PTM 1.44% $4.10 platinum asset management limited

Discussion between Andrew Clifford and Hamish Douglass on Livewire, page-25

  1. 540 Posts.
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    PPT is also a helpful reminder of the following

    (1) Key man risk - the decline really accelerated when John Sevior left, followed afterwards by Matt Williams. FUM plummeted when outflows followed those men to Airlie.

    (2) Culture takes a long time to build but also can be destroyed quickly - the historical changing of guards at Perpetual was historically well-managed and ensured continuity, from Anton Tagliaferro to Peter Morgan to John Savior. That continuity preserved the culture, investment process and etc. In my opinion, it ended with the appointment of Paul Skamvougeras, who brought in a very different investment mentality from Ellerston.

    (3) Mergers/acquisitions - a long-standing short term trick to plug revenue holes and mask underlying problems with the initiator. You don't have to be a rocket scientist o see that there are some deep underling issues with PPT, but they are going about the wrong way to address them through a tie up with Platinum. I wouldn't be surprised if the remuneration of Perpetual executives are also skewed towards revenues and FUMs as opposed to return on equity.

    Unless PPT is willing to pay a ''crazy premium in cash'', it is hard to see, as a PTM investor, any benefits to a tie up - for example, downside risk associated with a scrip for scrip, depressing PTM's return on equity, misalignment of culture between both companies, lack of leadership in PPT (in my view, a key reason why John Sevior and Matt Williams left and also why they turned down Perpetual's efforts for a tie up with Airlie before their eventual tie up with Magellan).
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