Platinum Asset Management appoints new CEO and undertakes board restructure.

About Platinum Asset Management Limited

Platinum Asset Management Limited (Platinum Group, the Group, ASX: PTM) was founded in 1994 by Kerr Neilson and Andrew Clifford and others with the financial backing of George Soros. With a specialty focus on international equities. Platinum shares commenced trading on the ASX in May 2007 at $8.50 a share, a 70 percent premium to its $5 IPO price.

New CEO and Board restructure

Platinum Group announced the appointment of a new CEO and restructure of the board on 11 December 2023. Jeff Peters has been appointed CEO and managing director and will take up the role on or around 29 January following his relocation to Australia from the US.

Mr Peters has a 30-year asset management background along with strategic and management consulting skills. He previously led the institutional side of two large global asset managers in Columbia Threadneedle Investments and Putnam Investments after his time running the asset management practice at McKinsey.

This appointment follows the decision of Platinum Group co-founder, Andrew Clifford, to step down as CEO and from the board, but continue as co-chief investment officer.

Two other executive directors including the previous managing director, Andrew Clifford will step down from the board leaving independent non-executive directors, Guy Strapp, Anne Loveridge, Brigitte Smith, and Phillip Moffitt on the board. Kerr Neilson retired from Platinum’s board on 16 November 2022.

Funds Under Management

At June 2023 Platinum reported Funds Under Management (FUM) of $17.3 billion, down 4.9 percent from $18.2 billion at 30 June 2022. The decline in FUM during the 2023 financial year comprised a 30 June 2023 distribution outflow of $0.4 billion, net fund outflows of $2.4 billion and positive investment returns of $2.0 billion for the year. The decline in FUM resulted in a $44.6 million decrease in management fees which reduced the Group’s 2023 profit before tax to $116.8 million, which is a $29.9 million decrease from the previous year.

FUM have declined further in the 6 months to 31 December 2023 to $15.4 billion. Redemptions were the result of large institutional withdrawals, although retail outflows, which are the predominant part of Platinum’s business, were less volatile.

The Future

Platinum’s future profit growth is dependent on its ability to grow FUM which in turn is dependent on relative performance against the benchmark index and not just absolute performance.

The thirty-year-old Group is also facing competition from index tracking ETF strategies crowding the marketplace and term deposits that are offering returns of more than 5 percent interest. The Group has already flagged that performance fees for the six months ended 31 December 2023 are negligible, although performance fees do fluctuate significantly from year to year.

Global investment markets and the business environment in which Platinum operates continue to evolve and Mr Peters’ experience and leadership will be vital to Platinum delivering strong investment outcomes for clients and profit growth for shareholders.