I really like Kerr Neilson and have been in/out of Platinum over the last three years and he is the major reason why I invested initially - I love listening to him talk about the funds management industry, where it has been and where it is going (always spot on). I also love Platinum's Healthcare Fund and the foresight shown in picking investments like Moderna a couple of years before pandemic by the CIO Dr Bianca Ogden. There is a lot of capability of returning to high growth in the Brands Fund too.
Unfortunately Platinum is a case study of a value trap and how one can get caught up in them - as is typical of investing in a story over business performance. While Platinum had shown some early green shoots of turning around in 2020/21 with great Fund performance (some of the funds were returning 20+%) and overall FUM growth of 10% for the year, the business hasn't been able to sustain the growth. Great business and investment approach, but the data based on business performance clearly demonstrates a decline.
This has been demonstrative in the declining dividends paid. If an investor had bought at the low of 2015 at $6.50 and received dividends from the 2015 calendar year as follows:
2015 - 47c
2016 - 32c
2017 - 30c
2018 - 32c
2019 - 27c
2020 - 24c
2021 - 24c
2022 - 17c
This is $2.33 in dividends (excluding Fr Cr's). Discounting dividends an investor paid $4.17 per share.
Assume no tax was payable by an investor and full Fr Cr's were received at $3.33 per share [Fr Cr (3/7)*2.33=$3.32857] discounted price paid by an investor was $3.17 per share in 2015.
So today the loss of a buy and hold shareholder is between $1.35 and $2.35 dependent upon how much an investor was able to take advantage of tax credits or not.
I don't 100% know why and hope this business turns around in the future, but with the dividend decline trend and no real business turnaround from the last time where growth in FUM of 10% for the year wasn't sustained, a continuing decline is likely to be experienced.
The continuing trend down in FUM and dividends does not bode well for a long term investor at this stage. There is 7 years of data proving the decline has set in, what will it take to change and turnaround?
Dividends paid are here:
Best of Luck
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