PTM - Platinum Asset Management

[edison]

Anyone subscribing to this? Looks like it is going to be a real winner if people get allocation before the float.

Comsec just announced that their Broker Allocation Offer is CLOSED, one day after it was opened. It is quite an amazing response, consider that there was a limit of 4000 shares per customer (or per HIN).

I applied for 4000 shares (20K worth) via Comsec yesterday but not sure if it will be scaled back or if I will be sucessful.

What do people think the share price on the listing day will be? Current consensus on the market is $6.50.

[David Hardman]

I've heard $7-8

Will be a screamer.. Getting an decent allocation will be the tough part

[SEC]

quote:Originally posted by Z_Man

I've applied for a couple of lots,


I've just applied for lots!

The forecast financials compare very well with listed peers on the ASX
- AMP, AXA, Australian Wealth Management (AUM), IOOF (IFL), Challenger (CGF) and Perpetual (PPT).

An analysis of forecast eps and dps for FY07 for listed fund managers are summarised as follows:

<pre id="code">
Price 26/04 PE07 yield07
AMP $10.95 21.4 4.0%
AUW $2.38 21.6 3.7%
AXA $7.65 21.3 3.1%
CGF $5.37 18.3 2.0%
IFL $10.05 21.7 3.9%
PPT $80.45 22.5 4.5%
Average 21.1 3.5%

PTM $5.00 15.5* 5.3%#
</pre id="code">

*Based on FY07 NPAT excl IPO costs.
#Based on 90% NPAT payout for FY07.

As you can see, the IPO price is set at a significant discount to its peers. Challenger also trades at a discount but that is probably because it pays a lousy dividend.

A couple of small negatives that may see PTM trades at a small discount:

1. Liquidity. Only 20% of stock is available for the IPO. May take a while to get included in various indices.
2. No escrow period. Staff may offload their remaining stakes basically as they please (except for blackout periods like prior to profit announcements). This could be a good thing so long as it is done in an orderly fashion (eg BNB) since it will improve liquidity.

All in all $5.00 is a good IPO price if you can get an allotment, and an opening price of $6 - $6.50 sounds fair. Any more and it could be a good stagging opportunity.

SEC

[edison]

Surely PTM will be opening in a significant premium compared to the rest of the fund manager's sector, Since the institutions (especially the index fund managers) gets NOTHING for the float? They would probably have to fight in the market to get their shares, and they probably want large quanities of them?

Whilst $6.50 opening would be good I am hoping for a opening of $7.50 (50% profit) ..... As long as I have allocations of course :)

[SEC]

quote:Originally posted by edison

Surely PTM will be opening in a significant premium compared to the rest of the fund manager's sector, Since the institutions (especially the index fund managers) gets NOTHING for the float?


Why should they scramble over stock if it isn't going to be included in an index anytime soon? Why should it list at a significant premium to the sector if its growth is similar to the sector average? On fundamentals alone $6 - $6.50 is justified but if herd mentality/greed take over then you may well get your $7.50. And a good stagging opportunity.

SEC

[thereslifeafter87]

If you're looking at fund managers SEC, HHL is probably worth a glance.

[SEC]

quote:Originally posted by thereslifeafter87

If you're looking at fund managers SEC, HHL is probably worth a glance.


I looked at Hunter Hall but couldn't find any broker forecasts.

[mark100]

I've applied for lots. I see Huntleys have valued them at a bit over $6 and the normally very conservative mob at Intelligent Investor have them as a long-term buy up to $7.50

[patsy]

quote:Originally posted by SEC

[

I looked at Hunter Hall but couldn't find any broker forecasts.



If you're with ASB or Direct, then you should be able to get the Aspect Huntley report - they have an "accumulate" recommendation with an intrinsic valuation of $15. If you want to get a copy of the PDF report, email me.

[Lawso]

PTM looks good to me. I'm happy to have a firm allocation - though only 2000 shares - through a local (Auckland) broker, cost NZD11,200 - again not too bad compared with the sickness of the NZD a few years ago.

[lucky]

Being a unit holder in Platinum funds I was sent an application form which included a unit holder number, which will have preferance over non existing investors, but they say all applications may still be subject to scalling.
There is now no public pool due to heavy demand,so if the heavy demand is still there on /after listing it should rock n roll .
I scrambled all my Ozzy funds and applied for 10,000 shares. Holdings are to be dispatched 17 May ,and trading starts 23 May, the same day I land in Cambodia. Good-luck to all applicants.

[Footsie]

patsy can you email me that report

munch_m@hotmail.com

thanks

[patsy]

quote:Originally posted by Footsie

patsy can you email me that report

munch_m@hotmail.com

thanks



Have just done so! It's either in your inbox or spam folder....:)

[brianmacm]

Patsy ,I would like a copy too
Link on DB site dont work
Cheers

[edison]

Woo Hoo! Got all my allocations as requested in my Commsec margin account.

Now I cannot wait for the opening day :)

[Footsie]

thanks pat, got them.... will look at the reports tomorrow

[SEC]

Seems like everyone who applied for PTM got their full allocation (including me).

No scale back = not much action on opening day?

SEC

[edison]

quote:Originally posted by SEC

Seems like everyone who applied for PTM got their full allocation (including me).

No scale back = not much action on opening day?

SEC


Will definitely have plenty of action. No institutional allocations, good PE and big name float. What more do we want?! Also Commsec closes the offer ONE DAY AFTER IT WAS OPENED. A lot of people have missed out.

[SEC]

quote:Originally posted by edison

Will definitely have plenty of action. No institutional allocations, good PE and big name float. What more do we want?! Also Commsec closes the offer ONE DAY AFTER IT WAS OPENED. A lot of people have missed out.


I hope you're right. It just seemed a bit too easy to get a full allotment. Put it this way, I'll be pleasantly surprised if it opens above $6.

SEC

[lucky]

you can ring platinums hot line today to find out your allocation of PTM shares; I got the 10.000 i applied for; and am somewhat surprised as there was no institutional or public allocation,although i am a unit holder, you would need to be confident that there will be plenty of interest listing on the 23rd. good luck.

[Fish Broker]

Just for your interest - I called the NZ 0800 line today - applied for 2,000 shares and got 760 shares - so hardly worth it, but then again the guy I spoke to said I was "lucky" and that many applicants got nothing at all.

I had figured since it was always going to be oversubscribed that a minimum application had a lesser chance of getting scaled, that's all I put in for. I am not an investor in the funds, so maybe that counted against me?

I guess we can always buy on listing to top up.

[COLIN]

For a negative take on this one, refer to my posting under "PMC".
I am sure I will be slated for my comments, but the facts speak for themselves.

[SEC]

quote:Originally posted by COLIN

For a negative take on this one, refer to my posting under "PMC".
I am sure I will be slated for my comments, but the facts speak for themselves.


No problem with your views Colin. I personally do not and will not invest in managed funds but will look at investing in fund managers because the whole sector is such a gravy train. Platinum at IPO price was priced at a discount to its peers, and over a longer time frame has outperformed its peers. As such it will probably trade on the market at a PE at least similar to its peers, 20 - 30% above the IPO price. Any more than that opens up a good stagging opportunity.

As for your comments re recent underperformance and the (unwarranted?) deity status of Kerr Neilson, there is a certain fund listed on the NYSE called Berkshire Hathaway that has been underperforming the market for the past nine years yet its manager still has deity status[B)].

SEC

[mark100]

Hi Colin,

My take on your posts is this:

Platinum are not just a 'long-only' fund manager. They are closer to being a hedge fund manager as they also hold short positions to protect themselves from the downside. In theory this will result in underperformance in a bull market and outperformance in a bear market.

So in my view Platinums underperformance over the past 3 years is normal and to judge their true performance you have to look at the 'full cycle'. Which is why Platinum's 10-year performance figures are so good.

This throry will be tested when this market eventually heads down (who knows when!). When this happens I would expect Platinum funds to start outperforming their 'long-only' competitors.

Like SEC, I think funds management is a gravy train and I have been lucky enough to get a good allocation in the IPO. It has been priced at a discount to its peers which in my view means the shareprice can go only one way on listing. The 80-90% payout ratio will also provide a handy yield.

Cheers

[COLIN]

Thanks for your inputs, SEC and mark100.
I agree that the issue will no doubt go to a significant premium, based to a large extent on Neilson's overall record to date and expectation of continued out-performance of most of the Funds under management, and I guess I am "biting off my nose to spite my face", but I have been taken by surprise by PMC's miserable out-turn over the past couple of years or so. Surely, if Neilson is so good, he would be better able to judge when the climate is right for going long or going short. Admittedly I had done quite well out of my holding in PMC in previous years and I naively expected the good times to continue - although I was surprised at the extent to which the shares had risen in excess of net asset backing; I put that down to the market's assessment that Neilson's shorting strategies would pay off handsomely, but they didn't.
Over recent years I have gradually pulled my investments out of managed funds. I had a significant portion there, in my earlier investing days, before I felt more confident to make my own investment decisions (I now prefer to make my own mistakes! But at least I avoid the management fees). However, I still invest in the likes of NZT and KFL (on the NZX) where very capable managers such as Carmel Fisher and Simon Botherway have been able to achieve returns well above the relative indices, on a consistent basis.

I wish every success to holders in the PTM IPO. And yes, I suppose it is somewhat surprising that Warren Buffet still retains his super-guru status.

[patsy]

Most of the Platinum funds are performing OK but the real problem is with Platinum International Fund. This has been the case over the past three to five years or so.

After having a look at the reasons why this may have been the case, my conclusion is that they have made a number of wrongly timed bets: (1) they've had a relatively high overexposure to the Japanese market, (2) a relatively low exposure to the American market, (3) overoptimistic about the sustainability of high economic growth in Japan (leading to shortening Japanese bonds), (4) an overexposure to a very volatile biotech and health industries.

However, the real "last drop" is that the size of the Platinum International Fund has become unmanageable. Plenty of studies have demonstrated the inverse correlation between fund size and performance and the International Fund is suffering such effect.

This in no way will affect the performance of PTM, at least in the short to medium term.

[Toulouse - Luzern]

The flagship Intl Fund has underperformed the index over the last three years. The PMC share chart trend is down. Some investors are disappointed at their returns from Platinum. There may be $$$ in the stock - just keep using the TA.

[edison]

So it is all set now.

Cannot wait with the listing tomorrow morning.

[Lawso]

Got confirmation today of my minimum allocation of 2000 shares @ A$5 each. Can't wait to see how PTM debuts tomorrow.

In the accompanying letter Neilson says demand was so overwhelming that the vendors increased the offer from 20% of the shares in Platinum (worth A$561m) to 25%. Even so, applications were "severely scaled back, many even to zero".

[Heavy Metal]

Well done those who got their full allocation. Sounds like existing Commsec/ASB clients got preference over unitholders. Also good to see retail holders get preference over the instos.

Shares of Platinum Asset, Favored by Soros, May Rise (Update1)

By Kevin Foley

May 22 (Bloomberg) -- Shares of Platinum Asset Management Ltd., the Australian hedge fund that won George Soros as a customer, may surge when they start trading in Sydney tomorrow.

``The price will go nuts on the first day,'' said Credit Suisse Group analyst Arjan van Veen. ``The shares were more than five times oversubscribed and no institutions were allowed on the register, so they've got to buy on-market.''

Platinum's founder Kerr Neilson, who manages $18.2 billion of international shares, has generated returns twice those of the MSCI World Index for more than a decade.

His biggest holdings at the end of April included Mosaic Co., North America's second-largest fertilizer maker, Microsoft Corp., the world's biggest software maker, and International Paper Co., the largest paper company.

New York-based Soros Fund Management LLC hired Platinum to manage global equities in 1994 and 2003, and to oversee a Japan and Korea mandate in 2003. It also held a minority stake in Platinum for 10 years from the firm's founding in 1994, according to Platinum's sale documents.

Platinum's share sale was priced at less than 14 times its estimated 2008 profit, compared with price-to-earnings ratios between 18 times and 22 times for its publicly traded competitors in Australia, according to Credit Suisse. Domestic rivals include Perpetual Ltd., AMP Ltd. and Axa Asia Pacific Holdings Ltd.

Neilson offered 20 percent of Platinum's stock in the sale, with the rest owned by himself and employees, valuing the Sydney- based company at A$2.8 billion. The firm said earlier this month it may raise the amount offered to individuals to 25 percent owing to demand.

`Huge Demand'

``There was a huge amount of demand for the stock,'' said Greg Canavan, an analyst at Fat Prophets Management Ltd. in Sydney. ``Not many people managed to get their hands on it.''

A surge in the stock price would boost Neilson's fortune, estimated at A$480 million by Business Review Weekly magazine last year.

Neilson, 57, worked at fund manager Bankers Trust before starting Platinum in 1994. His firm targets returns better than benchmark indexes, and sometimes sells securities it doesn't own but has borrowed, with a view to profiting by paying for them after the price has fallen.

The Platinum International Fund, the firm's biggest by assets, managed A$9.6 billion at the end of April, and has returned 17.4 percent a year on average since it was started in 1995, compared with 8.1 percent for the MSCI World Index.

Commonwealth Securities Ltd. and Bell Potter Securities Ltd. managed the IPO, the biggest in Australia since Boart Longyear Ltd., a drilling-services company, raised A$2.35 billion early last month.

To contact the reporter on this story: Kevin Foley in Sydney at k.foley@bloomberg.net
Last Updated: May 21, 2007 22:35 EDT

[edison]

I sold at 8.45 ..... Made a tidy profit ...

But I will definitely watching this stock for the next month or 2 ..... to see if I can buy more ...

[Lawso]

WOW!.

What to do now? - sit on my 2000, sell for a 70% profit, or buy another 2000 and average my buy price down to around 675? Decisions decisions.

[OldRider]

I see trades today in PTM, not far from double in number and value all trades on the NZX.

A dream would be to have companies like this in NZ. No reason why we can't,is there?.

[777]

Its has been a good day. Good to see the price has held up.
25,000,000 traded so far of 561,000,000 on issue. That is 4.5% but if the float was for only 25% then it means about 18% of allotted shares have traded today. Think I have got that right.

See they have hit a days high of 884 now.

[OldRider]

I noticed in the Top 20 shareholder list a Judith Neilson with about 140M shares. Presumably a connection of Kerr, and between them both probably have a fair share of the top holding of 280M as well, their profits for the day make us look a bit like amateurs.

Good luck to them both I'm happy to ride on their coat tails for a while.

[Lawso]

She's his missus. Most of the shares offered in the IPO were in her name.

[Footsie]

i was all set to buy on the open

then.....OH 8.60
NO THANKS

plenty of other fish to fry

too much froth for footsie and co.
would have been a happy buyer at 6.50 but not up here

[steve fleming]

Kerr Neilson now Australia's 3rd richest person.

Paper wealth of $3.8 billion.

[SEC]

quote:Originally posted by SEC

On fundamentals alone $6 - $6.50 is justified but if herd mentality/greed take over then you may well get your $7.50. And a good stagging opportunity.


9 bucks - you cannot be serious! Forward PE of 27, a huge premium to other fund managers. Greed has definitely taken over here. I sold out at close, $9 is just silly. Thanks Commsec, this was my best ever day on the sharemarket.

SEC

[Huang Chung]

Congratulations to everyone who was able to get in on the PTM float....I wish I could say I was one of you!

That this would make the lucky few some easy money was probably the year's biggest no brainer, but geez, 9 bucks, that's incredible!

Interestingly, Huntley's now have them as a hold.

I noticed that AXA had a great day as well, no doubt riding the PTM wave of euphoria.

Where to from here [?]

[Lawso]

quote:What to do now? - sit on my 2000, sell for a 70% profit, or buy another 2000 and average my buy price down to around 675? Decisions decisions.
I finally chose a fourth option - bought another 1000 this morning @ 870. So I now hold 3000 PTM which have cost an average of 626cps:)

[soulman]

This remind me of how BNB was floated. $5 shares opened at the mid $8.50's. I would take the money for PTM and wait for $7.50. Great sell at an even $9 yesterday if anyone here did it. Not a holder and only hear about this yesterday. Is the new IPO of Plan B (boutique fund management) is a different proposition?

Anyway, is there any general public applicants that receive allocation?

[mark100]

Hi soulman,

Yes it remainds me a bit of the BNB float as well. And look at what it did following the float. $9 looked expensive but a heap of profit upgrades and less than 3 yrs later its over $30.

Obviously BNB floated early in the bull market and PTM may have listed near the end. But it still shows that a quality business can surprise on the upside and all of a sudden it looks cheap again.

Cheers

[soulman]

Hi Mark,

Did you apply for PTM IPO and if you get allocation, was that through general public offer or through Commsec priority?

Also, BNB is in a different industry and has enormous upside, as shown in their SP for the past 2 years.

[mark100]

Yes BNB is a different industry but should the sharemarket start to wobble so will BNB (as will PTM). BNB is dependent on selling assets into listed and unlisted funds.

Do you think that funds management doesn't have enormous upside?

I got a very good allocation in the IPO

cheers

[soulman]

Yes, I think Funds Management has upside but I tend to favour AMP and Perpetual due to superannuation growth. PTM has come back a bit since listing but that is understandable due to profit taking and also the market having bad days recently. Just imagine PTM listing on the next day after they listed. I wonder how much would they have opened. They did list on the day the market was roaring.

[777]

Steady decrease in the share price of this stock. Anyone have any thoughts as to what is a good price to buy in? There must be point that they become oversold.

[777]

Thank you Z Man. Will hold what I have but resist buying more at the stage.

[777]

A continual fall back in share price in this stock.

Their last announcement was regarding the outflow and expected outflow of funds under management for September and October as one offs but this represents less than 3% of funds under management so is there another reason or is this just an over reaction.

[Lawso]

We now have two PTM threads, this one and one I started in August - "Platinum - more like lead". That has gone quiet lately while the sp has kept on falling disastrously to under $6. I can't help you, 777, but the fall seems too severe when the only explanation is a drop in FUM.

[COLIN]

Have not looked at PTM since my several posts around the time of the float. Am not surprised to see its steady decline ever since. The IPO generated totally unrealistic expectations, Kerr Neilson became a billionaire overnight, the stags did exceptionally well, but the poor unfortunate "believers" have been left holding the baby and wondering why it all went so wrong.
I became disillusioned with Platinum Capital (PMC) some time ago, have since ditched all my holdings, and won't be going near Mr Neilson again. I believe he has had his heyday. (Perhaps Ron Brierley has had his too - I have been steadily unloading GPG).

[SEC]

I've updated the peer comparison I did six months ago to determine fair value for PTM at the IPO. Average consensus 08PE for the six listed fund managers is 19, PTM trades at 17. I'm not overly surprised PTM has ended up trading at a discount since the performance of its funds has been below par in recent times. Having said that, I still think fair value is $6 - $6.50, trading at a small discount until PTM proves its credentials as a listed fund manager. I also note that the share prices of all the listed fund managers has basically gone nowhere in the past six months.

SEC

[thereslifeafter87]

PTM generally has a large short position in its funds, so if we see a market downturn they should outperform. I would see it as being a strong defensive stock.

[Lawso]

Here, for what it's worth, is ASB Securities' take on PTM, as printed in their October newsletter:
"PTM's FUM fell by cA$750m (3.4%) in Setember, including the loss of a $131m institutional mandate that is expected to withdraw a further A$487m in October. PTM's valuation is highly sensitive to FUM growth and the recent collapse and snap-back in markets has been difficult given the company's value focus. The strengthening A$ is further hampering FUM growth. However, while cautious about near-term prospects, we continue to favour PTM for the following reasons:
1. PTM's rigorous and successful investment approach is ingrained in the culture of the organisation.
2. PTM is positioned in one of the fastest growing segments of the Australian fm market (international equities) and should be considered a growth company.
3. PTM has none of the liquidity constraints that hamper growth and performance perceptions of large Australian equity managers.
4. PTM has sufficient scale to support a top quality investment team and the systems to handle FUM growth.
5. PTM has a strong long-term investment track record.
6. PTM's revenue mix has little reliance on volatile relative performance fee income. Rather the bulk of performance fee income is determined by absolute performance (i.e. earning a positive return).

Any wiser?

ASB's recommendation is: Accumulate/ Market Perform

[Huang Chung]

FUM at the end of October down over $700m from a month earlier. :(

[Lawso]

PTM down again today. 508 latest with little buying interest apparent. What a disaster, esp. for those who bought in post-float at $9 or thereabouts.

[macduffy]

There'll be a time to buy PTM but it isn't yet!

[Dazza]

i dunno eh.....

i just dunno.......

the FUM going down is not a good sign at all...

[Lawso]

There'll be a time to buy PTM but it isn't yet!

I'm looking for a time to SELL but it isn't yet!

[COLIN]

I'm looking for a time to SELL but it isn't yet!

Why, oh why, have you kept riding this one down?! The graphs say it all, even to non TA experts like me.
It took me a long time to learn a couple of basic but valuable lessons in equity investing:

1. Buy into strength, and sell into weakness.
2. Cut your losses, let profits run.

I know that these cardinal rules have been stated time and time again, but they need to be repeated ad nauseum.

[Huang Chung]

My Lordie that's a horrible looking chart!

https://secure.paritech.com/paritech_charts/ChartImg1.dll/GetGif?config=paritech&cid=1&exchange1=ASX&exchange2=ASX&exchange3=ASX&Time=1yr&Symbol=ptm&Frequency=1dy&PriceDisplay=line&PriceIndicator=none&VolumeIndicator=vol&Param1=11&Param2=31&comparisonSymbol=&comparisonSymbol2=&Height=425&Width=550&DateTime1=91120079:48:27PM

Interesting to note that Perpetual's performance of late has also been fairly dismal, but not to the same extent as PTM.

FUM 31/10/2007 30/9/2007

PTM $20.4b $21.1b
PPT $39.4b $39.5b

Amazing to think that fund managers could perform so terribly, when the market has by and large been going gangbusters. Where would they have been without compulsory super contributions boosting up their FUM?

[winner69]

Amazing to think that fund managers could perform so terribly, when the market has by and large been going gangbusters. Where would they have been without compulsory super contributions boosting up their FUM?

The underlying funds haven't been performing all that bad .... not to the extent of how PTM has performed eh.

Just poor old PTMs performance fees have taken a dive and as FUM drops the 'fixed' management fees have fallen.

PTM has a market cap of nearly $3 billion (lot higher a while ago eh) and that is the amount of clipping the ticket stuff they expect to take off those who have invested $20 billion odd jlust for looking after their money ....... just goes to show that the funds management game is really a big rort ..... a never ending source of income.

At least this is an opportunity for the man in the street to get some of this money back .... and get on this gravy train .... courtesy of the guy who generously sold out six months ago.

Wonder how many thought they were buying into a fund ... as opposed to a funds management company.

[macduffy]

Still not the time to buy PTM but here's hoping some of those disappearing FUM are ending up with AUW!

Disc: Hold AUW

[winner69]

At least nobody can say that Mr Kerr Neilsen mislead anybody .... six months ago he said they were only worth $5.00 and that's what he floated them for ..... just the euphoria of the market and getting on the gravy train took them to $9 odd .... but then again that euphoria was probably stage managed for some to make heaps .... cynical today eh

Must listen to that man Kerr Neilsen more often .... he was right

[COLIN]

As a matter of interest: Platinum Capital Ltd (PMC) had a NAV of 162.22 at the end of September, compared with a NAV of 162.53 at the end of February. On a 12 months basis they couldn't even match the MSCI World Index which was 4.6% as against PMC's 1.4%. Pretty disconcerting, given the supposed guru status of Mr. Neilson! He has admitted in the latest PMC Quarterly Report that he "Got it all wrong". As I said before, I'm afraid the gloss has worn off Mr Neilson and it is not surprising that investors are abandoning him. But he has his billions and why does he need to worry! Pity his poor devotees though.

[macduffy]

Yes, fund managers are highly vulnerable to short term underperformance and PTM will no doubt continue to suffer in the short term. But KN has always been a contrarian and will have his time again, if he sticks around. There will be a time to buy PTM but its not now.

[macduffy]

Someone still likes PTM - one of the directors has bought another 20,000 to add to his 200k.
Me, I'm still waiting.

[soulman]

I think the bottom have been found. Anything around $5 is a good buy. Not for me though.

[macduffy]

Someone still likes PTM - one of the directors has bought another 20,000 to add to his 200k.
Me, I'm still waiting.

Company has amended above to 100k additional for a total of 300k shares.

[mark100]

If Kerr Neilson still has the midas touch this is the time to demonstrate it. It will be very interesting to see the performance of the PTM funds vs the market over the next year.

If he can outperform, FUM might start growing again and PTM could be good value in the low $4's.

[mark100]

Platinum FUM fown 7.5% to $18.7B in Jan. Thats down from over $22B at the time of the IPO in May 2007. At this rate PTM shares could soon have a 3 in front of them. To be fair though all of the PTM funds outperformed the market by a fair margin in Jan however none posted a positive return.

[mark100]

PTM FUM down 4.9% to $17.8B in Feb with some marginal outperformance by the PTM funds. All posted a negative return however

[mark100]

How the mightly have fallen. FUM now around $17.1b and the share price is $3.50. Glad I was a seller in the $8's and not the over-excited punter who paid $9.11 on the first day.

Consensus EPS for FY09 is now around 25c. I reckon the most you could pay for PTM in the current environment would be 11-12x FY09 which equates to $2.75-3.00.

[mark100]

PTM FUM are going down the drain. Now down to $14.97b. Thats a 32% drop in FUM since listing 12 months ago for a fund manager that apparently was positioning itself for the end of the bull market.

[mark100]

I seem to be talking to myself on this thread but I see PTM is down to $2.75 today. I don't like to see people losing money but I must say I'm personally very happy to see this fall.

At this point in time PTM's FUM is in freefall but you would have to think at some point FUM will stabilise and resume its growth. Right now that point has not been reached and as a result PTM is probably still too expensive at $2.75.

Well worth watching for the eventual turnaround.

[Huang Chung]

Hi Mark

Been quietly reading your posts.....generally not much to say other than 'Oh My God!'.

Kerr Nelson has gone from hero to zero in less than 12 months.

I was having a look at Platinum Capital at around $1.19 briefly yesterday. The massive premium to NTA that this stock attracted has now completely disappeared. I like the idea of LICs, such as PMC, as opposed to open ended managed funds, as you don't have the problem of a fund having to sell a part of their holdings at exactly the wrong time in order to meet redemptions related to unit holders cashing in their chips.

Do you have any views on PMC Mark?

[macduffy]

I seem to be talking to myself on this thread but I see PTM is down to $2.75 today. I don't like to see people losing money but I must say I'm personally very happy to see this fall.

At this point in time PTM's FUM is in freefall but you would have to think at some point FUM will stabilise and resume its growth. Right now that point has not been reached and as a result PTM is probably still too expensive at $2.75.

Well worth watching for the eventual turnaround.

FUM certainly taking a hammering. Of course, this is inevitable in a down market and we don't know how much is due to market values as opposed to redemptions/ loss of investment mandates. I read somewhere that PTM's investment returns overall, while negative in recent months, are actually better than most of its competitors.
As a listed company, PTM is probably under a lot more scrutiny than most of its peers. Has anyone seen recent FUM figures/trends for other fund managers and if so, how do they compare with PTM's FUM losses?

[mark100]

Hi Mark

Been quietly reading your posts.....generally not much to say other than 'Oh My God!'.

Kerr Nelson has gone from hero to zero in less than 12 months.

I was having a look at Platinum Capital at around $1.19 briefly yesterday. The massive premium to NTA that this stock attracted has now completely disappeared. I like the idea of LICs, such as PMC, as opposed to open ended managed funds, as you don't have the problem of a fund having to sell a part of their holdings at exactly the wrong time in order to meet redemptions related to unit holders cashing in their chips.

Do you have any views on PMC Mark?

Hi HC,

I don't really follow the LIC's as I prefer to invest directly in the stocks myself. But you're right the premium has vanished but with good reason. PMC's investment performance has been quite poor over the past few years. I actually rate WAM has a good LIC. They invest in small cap aussie stocks and have outperformed the market by a large degree over the past 7 years or so. They also cashed up a lot prior to the bear

[Huang Chung]

Cheers Mark.....I don't mind the idea of getting some overseas shares at some stage, and LICs are a convenient way of going about it.

[SEC]

Hi Mark

Been quietly reading your posts.....generally not much to say other than 'Oh My God!'.

Kerr Nelson has gone from hero to zero in less than 12 months.


I wouldn't mind being called a zero if I was able to sell down a stake of my own investment company at the peak of the market and had half a billion in the bank (or a 5 and eight zeroes!!!!!!!!).

Yes Mark I've also been following with amazement and surprised how poorly the PTM funds have performed given they were supposed to have been well hedged against any bear market.

I might come up a revised table with PE ratios for the listed fund managers just to compare with what they were a year ago...

SEC

[SEC]

Hi Mark

Been quietly reading your posts.....generally not much to say other than 'Oh My God!'.

Kerr Nelson has gone from hero to zero in less than 12 months.


I wouldn't mind being called a zero if I was able to sell down a stake of my own investment company at the peak of the market and had half a billion in the bank (or a 5 and eight zeroes!!!!!!!!).

Yes Mark I've also been following with amazement and surprised how poorly the PTM funds have performed given they were supposed to have been well hedged against any bear market.

I might come up a revised table with PE ratios for the listed fund managers just to compare with what they were a year ago...

SEC

[PLYNCH]

Back over $9.Its been a long time between drinks.

[kiora]

WAM on a roll as well

[Joshuatree]

Bought some recently. Int discussion between Magellan and PTM. They both agree chinese stocks are where its at.

It’s growth versus value as Andrew Clifford, Hamish Douglass square off (https://www.theaustralian.com.au/business/financial-services/its-growth-versus-value-as-clifford-douglas-square-off/news-story/f6ef550aca694ebf7166ff8f5e2b47d4)

It was value versus growth as Australia’s best-known global fund managers squared off.Despite going head-to-head the Livewire conference in Sydney, Platinum’s Andrew Clifford and Magellan’s Hamish Douglass did find some common ground despite vastly different investing styles.While global financial markets obsess about the US-China trade war and the potential for further interest rate cuts by the central banks, both Platinum and Magellan agree that the rise of the Chinese consumer will be by far the most important force for next decade or two. Of course, one could be forgiven for thinking the US empire isn’t dead after all and perhaps this isn’t the much heralded “Asian Century”.
Indeed a 50 per cent rise in the S&P 500 and a 76 per cent rise in the Nasdaq in the past five years may point to an “American reboot”.
Much to the frustration of Platinum’s Mr Clifford, who has stuck with Chinese-listed shares, the Shanghai Composite index has gone nowhere in the same period, despite the urbanisation of China and its vastly superior — but slowing — economic growth profile relative to the US.But he has no doubt that China’s sharemarket offers the biggest upside over the long term and it’s all about the consumer.“I think the underlying story of Asia’s growing dominance is very real,” said Mr Clifford, who oversees a $24.4bn China-focused fund.“This is Asian Century and the US — their entire behaviour around trade is a clear sign of their decline,” he said.
“The issue is in the stockmarket there are a whole lot of other variables and I think it’s a great lesson for today.”Mr Douglass has done famously well from steering the $92bn Magellan Global Fund into strongly performing companies exposed to the Chinese consumer — rather than companies listed in China — but he’s on the same page as Mr Clifford about the rise of China.“I do believe in the next 20 years it’s the Chinese sort-of 20 years ahead — there a very powerful structural issues going on.”“But what’s going to be very important for the next years — and you can do it by Chinese companies, European companies or US companies — but what you have to be careful of is … something I would call ‘capitalism without capital’.”Mr Clifford said the fact that Chinese stocks had de-rated from “insanely expensive” in mid-2016 wasn’t a surprise. But that they’ve de-rated to the point that they now trade on a fraction of the multiples being paid for companies with similar growth rates in the US is “quite extraordinary”.
For Magellan’s Mr Douglass the Chinese-exposed businesses that are “winning” are typically Nasdaq-listed and “capital-light”, while many Chinese-listed peers that trade on low price-to-earnings multiples — including banks, property, industrial, manufacturing businesses — are “capital-intensive”.He expects underperformance from the Australian sharemarket — particularly banks — for the same reason.Platinum’s Mr Clifford takes issue with Magellan’s “capital-intensive versus capital-light” argument, labelling it a “misnomer”.
Among his favourites are Chinese consumer plays, like Ping An Insurance — China’s leading life insurer and No 2 general insurer — one of the world’s leading fintech companies with its peer-to-peer lending platform.“This is one of the most extraordinary companies, growing at 20 per cent per annum for 20 years — that’s a complete rarity and it’s trading on just nine times earnings. It’s a life insurance business so it certainly has capital requirements, but we are talking ROEs (return on equity) in the mid-20s. If that was a US stock it would be on 30 times.“Then we have two better-known names that make the list of top 10. We have Alibaba. It is the Amazon of China, but it’s far more than that.“It is one of the biggest payments companies in the world and it has strong positions in everything associated with e-commerce — video streaming, food delivery, uber — and the thing is on 25 times. It’s making money, unlike Amazon, and it is growing like crazy.”Another favourite for Mr Clifford is Tencent, the biggest payments company in the world that’s been called the “Facebook of China”.“
Tencent is the leading gaming developer, producer and platform in China,” he said. “They lead payments and food delivery, video streaming, it’s all of these things. This one’s a little more expensive, but a return on equity in the 20s and you have to pay 30 times (EPS).”Both Alibaba and Tencent are well below April peaks.
It’s no surprise Magellan’s Douglass also favours the Nasdaq-listed Alibaba.

[Joshuatree]

https://youtu.be/7Mp2gctWb6k?t=1

Heres the vid. Two top fund managers sharing.Planning where to be placed in 10 years. With declining int rates and fin tech Aus and other Banks are out as investments.

[ratkin]

https://youtu.be/7Mp2gctWb6k?t=1

Heres the vid. Two top fund managers sharing.Planning where to be placed in 10 years. With declining int rates and fin tech Aus and other Banks are out as investments.

have been a shareholder with Magellan plus MFF since around 2008. Have been very impressive.
They are also listing their high conviction fund, which targets all the stuff he talks about in the video


https://www.magellangroup.com.au/magellan-high-conviction-trust/

Offer is open till sept 27

[Joshuatree]

Magellan has been a supreme fund performer. PTM has really been knocked around hence our entry at these low S/prices. Holding PTM rather than their funds which are targeting some chinese companies like magellan is the lower risk way for us ,albeit maybe with a lower return.

[ratkin]

Magellan has been a supreme fund performer. PTM has really been knocked around hence our entry at these low S/prices. Holding PTM rather than their funds which are targeting some chinese companies like magellan is the lower risk way for us ,albeit maybe with a lower return.

Is PTM exempt from FIF? (too lazy to check)