Perpetual earlier revealed it was set to undergo a major transformation, with KKR set to acquire its wealth management and corporate trust divisions for $2.175 billion. Pending approval, this strategic move is expected to streamline Perpetual into a sleek, debt-free multi-boutique asset manager, focusing exclusively on fund management.
In its latest listing on the ASX last week to announce its upcoming AGM, Perpetual said: “Our multi-boutique business comprises quality investment teams across seven boutiques and brands with diversified equity investment capabilities , cash and fixed income, multi-asset and sustainable investing. , and a strong presence in key markets around the world.”
Despite net outflows, Perpetual’s fund management business increased its assets under management from $212.1 billion to $215.0 billion in fiscal 2024. The company attributes this growth to its model robust, leveraging a diverse mix of equity and bond markets, regions and customer channels.
“While the Board recognizes that there is still work to be done to maximize the value of Perpetual’s most recent acquisitions, particularly Pendal Group, we are confident that the strength of the brands, as well as their management teams, exceptional investments, will support the long-term growth of our asset management business,” said the company’s outgoing president, Tony D’Aloisio.
Sharing the optimism, as he handed over the reins to Bernard Reilly earlier this month, former CEO Rob Adams highlighted Perpetual’s desire to enter its next chapter as a multi-asset manager. -global stores. In his final address to shareholders, Adams highlighted that with a strong balance sheet and broad global footprint, Perpetual is well positioned for substantial growth in key markets and channels.
This renewed confidence in the business comes despite a difficult year for Perpetual’s asset management business, which faced total net outflows of $18.4 billion.
Capital outflows were mainly focused on JO Hambro’s Global and International Select strategies as well as the JO Hambro UK Dynamic strategy following the departure of a portfolio manager. But the firm also saw net outflows in TSW’s International Equity sector, driven by partial client redemptions due to portfolio rebalancing and asset allocation changes.
“While this result was disappointing, our asset management business as a whole was supported by stronger markets during the year, which offset the impact of net outflows,” Adams said at the time.
Reflecting on the decision to split Perpetual, the former CEO explained that the company’s transformation strategy in 2018 aimed to combat the weakening competitive position in asset management and meet the needs of significant investments in the areas of trust and wealth management. These strategic objectives were effectively achieved through the sale to KKR.
Additionally, Perpetual’s bold move to focus exclusively on asset management has boosted confidence through its strategic acquisitions of Trillium, Barrow Hanley and Pendal Group. These transactions not only added substantial dimension, but also provided a crucial boost in reducing the company’s heavy reliance on Australian equities.
As Perpetual prepares for a shareholder vote in late 2025 on the KKR deal, the company is counting on unanimous support for an immediate cash infusion to pave the way for future growth.
“The board is confident that retaining ownership of our asset management business will unlock greater returns for shareholders over the long term,” the chairman said.
Perpetual’s AGM is scheduled for October 17.
