Global platform giant Praemium reported record inflows and funds under administration (FuA) for the financial year 2021.
Net platform inflows increased by 111% to A$3.8bn (£2bn, $2.8bn, €2.3bn), with the Australian platform bringing in A$2.6bn (up 149%) and the international platform A$1.2bn, a 59% increase. Praemium said the figures did not include major client transactions.
Global FuA grew by 105% to A$41.7bn, made up by A$23.4bn from the platform (a 163% increase) and A$18.3bn from virtual managed account administration (up 61%).
The acquisition of Australian wealth platform Powerwrap in September 2020 also proved profitable bringing revenue of A$16.3m, alongside international net revenue rising by 6% for the year to A$12.5m, and platform revenue growing by 30% to A$8.1m.
The announcement regarding the strategic review and the divestment of the international business was made after the reporting deadline, but the firm said it will go ahead with a formal sale process.
This will allow Praemium to focus and accelerate its growth trajectory in Australia, it added.
Bolstering tech capabilities
The international side of the business recently opened an office in Edinburgh to complement its existing hubs in London and the Midlands and has been on a recruitment spree to boost its technology development and adviser support functions.
Mark Sanderson, international and UK managing director at Praemium, said: “We have ambitious plans for growing the UK and International business; equally we set ourselves the highest service standards.
“Growth will never come at the expense of the things that clients tell us set Praemium apart from the competition – differentiating on service and proprietary technology. So, I have been delighted with the phenomenal response to our latest recruitment drive.
“With over 50% of our total headcount in technology, we’ve been able to let our proprietary tech do most of the heavy lifting as we’ve grown. However, complacency is never an option and we’re making sure that we have the right mix of responsive, next-generation technology and fantastic boots-on-the-ground human support for when its needed.”
Praemium chief executive Anthony Wamsteker, who took over after Michael Ohanessian stepped down in May 2021, added: “Whilst the growth rate was encouraging, the profitability achieved in this transitional year was also pleasing. Underlying Ebitda was very similar to last year in both the Australian and international segments.
“This result was achieved despite a significant increase in the expense base of the company.
“Some of this growth in expense was due to bringing in Powerwrap, with the balance attributable to an investment in the capacity needed not only to manage a larger business, but also to facilitate the faster growth rate that we are now starting to see.
“I am confident that the need for the expense base to grow as fast as revenue was a one-off in this year of transition and that underlying Ebitda will resume growing at a rate that is well above the rate of revenue growth.
“Based on our recent changes and market announcements, we anticipate the coming year will once again produce some dramatic positive changes in our business. I believe that the steps we are taking will build on a proud heritage and ensure that we are positioned to realise the potential of the business that is just starting to take advantage of the wonderful opportunity presented by the investment platform market segment.
“There are some exciting improvements in the works which should further enhance Praemium’s competitiveness over the coming year. Pleasingly, the growth has continued into FY2022 with net platform flows of A$634m in July (Australia A$471m, International $163m) setting a new monthly record for Praemium.”