Perpetual vote tests mood after fund manager’s humble year

afr.com:

It is less than a month until funds management group Perpetual is due to hold its annual meeting. And, as is customary, its chairman Tony D’Aloisio has been quietly meeting investors and proxy advisers to gauge the mood, and the critical votes on remuneration and director elections.

This year, it’s more personal than usual. D’Aloisio, who has chaired the board since 2017, was last reappointed in 2020, so he is up for re-election. This is set to be his third and final term at Perpetual.

The active question is this: will some shareholders vote against D’Aloisio’s re-election to send a message about their frustration around the growth-by-acquisition strategy (now officially over) that his board has led?

Perpetual chairman Tony D’Aloisio is up for re-election at this year’s annual meeting. Steven Siewert

Even with the backdrop of its listed peers Magellan Financial Group and Platinum Asset Management struggling against industry-wide pressures and their own specific problems, Perpetual’s challenges with its M&A-led strategy stand out.

Some see the group’s acquisition strategy as the industry’s cautionary tale.

“Perpetual should be for Magellan a warning sign for what happens to fund management companies that see acquisition as part of their future,” says Sandon Capital’s founder and chief investment officer Gabriel Radzyminski.

Nine months from inking the controversial $2 billion acquisition of rival investment group Pendal, Perpetual is yet to convince the market it made the right move. Of course, bedding down acquisitions can take time, and it hasn’t yet been a full year.

But it’s hard to look past the fact that its shares closed on Friday at $20.64, well below the $33 level private equity firm EQT and hedge fund Regal