Platinum shares sold off as founder Kerr Neilson steps down

Written by John Collett

Platinum Asset Management's share price has plunged about 13 per cent after billionaire founder Kerr Neilson announced on Thursday evening he would be stepping down as chief executive.

Mr Neilson and his former wife, Judith, each own just over a quarter of the company. With almost $600 million wiped from its market value on Friday, the couple's stake is worth about $160 million less.

Kerr Neilson to step down as chief executive, but remains a full-time executive director  Photo: Louie Douvis

Neilson, who was born in South Africa, built his reputation with Bankers Trust during its glory days of the 1980s.

At Bankers Trust, he famously ensured his investors were defensively positioned prior to the sharemarket crash of October 1987.

Platinum was founded by Neilson and four former Bankers Trust Australia colleagues in 1994.

Andrew Clifford, who has been chief investment officer since 2013, and who joined from Bankers Trust in 1994, will take over as chief executive from July 1. 

Neilson, who is in his late 60s, is part of the first generation of successful stock pickers, along with Anton Tagliaferro of Investors Mutual and Paul Moore of PM Capital, to set up shop on their own.

With his value-based, often contrarian investment choices he became one of Australia's most respected money managers, amassing a personal wealth of $US1.6 billion ($2 billion), according to Forbes Magazine.

As part of the changes taking effect from July 1, Mr Neilson's portfolio management responsibilities will be divided between Mr Clifford and portfolio manager Clay Smolinski.

The announcement has over-shadowed Platinum's half-year net profit of $104.6 million, which was up 7 per cent on the earlier corresponding period. 

Revenue is up 15 per cent with net fund inflows of $900 million.

Mr Neilson assured anxious investors that he would stay on as executive director full time.

He plans to mentor newer members of the investment team and help with finding new clients in Europe and the US. 

And importantly for existing clients, he said he would continue to work on generating investment ideas and company research.

James Carlisle, research director at InvestSmart Group, said it was a good profit result for Platinum.

"But we will be looking very closely at the funds under management numbers over the coming months to see if the stepping back of Mr Neilson will affect fund flows," Mr Carlisle said.

"It funds under management keeps going up and there are no signs of anyone heading for the exits, then the share price should recover," he said.

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