Perpetual reaffirms commitment to struggling Irish arm
Published 24/06/2010 | 05:00
The head of Australian fund manager Perpetual has reaffirmed the company's commitment to its Irish operation, despite its relatively poor performance since the Dublin office opened back in 2004.
Chief executive David Deverall made the comment yesterday as he announced he was stepping down from the firm at the end of this year, or by March next year at the latest, even if no successor has been found.
Speaking to Australian media, Mr Deverall conceded that the Irish arm, known as Pi Investment Management, "hasn't delivered from a revenue point of view".
"It is pretty well documented that it is one of the many things we've done that hasn't worked as well as we wanted it to,'' he said.
Pi Investment Management posted a net loss of over €12m in the 12 months to the end of June last year as revenue fell to €2.7m from €4m and it impaired some assets.
Last year, Perpetual made a €10.1m capital contribution to Pi, bringing to €29.4m the amount that has been received by the Irish arm from the Australian firm.
The original staffers at Pi included four top fund managers from Bank of Ireland Asset Management.
They received potentially lucrative long-term share-incentive plans that were criticised by shareholders in Perpetual. Accounts for Pi show that the firm's employee trust has bought shares at a cost of €17.6m in Perpetual, while its 18 employees at the end of June 2009 shared €2.37m in wages and salaries.
A leading Australian institutional investor was yesterday highly critical of Perpetual's decision to open the Dublin branch.
"I think the Irish acquisition has been disappointing and is still weighing negatively on the stock," Geoff Wilson, the chairman of the Wilson Investment Fund, said.
"The decision to expand internationally hasn't borne fruit, and nor has the company's domestic business delivered for investors," he added.