Perpetual motion

INVESTORS have flocked back to financial services company Perpetual on news that the high-profile fund manager Rob Adams has been appointed as chief executive.

Shares in the 132-year-old wealth, investment and trustee company jumped more than 5 per cent in intra-day trade yesterday after the announcement the former Janus Henderson and Challenger executive would take the top job in September.

Analysts said investors would pin their hopes on Mr Adams’ ability to stem cash outflows from the company’s funds-management businesses.

Perpetual suffered a big share price fall during the past year, including a 21 per cent slump in the past three months, as outflows mounted and investors reacted to negative revelations at the financial services royal commission, and industry-wide pressure to lower fund management fees.

“Mr Adams is an exceptional leader with three decades of local and global experience in financial services including funds management, financial advice and fiduciary services,” Perpetual chairman and former Australian Securities and Investments Commission chairman Tony D’Aloisio said yesterday.

“Rob brings to Perpetual’s people, clients, shareholders and stakeholders a track record of leading successful teams and diligently building and growing businesses organically and through acquisition.” Mr Adams will start on a base salary of $1.3 million and collect a $900,000 sign-on bonus in Perpetual shares. He could earn a further 175 per cent of his base salary — $2.3 million — in annual bonuses.

Outgoing chief executive Geoff Lloyd resigned last year and leaves the job on June 30, after six years in the position.

Perpetual reported a fall of $2.6 billion in funds under management to $30.2 billion in the three months to March, its latest quarterly update shows.

This included a $1.3 billion decline in asset values and $1.3 billion net outflows.

In its recent six month performance to December 2017, Perpetual reported net profit of $68 million, up 3 per cent.

However, its biggest division, funds management, reported a 1 per cent fall in contribution to pre-tax profit of $58.1 million.