Pendal Group has reported a decline in funds under management (FUM) over the September quarter to $104.5 billion, down from $111.0 billion in the previous quarter.
During the last quarter of its financial year, CEO Nick Good said that Pendal’s FUM was negatively impacted by falling asset prices and fund outflows in the US. These falls were offset by net inflows across Europe, the UK and Asia (EUKA) and the stronger US dollar.
“The September quarter saw a continuation of strong market volatility with rising energy prices and concerns about potential inflation-induced recessions in major economies dominating investor sentiment,” Mr Good said.
“In addition, ongoing geopolitical uncertainty led to the lowering of global growth expectations. As a result, the MSCI All Countries World Index (local currency) declined by approximately 5 per cent over the quarter.”
In Australia, Pendal reported net outflows of $0.3 billion for the September quarter and a $1.1 billion fall in FUM to $28.5 billion.
These outflows included the sale of Westpac’s life insurance business to TAL Dai-ichi Life Australia in August. Pendal noted that FUM was substantially retained with TAL Life Insurance Services via a new fixed-income mandate.
Positive flows were seen across most asset classes in the wholesale channel in Australia, which the investment manager said was a “pleasing outcome given the market environment”.
A “notable investment” from a UK-based institutional client in Pendal’s global opportunities strategy helped to drive net inflows of $1.4 billion in the EUKA region over the quarter.
The firm said that flow trends in the OEICs saw an improvement, with inflows into impact and sustainable strategies that were offset by outflows in European and UK strategies.
Meanwhile, Pendal suffered outflows of $2.1 billion in the US, primarily due to the $1.5 billion in net redemptions in the US pooled funds as clients reduced their exposure to growth-oriented international assets.
Positive flows into Thompson, Siegel & Walmsley’s (TSW) US equities and multi-asset strategies were said to have been offset by outflows in international equities.
In an update on its acquisition by Perpetual, Pendal said that the two firms were working towards finalising the scheme booklet which is set to be dispatched next month.
While noting that timing remains subject to change, Pendal currently expects to hold a scheme meeting in December with implementation of the scheme set for January next year.
“The process to satisfy conditions precedent, including regulatory approvals and client consents, is also progressing well and in line with expectations,” the firm added.
Pendal is due to hand down its full-year financial results on 4 November.
