Pendal Group recorded $2.5 billion in net outflows during the three months leading to June, with clients shifting $1 billion from European strategies, $700 million from Australian equities and $500 million from UK funds.
However, the investment group closed the quarter on $89.4 billion in funds under management (FUM), a 4 per cent increase in March.
Pendal cited a rebound in global equity markets from their March lows for driving an increase in FUM of $11.1 billion.
But the increase was offset by a $5.2 billion currency impact as the Australian dollar appreciated against major currencies.
While money flowed out of Europe and Australian equity strategies, Pendal said its global and emerging market strategies saw an influx.
Meanwhile annual performance fee revenues for Pendal Australian funds in the 12 months ended 30 June were $13.6 million, surging by $12 million from the year before.
Pendal chief executive Emilio Gonzalez said the group’s diversification strategy had provided resilience in the face of macro-economic and market volatility.
“During the period we saw a strong turnaround in flows into US pooled funds with net inflows of $200 million compared to outflows of $300 million in the prior quarter,” Mr Gonzalez said.
“We also saw improved flows in the Australian wholesale channel.
“However, continued negative sentiment towards European equities saw outflows in [Pendal subsidiary J O Hambro Capital Management] JOHCM’s European strategies in both the OEICs and segregated accounts. In Australian equities, there are outflows due to an institutional client reshaping its portfolio.”
The Pendal Australia business had seen net outflows of $1 billion during the June quarter, the bulk being from an institutional client moving $900 million as they reshaped their Australian equity portfolio.
Meanwhile there was $200 million outflows from cash and fixed income strategies.
As previously indicated, the consolidation of Westpac’s superannuation platform is expected to see a $1 billion outflow in the September quarter.
Looking at JOHCM, there were net outflows of $1.5 billion, driven by value-oriented European and UK strategies.
But strong investment performance coupled with improved investor sentiment in the US was said to cause a positive shift in flows in the US pooled funds with net inflows of $200 million, which were predominantly in the international select and emerging market strategies.
Pendal has pointed to new mandates it recently won, with it expecting $1.5 billion across strategies to be funded in the next quarter.
Sarah Simpkins is a journalist at Momentum Media, reporting primarily on banking, financial services and wealth.
Prior to joining the team in 2018, Sarah worked in trade media and produced stories for a current affairs program on community radio.
You can contact her on [email protected].