Pendal (ASX:PDL) posts fall in FUM in June quarter, shares in red

Highlights:

• During the June quarter, Pendal’s funds under management dropped to AU$111.0 billion from AU$124.9 billion in March quarter.
• Pendal’s CEO stated that sustained market challenges have dragged FUM down during the quarter.
• Post this announcement, the share price of Pendal has dropped by over 8% during the early trading hours on Friday (15 July 2022).

Global asset manager, Pendal Group Limited (ASX:PDL) on Friday (15 July 2022) shared its funds under management (FUM) for the quarter ending on 30 June 2022. During the quarter, the FUM of Pendal has come down from AU$124.9 billion (March 2022) to AU$111.0 billion.

Pendal’s shares were spotted 8.58% lower from its previous close during today’s early trading hours. The shares were quoted at AU$3.73 per share at 10:27 AM AEST. Including today’s fall, the share price has dropped by over 15% in the last five trading sessions. On a year-to-date basis, the shares have sunk by over 35%. Pendal’s share price has fallen by more than 54% in a year, recording a fall of 30% in the last six months alone.

The benchmark index, ASX 200 Financials (INDEXASX:XFJ) was down by approximately 2% around the same time.  

Pendal’s FUM during the June quarter

Image source: © Amarosy | Megapixl.com

According to today’s release, all the geographies of Pendal reported a fall in its FUM. In Australia, FUM dropped by 14.20%, in EUKA (Europe, UK &Asia) by 8.52% and in the USA by 12.06%.

Image source: Copyright © 2022 Kalkine Media ®

Nick Good, CEO, Pendal, said the company witnessed sustained market challenges during the June quarter. The challenges listed by Good are:

• An increase in the inflation worries resulted in a rise in global equity market volatility,
• Geopolitical tensions in the global market,
• Fears of an economic recession are mounting after the major central banks announced aggressive tightening measures.

Good said that all these factors resulted in client caution, and in the end, it resulted in fund redemption.

What’s the plan ahead for Pendal’s CEO?

Good said, considering the existing market conditions, the company would remain flexible and prudent in managing costs. Also, the company would focus on developing and strengthening its strategic growth areas. It comprises the development and expansion of global distribution capabilities, adapting the product offerings to ensure their relevance for the present and future clients and streamlining the global operating platform of the company.

Major events that took place in the June quarter

Nick Good highlighted that the flow trends improved in the quarter. St. James’s Place continuously invested in the Global Opportunities strategy, and the company expects to see an additional AU$1.3 billion investment in the September quarter.

Pendal said it had realised the Australian performance fee for the year ended 30 June 2022. With this, the company generated revenue of AU$5.4 million.