Platinum Capital’s Manager Change Signals Urgent Response to Performance Challenges
Platinum Capital Limited’s 2025 AGM marked a pivotal shift as shareholders approved replacing Platinum Investment Management with L1 Capital, aiming to revive the company’s challenged investment performance.
- 2025 statutory pre-tax profit of $13.9 million and 6.5% grossed-up dividend yield
- Investment performance lagged with 3.4% pre-tax NTA return vs 18.4% MSCI benchmark
- Shareholders approved L1 Capital as new investment manager, replacing Platinum
- Independent Board Committee recommended L1 Capital’s proposal over Wilson Asset Management
- Company initiated on-market share buy-back to reduce discount to net tangible asset value
Financial Year 2025 in Review
Platinum Capital Limited (PMC) reported a statutory pre-tax operating profit of $13.9 million for the financial year ended 30 June 2025, alongside a fully franked dividend yield of 6.5%. Despite these solid headline figures, the company’s investment performance remained underwhelming, delivering a pre-tax net tangible asset (NTA) return of just 3.4%, significantly trailing the 18.4% return of the MSCI All Country World Net Index in Australian dollar terms.
Strategic Review and Managerial Shake-Up
The underperformance prompted a strategic review and a series of consequential events. After a failed scheme of arrangement with the Platinum International Fund Active ETF, PMC embarked on an on-market share buy-back program to provide liquidity to shareholders amid a persistent discount to NTA. More notably, the company received competing non-binding proposals from L1 Capital Pty Ltd and Wilson Asset Management Limited to replace Platinum Investment Management Limited as the investment manager.
Following a shareholder meeting in October 2025, the nominees from L1 Capital were appointed to the board, and an Independent Board Committee (IBC) was formed to impartially assess the competing proposals. The IBC’s comprehensive evaluation considered investment strategy, historical performance, fees, governance, and execution risks, ultimately concluding that L1 Capital’s proposal offered a superior outcome for shareholders.
Shareholder Approval and Future Outlook
At the 2025 AGM held on 28 November, shareholders overwhelmingly supported resolutions to terminate the existing management agreement with Platinum Investment Management and to appoint L1 Capital as the new manager. They also approved changing the company’s name to L1 Global Long Short Fund Limited and amending the constitution accordingly.
L1 Capital plans to transition the portfolio to a global long short investment strategy within approximately one month of the manager change, involving the sale of existing holdings and redeployment of capital. The company may also consider a capital raising to support this transition and future growth, subject to market conditions.
Governance and Board Dynamics
The current board comprises three independent non-executive directors and two non-independent directors, including Chair Rachel Grimes. The IBC, chaired by Katrina Glendinning, played a critical role in ensuring a fair and transparent assessment process, supported by independent legal advice from Gilbert + Tobin and external financial advisers.
The AGM also saw strong shareholder support for routine matters such as the adoption of the remuneration report, re-election of directors, and an increase in the non-executive directors’ fee pool, reflecting confidence in the board’s stewardship during this transition.
Bottom Line?
With shareholder backing secured, all eyes now turn to L1 Capital’s execution of its new strategy and whether it can close the gap on PMC’s long-standing discount to net tangible asset value.
Questions in the middle?
- How will L1 Capital’s global long short strategy perform in volatile markets?
- What are the risks and costs associated with the portfolio transition and potential capital raising?
- Will the share price discount to NTA narrow meaningfully under the new management?
