Pendal Group’s FUM edged down to $124.9 billion at the end of March, from $135.7 billion on 31 December on the back of weak and volatile markets, it said in an ASX filing.
The fund manager’s Australian FUM dropped slightly to $34.5 billion from $35.9 billion, comprised of $0.5 billion in flows and $0.9 billion in investment performance, market movement and distributions.
“This quarter, we are pleased to have seen a significant improvement in flows despite weak and volatile markets that have impacted overall fund levels,” Pendal Group’s CEO, Nick Good, said.
Of particular note, Mr Good flagged positive flows into EUKA (Europe, UK and Asia) segregated mandates, including a sizable additional investment from St. James’s Place.
Overall, Pendal’s EUKA FUM dropped to $22.3 billion from $24.1 billion, despite flows of $0.7 billion.
In the US, Pendal suffered a sizable setback, with FUM shrinking to $57.2 billion from $65.7 billion.
However, despite its “slightly” reduced FUM, Mr Good assured that Pendal’s diversified book of businesses means the firm is well positioned to offer clients the range of investment strategies they require to meet their changing investment need.
“Pendal has some of the most respected investment talent in the world, a compelling global distribution footprint and a diversified product suite including a growing range of sustainable and impact solutions. We are also making solid progress on our multiyear investment program.
“I have confidence our strategic priorities will deliver long-term organic growth,” Mr Good added.
On Tuesday, Pendal turned down Perpetual’s offer to acquire 100 per cent of the shares in Pendal for an indicative $6.23 per share, just minutes before announcing a buyback.
Pendal’s board has determined that the take over “significantly undervalues” the current and future value of Pendal and is therefore not in the best interest of shareholders.
The conditional, non-binding indicative offer from Perpetual was for 1 Perpetual share for every 7.5 Pendal shares plus $1.67 cash, representing an indicative value of $6.23 per Pendal share.
“Pendal’s board and management team will continue their focus on building a best-in-class global investment management platform with the objective of maximising long-term shareholder value.”
In a separate statement, Pendal confirmed that it plans to launch a buyback of up to $100 million following the release of its financial results for the six months to 31 March, on 10 May.
“Pendal is a strong cash-generating business with a solid balance sheet, which provides significant flexibility to pursue both growth and capital management initiatives for the benefit of shareholders,” the ASX listing read.
Pendal revealed that its board has been undertaking a capital management review since the start of the year, recognising that Pendal’s shares have been undervalued.
“The board has determined an onmarket buy-back is the most efficient way to deliver an earnings per share accretive return of capital while maintaining flexibility to fund future growth initiatives and Pendal’s dividend policy,” it said.
