Perpetual Limited investors head for the exits

The Perpetual Limited (ASX:PPT) share price may come under pressure in 2016.

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Australian equities fund manager Perpetual Limited (ASX: PPT) today announced net fund outflows of $400 million for the quarter ending March 31 2016, including $100 million in outflows from the Australian equities channel.

Overall funds under management (FUM) were down $1.1 billion for the quarter, as market falls shaved another $700 million off total FUM, which stood at $29.8 billion at quarter end.

What may have worried some investors are some of the recent calls by the group's equities team that include an estate agent, free-to-air television broadcaster, department store operator, and personal injury law firm. Let's take a look at some of them.

McGrath Ltd (ASX: MEA) shares fell 30% today and are down around 45% since February when Perpetual bought up 11.56% of the estate agency. By March 2016 Perpetual had increased its stake to a substantial 13.23% – just in time for today's huge price falls. Real estate agents are hardly a classic share market investment and the price falls come as little surprise to many.

Shine Corporate Ltd (ASX: SHJ) shares plummeted around 75% in a single day in January 2016 just after Perpetual had disclosed a 5.01% stake in the personal injury law firm in December 2015.

Nine Entertainment Co Holdings Ltd (ASX: NEC) shares fell around 25% in a single day in April after Perpetual had built a substantial 10.39% stake in the television broadcaster by March 2015. The tough outlook for free-to-air TV due to the fast-rising competition from online and new media is no secret as the sector continues to experience falling advertising revenues.

Myer Holdings Ltd (ASX: MYR) shares fell nearly 30% in a single day in September 2015 at a time when Perpetual held about 9.79% of the department store. If you're ever out shopping and want to escape the crowds a good tip is to head into a department store operated by Myer. However, Perpetual remains a big backer of the department store as it fights rising competition from overseas fast-fashion rivals and the rise of online shopping.

As at March 31 2016 Perpetual's Wholesale Industrial Share Fund had lost 27.15% of its value over the past year, while the Australian Share Fund had lost 22.8% of its value.

Given some of the embarrassing returns recently, it's no surprise FUM is heading out the door again.

In fact, total group FUM of $29.8 billion is only marginally ahead of group FUM of $27.7 billion recorded on July 31 2010, nearly six years ago!

Over the past 10 years Perpetual shares are down 38% and today's news of quarterly outflows doesn't do much for the outlook.

Don't fancy Perpetual shares?

Motley Fool contributor Tom Richardson has no position in any stocks mentioned. You can find Tom on Twitter @tommyr345 The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on ⏸️ Investing

Close up of baby looking puzzled
Retail Shares

What has happened to the Baby Bunting (ASX:BBN) share price this year?

It's been a volatile year so far for the Aussie nursery retailer. We take a closer look

Read more »

woman holds sign saying 'we need change' at climate change protest
ETFs

3 ASX ETFs that invest in companies fighting climate change

If you want to shift some of your investments into more ethical companies, exchange-traded funds can offer a good option

Read more »

a jewellery store attendant stands at a cabinet displaying opulent necklaces and earrings featuring diamonds and precious stones.
⏸️ Investing

The Michael Hill (ASX: MHJ) share price poised for growth

Investors will be keeping an eye on the Michael Hill International Limited (ASX: MHJ) share price today. The keen interest…

Read more »

ASX shares buy unstoppable asx share price represented by man in superman cape pointing skyward
⏸️ Investing

The Atomos (ASX:AMS) share price is up 15% in a week

The Atomos (ASX: AMS) share price has surged 15% this week. Let's look at what's ahead as the company build…

Read more »

Two people in suits arm wrestle on a black and white chess board.
Retail Shares

How does the Temple & Webster (ASX:TPW) share price stack up against Nick Scali (ASX:NCK)?

How does the Temple & Webster (ASX: TPW) share price stack up against rival furniture retailer Nick Scali Limited (ASX:…

Read more »

A medical researcher works on a bichip, indicating share price movement in ASX tech companies
Healthcare Shares

The Aroa (ASX:ARX) share price has surged 60% since its IPO

The Aroa (ASX:ARX) share price has surged 60% since the Polynovo (ASX: PNV) competitor listed on the ASX in July.…

Read more »

asx investor daydreaming about US shares
⏸️ How to Invest

How to buy US shares from Australia right now

If you have been wondering how to buy US shares from Australia to gain exposure from the highly topical market,…

Read more »

⏸️ Investing

Why Fox (NASDAQ:FOX) might hurt News Corp (ASX:NWS) shareholders

News Corporation (ASX: NWS) might be facing some existential threats from its American cousins over the riots on 6 January

Read more »