Platinum Asset Management shares are down 5.2 per cent this morning to $3.22, the lowest they have been since November last year, following a trading update that showed continuing underperformance, according to a note released by Credit Suisse analysts James Cordukes and Marco Vissers.

They re-iterated their ‘underperform’ rating and dropped their price target from $3.30 to $3.20.

The trading update for the first quarter of 2022-23, July to September, showed funds under management were at $22.8 billion, down 3 per cent on the previous quarter. This was due to outflows of $386 million, most of that in September.

“Platinum Asset Management has reported its 34th consecutive month of outflows and over the three years to September 2021 outflows have totalled $6.7 billion, equivalent to 25-30 per cent of its assets under management, ” the analysts wrote in a note to clients.

Platinum’s International Fund and Asia Fund saw the biggest outflows, including an institutional client pulling $100 million from the Asia Fund.

“With lacklustre fund performance, a recent portfolio manager departure (who has started a competing fund) and Platinum’s longevity in the Australian retail market (more exposed to legacy platform outflows, customers in later stages of the customer lifecycle are more likely to withdraw funds), we expect outflows to continue for some time.”

In late 2020 Joseph Lai resigned as the Asia Fund portfolio manager and has since emerged as the fund manager of Ox Capital Management. Customers may also have been spooked about reports of Evergrande Financial’s position and fears of financial risk spreading among Asian property developers.

The Credit Suisse team expect to see more fund outflows, which would lead to lower earnings. While Platinum’s International Fund has outperformed benchmarks by 250 basis points in September, its long-term performance over one, three, and five years was below benchmarks.