Perpetual has experienced an improvement in the margins in its investment business, despite a decline in funds under management (FUM).
"Perpetual Investments' average funds under management for the period was lower than in the previous period, but a change in the mix between lower margin cash, credit and quant funds, and higher margin equity funds in favour of the latter pushed up the business' average revenue margin from 75 bps (basis points) in 1H10 (the first half of 2010) to 79 bps in 1H11 (the first half of 2011)," outgoing Perpetual chief executive David Deverall said yesterday at the presentation of the groups half-year results.
Perpetual Investments had $27.5 billion in FUM at the end of 31 December 2010, compared with $29.3 billion in FUM at end of December 2009, a decrease of 6 per cent.
Compared to the $26.9 billion in FUM at the end of June 2010, the business improved by 2 per cent.
January 2011 showed a continuation of the improvement in funds, and at 31 January the fund manager reported FUM of $27.7 billion.
"While some of the major market concerns, such as the European debt problems, subsided during 1H11, investors' willingness to commit funds remains hampered by an uncertain outlook and this has been reflected in flows across the industry," Deverall said.
Deverall handed over the role of chief executive to Chris Ryan on 14 February and stepped down yesterday as a Perpetual board director.
"We will build on the achievements of recent years, strengthen our market position and look for opportunities to grow in areas that can deliver clear returns for our shareholders," Ryan said.
Perpetual Investments reported an increase in profit before tax of $42.9 million, up 5 per cent on the same period last year.
Perpetual Limited's net profit after tax was impacted on by a goodwill impairment charge of $10.6 million in relation to its Smartsuper business, a self-managed superannuation fund administration business.
The group reported a net profit after tax of $35 million for the six months to 31 December 2010, a decrease of 29 per cent compared to the same period the previous year.
