In an ASX listing on Tuesday, Platinum said the termination of this mandate, which was not included in the company’s April 2025 funds under management (FUM) figures, will be reflected in Platinum’s 31 May FUM results.
The mandate loss is expected to lead to a decline in revenue, the asset manager conceded but added that it intends to offset this impact through an acceleration of cost-saving initiatives planned for FY2025–26.
These cost reductions are incremental to previous measures announced to the market, aimed at improving the firm’s operational efficiency and profitability in the longer term, it said.
Following the announcement, Platinum’s share price fell 6.72 per cent over the course of the day to close at 0.62 cents.
Also on Tuesday, Platinum shared that net outflows reached approximately $243 million in April, with $215 million of that figure attributed to its Platinum Trust Funds.
As such, FUM in April stood at $9.6 billion, down from $10.2 billion in March, and $13.7 billion a year ago.
The lower FUM, Platinum noted, reflects the broader downturn in equity markets, which has dampened investment sentiment.
Earlier this month, Platinum announced it is in early talks with global alternative asset manager L1 Capital over a possible merger, which could create an entity with a combined $18 billion in funds under management.
The potential merger would be enacted via Platinum acquiring L1 Capital in return for the issue of new ordinary Platinum shares. Following completion, L1 Capital shareholders would own around 75 per cent of shares in Platinum and existing Platinum shareholders would own 25 per cent.
In announcing this possible deal, Platinum said: “If the potential merger proceeds, the combined shareholders are expected to benefit from greater scale and diversity of investment strategies and distribution channels, as well as access to meaningful cost efficiencies. The merger has the potential to deliver material earnings and value accretion for Platinum shareholders over the near term.”
In his analysis of the potential merger, Morningstar’s equity analyst, Shaun Ler, said it could unlock value through the elimination of duplicate costs, but warned that structural challenges of active management would still remain a problem.
“The proposed merger could unlock some value, mainly through the elimination of duplicate costs. There may also be cross-selling benefits from a larger combined distribution network, although this is difficult to quantify given potential product overlaps and Platinum’s underperformance,” Ler said.
“While the merger would create a larger entity with greater scale, it does not reverse the structural challenges facing traditional active managers like Platinum and L1 – namely, fee pressure and market share loss to passive strategies, such as via ETFs.”
