Rob Adams

Having a star manager can be a benefit for a fund but they are at constant risk of being a victim of their own hype, according to Perpetual chief executive Rob Adams.

Speaking at the Professional Planner Researcher Forum, Adams was asked whether the cult of personality some fund managers cultivate for themselves ever affected him.

“If any individual within a business starts believing in their own ‘hype’ it can get to the point where they become a negative influence on the business,” Adams said during a fireside chat with Conexus Financial managing editor Julia Newbould.

In addition to leading Perpetual for the last four years, he has also held leadership roles at Janus Henderson, Challenger and First State Investments over the last couple of decades.

“With fund managers, specifically, you definitely need balance,” Adams said. “Typically, you need personalities to make the big calls.”

The best fund managers are passionate about what they do, he said.

“I’ve often found many are introverted by nature but they do have this personality trait that can come out at the right time and the right way,” Adams said. “If the story of the ‘star manager’ becomes ‘the’ story then that’s a riskier play.”

Reflecting on running a publicly listed company, Adams highlighted the pros and cons.

“Someone said to me many years ago you only list a company for two reasons: ego or capital; I certainly don’t need the ego,” Adams said.

“As a publicly listed company you do get opportunities – that’s the environment we’re in and, if there are ways to improve shareholder and investor return while still providing for our clients, we will take those opportunities.”

Constant motion

In early April, Perpetual launched a $2.4 billion takeover bid for competitor Pendal, which was later finalised (pending shareholder approval) in late August.

Pendal shareholders will receive one Perpetual share for every 7.5 Pendal shares $1.97 per share which will be reduced by any final dividend paid out.

The offer implies a price of $6.02 for each Pendal share based on the closing share price of Perpetual on 24 August of $30.30.