Platinum: Interim result 2019

Periods of underperformance are inevitable in funds management and Platinum is proving the point. The company's flagship funds both suffered negative returns for the six months to December, with the International Fund down 5.5% and the Asian Fund down 7.0%.

Both continue to lag their respective benchmarks over 1- and 5-year time frames (10 years for the International fund, too). The poor performance meant funds under management fell, and there were no performance fees earned during the half.

If there was a bright spot, it was that the company still managed to attract net inflows of $689m. Perhaps founder and former managing director Kerr Neilson's road trips are working better than imagined. Whatever the cause, though, that good fortune won't last if his replacement Andrew Clifford and his team can't get the funds back on track -  and in January Platinum recorded net outflows of $111m, suggesting the tide may already be turning.

As an aside, the balance sheet now boasts around $200m in cash and $220m in other investments. A solid return on these assets means a good chunk of operating expenses are covered - regardless of fund flows. Overall, though, this result did little to change our view since we last reviewed the stock. Fund outflows and poor performance are a concern, but Platinum still has a good brand, a band of loyal retail clients, room to grow and a team we'd back to outperform over the long term. HOLD.