Pendal (ASX: PDL) shares are up 1% after the fund manager announced its funds under management (FUM) at 30 June 2020.
What is Pendal?
is the new BT Investment Management. Having moved away from Westpac Banking Group (ASX: WBC), Pendal is now one of Australia’s largest fund managers, with around $90 billion invested across its business.
What did the fund manager announce?
Pendal announced today that its FUM rose by 4% to $89.4 billion in the quarter ending 30 June 2020.
The fund manager said that there was a significant rebound in global share markets from the March 2020 lows which drove an increase in FUM of $11.1 billion. However, this was offset by a $5.2 billion currency impact as the Australian dollar appreciated against major currencies.
In terms of net flows there was a net outflow of $1 billion for Pendal Australia and $1.5 billion outflow for JOHCM, meaning there was a $2.5 billion net outflow over the quarter. The company pointed to the $0.2 billion inflow for the US pooled funds as a positive.
Pendal was pleased with the performance fees generated by the Australian division. FY20 performance fees are $13.6 million, up from $12 million in FY19.
Pendel CEO Emilio Gonzalez said: “Pendal’s diversification strategy continues to provide resilience in the face of the macroeconomic and market volatility.
“Notably, as a result of improved investment performance we have had new mandate wins along with advanced confirmation of new monies from existing clients totalling $1.5 billion in multiple equity strategies across the globe. This is expected to be funded in the September quarter of 2020.”
Summary
It isn’t a good sign to see $2.5 billion flow out of the door. I think older managers like Pendal face difficulty growing in the future because the new generation of investors are attracted to ETFs. I’m not interested in buying Pendal shares, I want to go for businesses with growth potential, like Bubs (ASX: BUB).
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