The Perpetual Limited (ASX: PPT) share price pared earlier gains this morning after the ASX-focused equities manager revealed it recorded $1.9 billion of net fund outflows over the quarter ending March 31, 2019.
The total included the loss of a $1.3 billion mandate from a single Australian equities client in a result perhaps related to some disappointing investing returns from the manager.
The one positive for Perpetual is that equity markets enjoyed a strong quarter with its total funds under management only decreasing by $300 million over the period, as $1.6 billion in market appreciation offset the majority of the $1.9 billion in net outflows.
Losing a mandate is not especially unusual for a mid-sized fund manager and can happen for any number of reasons, but this doesn't disguise the fact that Perpetual has a long track record of not being able to win sufficient new institutional mandates to offset any lost mandates.
This is in part due to mixed investment performance, but also due to seemingly inadequate business development planning.
Overall this is another bad operating update from Perpetual with the stock at $42.35 actually trading at June 2002 levels to mean it has gone nowhere in 17 years.
This despite the tailwinds of rising equity markets and Australia's exponentially increasing pool of superannuation funds looking for a home.
Given its track record, among other things, Perpetual is not an investment grade business in my opinion.
In the asset management space I'd prefer Macquarie Group Ltd (ASX: MQG) or Magellan Financial Group Ltd (ASX: MFG) thanks to their international exposure and track records.
While investors chasing a bit more growth in exchange for additional risk could even look to small-cap Australian Ethical Investments Ltd (ASX: AEF).
