Shares in Platinum Asset Management fell hard after the funds manager announced a cut in fees.
A short time ago, the shares were down 8% today to $4.28, falling 14% since Friday.
Analysts estimate the cut in the standard management fee to 1.35% from 1.50% will reduce Platinum’s fee income by between 9% and 10%.
“We see the cut in fees as part of a downward spiral for the firm,” says Bell Potter in a note to clients.
Bell Potter says Platinum lost $3 billion in fund flows for calendar 2016.
“We estimate this has continued into calendar 2017 with over $1 billion being lost for the first three months of this year,” the broker says.
“The disappointing relative performance of some funds, coupled with some key staff departures and now a reformatted fee structure may in fact cause existing investors to reassess their investment allocation to PTM (Platinum Asset Management) altogether.”
Bell Potter has a hold recommendation and a price target of $4.20 a share, down from $4.90.
Macquarie has Platinum on neutral with a 12-month price target of $4.39, down from $4.93.