In a listing on the ASX on Monday, Platinum confirmed that after carrying out its due diligence, Regal had decided not to pursue the acquisition of the fund manager.
“Regal’s growth-focused strategy remains unchanged. Regal will continue to prudently evaluate organic and inorganic opportunities as they arise in order to further its ambition to become a leading provider of alternative investment strategies in Australia and Asia,” Regal said .
In September, Regal submitted an acquisition proposal to Platinum Asset Management, which was quickly rejected on the 26th of the same month. However, on October 4, Platinum granted Regal an extended period of mutual due diligence, signaling, at the time, an openness to a possible revised offer with improved terms.
In a separate quote, Platinum assured that sufficient working capital remains to support ongoing growth initiatives.
The fund manager also stressed that it is doubling down on its turnaround strategy, focusing on cost control, remuneration overhaul, product rationalization and overhaul of investment processes. All initiatives, he said, are aimed at stabilizing and resetting the business in order to return to a foundation of growth.
Underscoring its focus on product diversification, Platinum has unveiled a strategic partnership with US-based investment firm GW&K.
“As we move forward into the next phase of recovery, the area of investment is a key priority. We are also focused on managing costs based on our funds under management, as well as product diversification and the development of our sub-advisory partnerships under our new Platinum Partner Series,” Platinum said.
“To this end, we are pleased to announce that we have entered into our first partnership with GW&K, a leading US small cap specialist with A$86 billion of funds under management and over 50 years of experience in the walk. As part of this agreement, we have been appointed to exclusively distribute GW&K’s global small cap strategy to the Australian retail market.
On Friday, Platinum revealed that its net outflows reached $841 million in November. This figure, he pointed out, includes the loss of an institutional mandate of $537 million and net outflows from Platinum Trust Funds of approximately $239 million.
As a result, Platinum’s FUM stood at $10.96 billion as of November 30, up from $12.2 billion.
The fund manager’s share price fell more than 13 percent on Monday to close at around 90 cents.
Ongoing mergers and acquisitions likely
But despite the challenges, Ler pointed to a potential silver lining, suggesting that asset managers could thrive by adapting and innovating.
“I think there is always room for active management. The demand will always be there, they have a role to play. But they really have to reinvent themselves,” Ler said.
“As an asset manager you can still do business, but you have to be brilliant.
“Established organizations and old-school money managers tend to have this old-school mentality about how exclusive their products are or how endearing their clients are. I think this needs to change and managers really need to adapt.
He also cautioned fund managers considering mergers, pointing out that “not all fund manager consolidations have gone smoothly.” Citing Perpetual’s acquisition of Pendal in 2023 as an example, Ler argued that the similarity in investment styles and products between the two companies hindered value creation.
He emphasized that successful mergers require complementary differences, such as distinct asset classes, distribution teams and investment strategies, to generate revenue synergies and cost savings.
