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Key Points
- Pendal shares were thumped on Friday following the release of a funds under management update
- The fund manager recorded a $6.8 billion net outflow
- The Pendal share price is now down almost 50% over the last five years
It was a day to forget for the Pendal Group Ltd (ASX: PDL) share price on Friday.
The fund manager's shares were the worst performers on the S&P/ASX 200 Index (ASX: XJO) with a decline of 16% to $5.00.
Things were even worse during intraday trade, with the Pendal share price falling as much as 20% to a 52-week low of $4.73.
Why was the Pendal share price sold off?
Investors were selling down the Pendal share price on Friday following the release of its funds under management (FUM) update for the first quarter of FY 2022.
According to the release, Pendal's funds under management (FUM) fell 2.5% to $135.7 billion during the quarter. This was despite the company recording a $3.8 billion boost to its FUM from a combination of investment performance, market movements, and distributions.
The $6.8 billion net outflow was driven largely by its European operations, which recorded a sizeable $5.5 billion outflow. This was driven by two notable redemptions from segregated mandates by UK institutional clients during the quarter.
It wasn't just shareholders that were disappointed with this performance. The company's CEO, Nick Good, acknowledged that the quarter was a disappointing one. Though, unlike the shareholders that sold today, he appears optimistic that things will improve.
Mr Good commented: "It has undoubtably been a disappointing quarter in terms of our flows. However, we are responding with a clear set of actions and have delivered strong performance fees in line with those recorded in the prior year."
"Pendal continues to invest in distribution in key target markets, is working closely with fund managers to strengthen investment performance, and has launched new impact and thematic products that are quickly gaining traction and meeting the changing needs of clients. We remain committed to bringing investment excellence to our clients over the full market cycle," he added.
The Pendal share price is now down by almost 50% over the last five years.
