Why Perpetual’s Corporate Trust Growth Masks Asset Management Challenges
Perpetual Limited’s second quarter FY26 update reveals a mixed performance with strong Corporate Trust growth balancing net outflows in Asset Management, while Wealth Management remains stable amid ongoing sale talks.
- Corporate Trust assets under administration grow 2.1% to $1.31 trillion
- Asset Management AUM declines 1.9% to $227.5 billion due to net outflows and currency headwinds
- Wealth Management FUA stable at $21.9 billion amid advanced sale negotiations with Bain Capital
- Performance fees of $10 million expected in first half FY26
- Expense growth tracking below 2-3% guidance with significant items between $54m-$63m post-tax
Mixed Fortunes Across Divisions
Perpetual Limited’s latest quarterly business update for the period ending 31 December 2025 paints a nuanced picture of its financial services operations. While the Corporate Trust division demonstrated robust growth, the Asset Management segment faced challenges from net outflows and adverse currency movements, leading to a modest decline in assets under management (AUM). Meanwhile, Wealth Management held steady despite ongoing negotiations for its sale.
CEO Bernard Reilly highlighted the quarter’s contrasts, “Corporate Trust performed strongly across all segments, while Asset Management experienced net outflows. Wealth Management remained stable even as we progress the sale process.”
Asset Management Under Pressure
Perpetual’s Asset Management AUM slipped 1.9% to $227.5 billion, down from $232 billion in the prior quarter. This decline was primarily driven by net outflows of $7.8 billion and currency headwinds amounting to $2.1 billion, partially offset by positive market movements of $5.4 billion. Notably, Barrow Hanley and J O Hambro Capital Management (JOHCM) both saw net outflows and currency impacts, while Pendal Asset Management reported mixed flows with net inflows excluding cash.
On a brighter note, Perpetual’s own boutique asset management business attracted $0.2 billion in flows to its new Diversified Income Active ETF and successfully raised $0.3 billion for its Credit Income Trust. However, international boutiques such as Barrow Hanley and TSW faced outflows, reflecting ongoing client reallocations and mandate losses.
Corporate Trust and Wealth Management Stability
Corporate Trust’s assets under administration (FUA) grew 2.1% to $1.31 trillion, driven by growth in Residential Mortgage-Backed Securities and Managed Fund Services, including expansion in Singapore and digital asset administration platforms. This division’s resilience provides a counterbalance to the Asset Management pressures.
Wealth Management’s FUA remained steady at $21.9 billion, with average FUA slightly increasing. The business is currently in advanced negotiations with Bain Capital Private Equity regarding a potential sale. While progress is significant, no binding agreement has yet been reached, and Perpetual plans to update the market alongside its half-year results in February.
Financial Outlook and Performance Fees
Perpetual expects to recognise $10 million in performance fees for the first half of FY26, mainly from J O Hambro and Perpetual Asset Management strategies. Expense growth is tracking favourably below the company’s 2-3% guidance, aided by currency movements and controlled underlying costs. Significant items post-tax are anticipated between $54 million and $63 million, with no impairments expected.
The company’s half-year financial results will be announced on 26 February 2026, providing a fuller picture of its financial health and the progress of the Wealth Management sale.
Bottom Line?
Perpetual’s next half-year results will be pivotal in clarifying the impact of asset flows and the Wealth Management sale’s outcome.
Questions in the middle?
- Will Perpetual secure a binding agreement for the Wealth Management sale with Bain Capital?
- How will ongoing net outflows in key Asset Management boutiques affect future earnings?
- What strategies will Perpetual deploy to mitigate currency risks impacting AUM?
