Platinum Asset Management Limited (ASX: PTM) is the management company behind an extensive range of regional and specialist funds. Revenue is derived from both standard and performance fees. With the gradual easing of the GFC most funds have enjoyed a good year to April 2014 – International (+ 29%); Europe (+ 32.2%); Technology (+ 30.8%); Healthcare (+ 28.3%); Japan (+ 19.8%); Asia (+ 15.5%) and International Brands (+ 20.1%) – please be aware these one year performances are exceptional. Platinum doesn’t invest in Australia.
Platinum Asset Management isn’t interested in fashionable or over hyped stocks / trendy market theories, preferring to focus on neglected situations at a value price – which is what astute asset management is all about. Therefore you can’t expect Platinum to just track the markets; however their long-term outperformance record clearly demonstrates the benefit of their individualist and considered approach.
Outside of resources and a sprinkling of industrial companies Australia is a bit player on the world scene. As a result it’s difficult to get adequate investment exposure to major developments in technology or medical research, not to mention the benefits of superior scale in many routine industries.
In addition countries and regions grow or contract at different rates giving a canny investor the opportunity to buy or sell at different stages of economic and market cycles; whereas a domestically focused investor is basically at the mercy of local economic activity.
Looking ahead to FY 2015, Platinum Asset Management ($6.38) is selling at 17.2 times projected earnings and a 5.2% fully franked yield. In my view this is a reasonable price for a share with upside potential (the figures do not include any allowance for performance fees). In addition moves are underway to organise institutional distribution in the UK, Europe and possibly the US.
Management and staff hold 60% of this company ensuring alignment with the interests of other shareholders. Being a management company an investment in Platinum Asset Management is not a direct investment into the specialist funds it operates and these are also worth looking at.
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Motley Fool contributor Peter Andersen owns shares in Platinum Asset Management