The business, he said, recorded growth across all three of its divisions: debt markets services; managed funds services; and perpetual digital.
Turning to Wealth Management, Reilly said it delivered $0.9 billion in net inflows, including a significant new client win, despite a competitive market environment.
“Pleasingly, the business remains resilient in what has been volatile financial markets,” the CEO added.
Looking forward, the wealth giant said it is on track to deliver its targeted $30 million in annualised cost savings by 30 June 2025, forming part of its broader simplification program to deliver $70 - $80 million in annualised cost savings by 30 June 2027.
Last month, Perpetual said it has internally promoted Song Hong to the role of chief transformation officer, after he joined Perpetual in November 2024 as a separation executive.
James MacNevin, Perpetual’s chief operating officer, told InvestorDaily that Hong will play a “vital role” as the firm remains keen to sell off its wealth management division.
“Song has extensive experience leading transformation and efficiency programs across complex organisations and stakeholder groups and will play a vital role as Perpetual transforms into a more streamlined, focused business,” MacNevin said in a statement.
The appointment of a chief transformation officer follows the announcement on 24 February that the sale of its wealth management and corporate trust business to KKR had fallen through.
The company stated its board had withdrawn its recommendation in favour of the transaction and the scheme implementation deed was terminated following a formal report from an independent expert.
