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Highlights

  • Funds under management (FUM) fell to $9.6 billion in April from $10.3 billion in March due to $243 million in net outflows.

  • A $958 million institutional mandate termination expected to further impact FUM in May.

  • Shares dipped 1.1% in early trade; cost-saving measures to be accelerated to offset profit hit.

Platinum Asset Management (ASX:PTM) shares came under pressure on Tuesday after the investment firm reported a further decline in funds under management (FUM) and warned of a significant drop to come in May following the loss of a major institutional client.

The Sydney-based fund manager reported $243 million in net outflows in April, with the Platinum Trust Funds contributing the bulk of the withdrawals. As a result, the firm’s FUM dropped to $9.6 billion at the end of April, down from $10.3 billion a month earlier.

Platinum’s shares slid 1.1% to 66 cents in early ASX trading following the update.

Larger Hit Expected in May

The company warned that next month’s figures are likely to reflect an even sharper decline in assets under management, after a major institutional client served notice to terminate a $958 million mandate.

“The impact to profit of the related loss of revenue will be offset by an acceleration of planned cost savings to be delivered in FY26,” Platinum stated, attempting to reassure investors about margin management despite declining revenue.

The development is the latest in a string of setbacks for Platinum, which has been grappling with persistent client outflows and declining profitability amid underperformance in recent years. The fund manager reported a 55% drop in first-half net profit in February, adding to investor concerns.

Merger Talks in Play

Adding to the intrigue, the update comes shortly after rival investment firm L1 Capital acquired a substantial stake in Platinum. L1 confirmed it is in early discussions regarding a potential merger between the two entities.