Perpetual Investment Management is handing over Garry Laurence-led global shares strategies to the investors at its US acquisition Barrow Hanley.
The funds include Perpetual Global Shares Fund and Perpetual International Share Fund.
Its internal global equity team led by Laurence will assist with the transition over the next six to eight weeks, with the management shifting to Barrow Hanley in September.
It is understood that Laurence left by mutual agreement, as Perpetual looked to cut costs by offloading the management to Barrow Hanley.
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He is expected to work until August and is understood to be looking at other opportunities within funds management, including potentially starting a new boutique.
Under Laurence, Perpetual Global Share Fund (Class A) returned 9.77% p.a. since the 2014 appointment compared to index's 11.85%. Under Barrow Hanley's Cory Martin, its Global Equity Trust returned 7.33% pa. since the May 2016 appointment compared to index's 11.64%.
Perpetual said it decided to change the managers after an extensive review of its global equities capability.
"Perpetual yesterday announced changes to our Global Equities team and strategy. Following an extensive review of the strategic direction of our global equities strategy, we have made the decision to appoint Barrow Hanley as the investment manager for our Perpetual Wholesale Global Share Fund, our Perpetual Wholesale International Share Fund and our WealthFocus Investment Funds - Perpetual Global Share Fund," it said in a statement.
"We believe the manager's rigorous investment approach, high calibre team, scale and depth of global research, aligned investment style and proven track record means it is best placed to manage and grow our global equities funds in the future."
Following the manager transition, Perpetual will drop the fees to 0.99% and get rid of performance fees. While the buy/sell spread will increase, the firm is estimating a reduction on transaction costs.
Perpetual also said the funds are expected to show greater diversification whilst sticking to a concentrated portfolio of 50-70 stocks. Upper threshold for cash will come down to 5%.
The funds will primarily invest in developed markets stocks but will introduce a 20% permissible allocation to EM stocks.
Laurence crossed over from PM Capital where he covered financial stocks to Perpetual in 2008. He has managed the Perpetual Global Share since 2011, which also used five other analysts.
Perpetual is understood to be consulting with the analysts on individual impact.
Another Perpetual portfolio manager Thomas Rice will retain the management of the global innovation share fund.
Perpetual started discussions with Barrow Hanley chief executive Cory Martin late last year and had done 80% to 85% of the due diligence pre-COVID, Rob Adams said in a analyst call yesterday.
Yesterday, it said it would pay $465 million (about 40% via an equity raise, 50% via a debt facility and about 10% via cash) to buy 75% interest in Barrow, Hanley, Mewhinney & Strauss from BrightSphere Investment Group.
Post-acquisition, Perpetual's combined $92.3 billion will now be 42% US equities, 11% global equities, 14% Australian equities, 27% cash and fixed income and 6% Trillium (ESG).
Barrow Hanley and Trillium will be 29% of the total operating revenue post acquisition.