Morgan Stanley has laid out its top five priorities for incoming Perpetual chief executive Rob Adams, who commences his role on 24 September.
Mr Adams, who was previously the head of Janus Henderson Australia, will replace Geoff Lloyd after the latter left Perpetual to oversee MLC’s demerger from NAB.
The Morgan Stanley note listed Mr Adam’s top priority as “reigniting” Perpetual’s global equities business.
“Despite solid performance and penetrating approved product lists plus platforms, [Perpetual’s] global fund is yet to win meaningful flows,” said the analyst note.
Second, Mr Adams will need to diversify Perpetual’s investments business away from long-only Australian equities, which currently accounts for around 60 per cent of the fund manager’s total funds under management (FUM).
Long-only Australian equities is a mature market, said Morgan Stanley, and faces “high substitution risk” from passive strategies and ETFs.
Third, Perpetual must explore new distribution channels, said Morgan Stanley.
“Perpetual has only a minor presence in the [separately managed account] segment and has no products available via active ETFs on the ASX, both of which are growth areas with genuine client demand,” said the note.
Fourth, Mr Adams should look at refreshing Perpetual’s private wealth business which is something of the “niche” business at present with only 60 planners.
Finally, Perpetual ought to give its corporate trust business a fintech ‘health check’ with reference to trends like digital assets and blockchain, said Morgan Stanley.
As far as Perpetual's 2017–18 result, which is due on 30 August, Morgan Stanley is expecting solid numbers with a focus on base fee margins, cost control and private wealth flows.
