Perpetual share price slides following $7.5 billion of quarterly outflows

A man sits nervously at his computer with his mouth resting against his hands clasped in front of him as he stares at the screen of his computer on a home desk.A man sits nervously at his computer with his mouth resting against his hands clasped in front of him as he stares at the screen of his computer on a home desk.

The Perpetual Ltd (ASX: PPT) share price is trading down today following the release of its quarterly business update for the period ended 30 June 2022.

At the time of writing, the Perpetual share price is trading 3.35% in the red at $29.40, not too distant from its 52-week low of $27.87 on 20 June.

Perpetual share price slips alongside AUM

Key takeouts from the period include:

  • Total Assets under Management (AUM) were A$90.4 billion at 30 June 2022, 8% lower than the prior period
  • Performance – 92% of Barrow Hanley’s equities strategies and 92% of Australian equity strategies outperformed their benchmarks over three years
  • Perpetual Asset Management International’s (PAMI) AUM was A$69.2 billion, down 5%, impacted by negative market movements and net outflows.
  • Perpetual Asset Management Australia’s (PAMA) AUM was A$21.3 billion, down 16% year on year, after net outflows of $2.1 billion.
  • Perpetual Corporate Trust continued to deliver steady growth, with total Funds under Administration (FUA) up 3% to A$1.09 trillion
  • Perpetual Private’s Funds under Advice were A$17.4 billion, down 7% in the quarter due to
    negative market movements, but supported by continued positive net flows
  • Trillium’s flows were broadly flat, with $11.5 million in outflows during the quarter

What else happened this period for Perpetual?

Despite incurring some downside in its core asset holdings due to market volatility, Perpetual saw some growth across divisions last quarter.

The Perpetual Private (PP) and Perpetual Corporate Trust (PCT) businesses continued to grow during the period.

These contributed non-market-related revenue and approximately 30% of total group revenue.

PP marked a record 18 consecutive half years of inflows, while PCT continues to deliver steady growth from exposure to trustee, custodian, and securitisation markets.

For its Barrow Hanley and Trillium segments, the business pipeline has also grown.

It reported the pipeline for the June quarter included approximately $933 million of committed investments, which have all now been fully funded.

Management commentary

Speaking on the announcement, Perpetual Chief Executive Officer and Managing Director, Rob Adams said:

Perpetual has delivered a solid quarter in what has been a tough market environment for asset managers. It is during such periods of difficult global investment markets that the benefits of Perpetual’s unique combination of businesses come through, bringing sector, client and geographic diversity, with our non-market linked revenues helping to provide a level of earnings stability through market cycles.

While our AUM was impacted by a decline in markets through the quarter, our investment teams delivered very strong relative investment performance, with all but two of our equities funds across Barrow Hanley and our Australian equities team in Perpetual Asset Management Australia (PAMA) outperforming their benchmarks over three years.

What’s next for Perpetual?

The company expects FY22 operating expense growth to land between 18% and 22%. This reflects investments made through the year.

In the last 12 months, the Perpetual share price has slipped more than 23% into the red and is down 18% this year to date.

The post Perpetual share price slides following $7.5 billion of quarterly outflows appeared first on The Motley Fool Australia.

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Motley Fool contributor Zach Bristow has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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