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.
In November a spanner was thrown into the works after Regal Partners and BPEA EQT Fund proposed a take over of Perpetual which was rejected, followed by another rejected proposal a week later.
Unlike the proposed takeover of Perpetual, the takeover of Pendal had support from the company itself with Pendal Australia chief executive Richard Brandweiner confirming his support.
“Since then – despite what you may have read in the press – Pendal and Perpetual have been working together constructively to finalise the details of this proposal,” he said.
Adams noted as a publicly listed company there is often plenty of commentary and speculation.
“For Perpetual it’s important to look through the noise – the rationale behind the transaction is sound and the industrial logic is clear,” Adams said.
Perpetual announced its updated executive team at the end of November. Separate to those changes was the resignation of head of equities Paul Skamvougeras who has been succeeded by Vince Pezzullo.
