In February 2024, the company announced a two-pronged turnaround strategy focused on “reset and growth,” which it hoped would address net outflows and declining revenue.
In a speech at the company’s annual general meeting on November 12, Peters acknowledged that the company began 2024 with “major challenges” related to difficult investment performance, cash outflows, pressure from sector liabilities and revenue pressures.
The first part of the recovery consisted of reorganizing the investment platform by no longer bringing together the same people responsible for research and portfolio management. This involved separating research and portfolio management roles, increasing research resources for its flagship international fund and appointing lead portfolio managers for each fund.
This had the benefit of lower complexity, more concentrated portfolios and a more streamlined research effort, he said.
Then there was a review of the product range with the closure of several vehicles to eliminate complexity and costs and the merger of two listed investment companies with active exchange traded funds. Third, better communication with clients and advisors to understand their needs.
“We continue to collaborate with our customers and begin a second round of engagement, focusing on what we are doing to improve, and we are starting to see the first signs of a slowdown in exits with a rate of daily net exits down 13 percent. hundred since the recovery began in February,” Peters said.
Other early successes include reduced spending, improved investment performance, slower capital outflows and a target operating model that is progressing as planned.
Chairman Guy Strapp added: “Successful turnarounds don’t happen overnight and while we are starting to see green shoots, we are only nine months into what is essentially a three-year plan . Jeff has performed exceptionally well in the initial phases of the turnaround so far and I am confident he will continue to deliver on the next phases of the plan.
Platinum has now moved to the “growth” phase of the turnaround where it will add new products and distribute new products through external suppliers.
“We also considered diversifying our product range towards asset classes in which we are not active but which could be of interest to our clients. In general, new asset classes can be created, purchased or accessed from third parties.
“Construction is difficult beyond global actions due to our specific focus. The purchase is approached via the inorganic strategy that we talked about. And while third-party access sacrifices some benefits, it has the benefit of getting to market quickly, as well as lowering fixed costs and capital requirements because partners can make their initial contribution.
This is the Platinum Partner Series, which will provide exclusive access to top-performing global institutional managers who do not have a significant wholesale/retail presence in Australia. The goal of these new relationships is to build a portfolio of sub-advisory opportunities over the next three years to expand its reach and grow the business.
“We are in discussions with several of these companies and will update the market when we are further along in finalizing our partnerships. This will be an additional source of new revenue over time, allowing us to expand our ability to better meet the needs of investors.
At the same time, Strapp discussed the potential acquisition of the company by Regal Partners, announced in September. Regal’s first offer was rejected, but it has since announced a due diligence period for Regal to potentially make a revised offer.
He said: “This initial period of mutual due diligence [with Regal] is still ongoing and the board of directors will continue to keep the market up to date in accordance with continuous disclosure obligations.
“We are also in contact with certain parties who have contacted Platinum to explore various forms of transactions, which we will evaluate, as they make both business sense and enhance value for our shareholders – at both on their individual merits but also in relation to our ongoing autonomous activity. restructuring and recovery strategy.
