Pressure is building on Perpetual chief Rob Adams.
In a memo to clients titled “JO Hambro Worsens”, MST Financial analyst Lafitani Sotiriou estimated the London-based fund manager and Perpetual subsidiary saw outflows between $500 million and $1 billion in October, putting it in league with embattled rival Magellan Financial.
He added most of JO Hambro funds are below the high-water mark by an average of 10.7 per cent.
“JO Hambro has reached a point where on a rolling 12-month basis, 17.7 per cent of its starting FUM is in out-flow,” Sotiriou wrote. “This is comparable to Magellan’s last read which was 20.4 per cent in September.”
He reckons JO Hambro represented a staggering 80 per cent of Pendal’s value and has been declining since the $2 billion Pendal-Perpetual acquisition in January.
“This is a major risk for Perpetual, which has balance sheet issues, along with execution risk in bringing the businesses together,” he wrote.
It’s not surprising Sotiriou – an outspoken critic of the Pendal deal – is agitating. He’s been a thorn in Perpetual’s side of late and enjoyed a testy exchange with Adams in February over its expansion strategy. But, his views do represent niggling concernsin the market about the tie-up, which is now almost a year into being and, so far, has struggled to deliver any big wins.
Adams can always cite market conditions for underperformance (and outflows), but delivering synergies from the integration lies squarely at his feet. On this front, shareholders are still waiting.
Brookfield is contemplating relisting Origin Energy in as little as five years, writes Anthony Macdonald.The UK’s financial watchdog has unveiled a new framework designed to protect retail investors from misleading ESG claims, Bloomberg reports.Goldman Sachs chief executive David Solomon warned that tensions between Washington and Beijing could take years to resolve, The Financial Times reports.
The chart
Prices for lithium-rich spodumene concentrate have tumbled from $US8000 a tonne in January to an average of $US2240 a tonne.