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Key Points
- Pendal had a disappointing quarter and reported net fund outflows of $6.8 billion
- The fund manager's FUM fell 2.5% to $135.7 billion during the December quarter
- JOHCM performance fees are expected to be marginally higher year on year
The Pendal Group Ltd (ASX: PDL) share price is on course to end the week in the red.
In morning trade, the fund manager's shares are down 6% to $5.58.
This means the Pendal share price is trading withing sight of its 52-week low of $5.40.
Why is the Pendal share price sinking?
The weakness in the Pendal share price on Friday has been the release of its latest funds under management (FUM) update.
According to the release, at the end of the December quarter, Pendal's FUM stood at $135.7 billion. This was down 2.5% since the end of September despite receiving a $3.8 billion boost from favourable market movements.
During the three months, Pendal reported a $6.8 billion net fund outflow. This was driven by weakness across its Australian funds and outflows of $5.1 billion from its segregated mandates in Europe.
Pendal also provided an update on its JOHCM performance fees for the 12 months ended 31 December. It revealed that performance fees totalling $43.4 million were realised for the period, up marginally from $41.2 million a year earlier.
"A disappointing quarter"
Pendal's Group CEO, Nick Good, wasn't pleased with the company's fund flows during the quarter.
He said: "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.
