Loss Highlights Importance of Performance and Vulnerability of Institutional Money for Platinum

Platinum Asset Management's funds under management, or FUM, was modestly lower at the end of March 2016, down AUD 78 million to AUD 24.74 billion. With the MSCI in Australian dollars down 0.3% during the month this is not surprising, but with most funds, and in particular the Platinum International Fund up 0.9% in the month, it implies that the asset manager incurred modest outflows. What is more disappointing is the announcement of a lost institutional mandate. Platinum has been advised that during April 2016 a U.S.-based institutional client intends to terminate an AUD 1 billion account. This will reduce FUM by 4% to AUD 23.74 billion, but as it earns a lower base management fee on institutional FUM, the outflow will have a smaller impact on revenue.