Adams vowed not to make any changes to staff or investment teams within Pendal,and rather “preserve,protect and promote independence”.
“That’s the asset you’re buying. It would be lunacy to want to change any of that,” he said.
Before completion of the deal,the chief executives of both companies travelled around the world to meet fund managers across the business. Both said that they had been supportive of the transaction,but Adams acknowledged there could still be some staff uncertainty.
“Success and failure in acquisitions generally,particularly in people-led businesses like asset management businesses,come down to culture at the end of the day. And so to have been able to test that through this process,has been terrific and gives us a high degree of confidence,” he said.
“Now,of course,whenever there’s change,that creates some uncertainty,but it’s our job to really minimise that.”
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Pendal’s Nick Good said the engagement they had with Perpetual since the April offer had shifted their view of the deal,as well as the 18 per cent improvement on the cash portion of the offer.
“Both organisations have been wrestling with the same thing,which is that ultimately we believe that the best way to deliver improved returns for our clients is through a boutique structure of smaller teams with investment independence,yet against that we’re in an industry where scale matters ... how do you bring those two essentially contradictory positions together?” he said.
“I think that’s what we achieved with this,we maintain that investment independence,we maintain that boutique nature,but we also leverage without becoming huge,we leverage the strength of a slightly larger footprint that will allow us to compete more effectively,globally.”
MST analyst Lafitani Sotiriou said in a note that “after a lot of bluff and bluster”,the deal was good for both firms,with synergies upgraded from $50 million to $60 million.
UBS analysts said there did not appear to be a Perpetual shareholder vote,which would increase the likelihood of the transaction closing. They said there was still the risk of outflows for Pendal,and noted longer-term they remained “sceptical on asset manager mergers”.
Perpetual’s underlying profit after tax for the 2022 financial year was up 21 per cent to $148.2 million,and revenue was up 20 per cent to $767.7 million. A final dividend of 97 cents per share will be paid on September 30,resulting in a total dividend for the year of $2.09,a 16 per cent increase on the year before.
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