Platinum Asset Management Eyes $16.5B Future with L1 Capital Merger
Platinum Asset Management reports improved FY2025 financials alongside a transformative merger proposal with L1 Capital, aiming to create a $16.5 billion alternative asset manager.
- Proposed merger with L1 Capital to form L1 Group with $16.5 billion AuM
- FY2025 adjusted operating profit margin steady at 44% amid strong expense control
- 29% decline in average funds under management reflecting client outflows
- Merger expected to deliver $20 million in annual pre-tax synergies and EPS accretion
- Shareholder vote on merger scheduled for 22 September 2025
FY2025 Financial Performance Overview
Platinum Asset Management Limited (ASX, PTM) has released its full-year financial results for 2025, revealing a year marked by operational discipline and strategic repositioning. Despite a 29% decline in average funds under management (FUM) to A$10.8 billion, the company maintained a robust adjusted operating profit margin of 44%, underscoring effective expense management amid challenging market conditions and ongoing client outflows.
The firm reported management fee revenues of A$125.8 million, down 28% year-on-year, reflecting the reduced FUM. However, adjusted expenses fell by 23% to A$70.9 million, driven by cost-saving initiatives including headcount reductions and lower discretionary spending. Platinum also paid a fully franked dividend of 21.5 cents per share, distributing A$125 million to shareholders.
Merger with L1 Capital, A Strategic Reset
The highlight of Platinum’s update is the proposed merger with L1 Capital, a move designed to complete the turnaround program initiated in early 2024. Subject to shareholder approval at the extraordinary general meeting on 22 September 2025, the merger will create a newly branded entity, L1 Group (ASX, L1G), combining assets under management of approximately A$16.5 billion.
The transaction envisages Platinum shareholders owning 26% of the merged group, with L1 Capital shareholders holding the remaining 74%. The merger promises substantial operational efficiencies, targeting 22% to 26% reductions in operating costs from a combined run-rate of about A$134 million. Expected annual pre-tax synergies of around A$20 million are projected to be realised within 12 to 18 months post-completion, delivering meaningful earnings per share accretion for Platinum shareholders.
Investment Performance and Product Strategy
Investment performance showed signs of recovery, with most Platinum Trust Funds improving relative to their benchmarks, although the International strategy continues to lag. Four of seven core funds outperformed their MSCI nominated indices or cash plus benchmarks over the past year, up from two of eight at the start of 2024. The merger is expected to enhance investment capabilities through a sub-advisory agreement with L1 International and broaden the product suite available to clients.
The combined entity will maintain the trusted Platinum and L1 brands while expanding its reach across institutional, wholesale, high-net-worth, and retail clients. The diversified asset base includes Australian and international equities, multi-strategy hedge funds, and specialist equities, positioning the group as a leading player in alternative asset management.
Operational and Leadership Developments
Platinum has made significant progress on its reset agenda, including simplifying back and middle office operations, closing sub-scale products, and implementing new remuneration plans aligned with shareholder outcomes. The merger will bring together senior leadership teams from both firms, with key appointments already announced and further appointments pending. The combined balance sheet is expected to provide enhanced capital flexibility to support future growth initiatives.
Looking ahead, the merger completion is targeted for 1 October 2025, with L1 Capital becoming the legal and accounting acquirer. Financial reporting will transition accordingly, with the merged entity’s results consolidated from that date.
Bottom Line?
As Platinum Asset Management approaches a critical shareholder vote, the proposed merger with L1 Capital stands to redefine its market position and operational scale, setting the stage for a new chapter in alternative asset management.
Questions in the middle?
- Will the shareholder vote on 22 September approve the merger as planned?
- How quickly can the merged entity realise the targeted $20 million in annual synergies?
- What impact will the merger have on Platinum’s investment performance and client retention?
