Pendal recently made some sizeable acquisitions, and, for a fund manager, being able to retain the newly acquired funds is always a challenge.

More broadly, the fund managers (from Platinum, to Magellan, to Pedal) are seeing pressure on net outflows, as a result of increasing allocations to lower cost, easily implementable passive vehicles.

From the Pendal AGM, it looks like this is set to continue, with a couple of chunky redemptions identified below.

Pendal attempt to point out that this won’t materially impact FY22 earnings, but it clearly does not help them.

All of the listed managers have suffered some fairly dramatic pullbacks, PDL is no exception. We are constructive on the fund managers at these prices , preferring PTM, which is a Value + Emerging market play, and has a DAA overlay that provides portfolio protection in the event of a market sell-off, which we find attractive. However PDL is also attractive and offers quite a different set of factor premia, geographic drivers, and macro factor premia.

Important Information: This document has been prepared by Aequitas Investment Partners ABN 92 644 165 266 (“Aequitas”, “our”, “we”), a Corporate Authorised Representative (no. 1284389) of C2 Financial Services, (Australian Financial Services Licensee no. 502171), and is for distribution within Australia to wholesale clients and financial advisers only.

This document is based on information available at the time of publishing, information which we believe is correct and any opinions, conclusions or forecasts are reasonably held or made as at the time of its compilation, but no warranty is made as to its accuracy, reliability or completeness. To the extent permitted by law, neither Aequitas nor any of its affiliates accept liability to any person for loss or damage arising from the use of the information herein.

Please note that past performance is not a reliable indicator of future performance.

General Advice Warning: This document has been prepared without taking into account your objectives, financial situation or needs, and therefore you should consider its appropriateness, having regard to your objectives, financial situation and needs. Before making any decision about whether to acquire a financial product, you should obtain and read the relevant Product Disclosure Statement (PDS) or Investor Directed Portfolio Service Guide (IDPS Guide) and consider talking to a financial adviser.

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