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Perpetual turns net outflows into inflows

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Outflows have turned to inflows in Perpetual’s asset management business.

Perpetual’s assets under management (AUM) held steady over the September quarter, after the investment firm declared a “marked improvement” in its net flows.

In an update to the ASX on Friday, Perpetual reported net inflows of $0.1 billion for the September quarter, in contrast to the net outflows of $5.1 billion suffered in the prior quarter.

“The September quarter showed a marked improvement in total net flows across our asset management business when compared to the June quarter,” commented Perpetual chief executive officer and managing director Rob Adams.

“Delivering positive net inflows despite the current operating environment, with volatility impacting markets and investor confidence globally, demonstrates the quality and diversity of our broad capability set and our emerging strength in distribution.”

The firm’s total AUM was $211.7 billion as at 30 September versus $212.1 billion a quarter earlier. Perpetual said that net inflows and $3.3 billion in favourable currency movements offset most of the $3.8 billion impact of lower investment markets during the quarter. Average AUM sat at $215.6 billion in the September quarter, up from $211.2 billion in the June quarter.

Breaking down the results of its asset management business, Perpetual reported that Barrow Hanley’s AUM increased by 1.5 per cent to $70.9 billion.

“Barrow Hanley had a strong quarter, achieving $0.5 billion in net inflows across its strategies, underpinned by $1.4 billion in net inflows in its global and international strategies, as well as $0.6 billion in new flows through the launch of its second collateralised loan obligation offering, offset by outflows in US equities and fixed income strategies,” said Mr Adams.

A lift in AUM was also reported for Pendal Asset Management, up 1.7 per cent to $41 billion, with net inflows of $1 billion partly offset by the impact of declining markets.

“Importantly, the integration of Pendal Group remains on track,” Mr Adams noted.

J O Hambro Capital Management’s AUM was down 1.8 per cent to $40.4 billion, and Perpetual Asset Management’s AUM fell by 2.4 per cent to $20.1 billion. Trillium’s AUM dropped 3 per cent to $9.67 billion, while TSW’s AUM moved 2 per cent lower to $29.5 billion.

“Our new business pipeline has continued to grow, supported by strong investment performance with 77 per cent of the group’s strategies outperforming their benchmarks over the important three-year time horizon,” said Mr Adams.

“We have seen continued strong interest in Barrow Hanley strategies and growing interest in several J O Hambro strategies and expect that positive momentum to continue into the December quarter.”

Elsewhere, Perpetual’s corporate trust business experienced a 1.7 per cent increase in funds under administration over the September quarter to $1.18 trillion. Meanwhile, the firm’s wealth management business saw a 1 per cent decrease in funds under advice to $18.4 billion.

“In our corporate trust business, Perpetual Digital continued to attract new, significant clients and performance in the debt markets services and managed funds services businesses remained resilient,” Mr Adams explained.

“In wealth management, despite the difficult operating environment, we have seen another quarter of positive net flows and our non-market linked revenue streams continue to perform well.”

As part of its update, Perpetual also reiterated its total expense growth guidance of between 27 and 31 per cent for the 2024 financial year.

Last month, Perpetual announced it had decided to close its Global Innovation Share Fund “due to the fund not attaining, or expecting to attain, the scale required for it to remain viable”.