Platinum, a renowned asset management firm, witnessed a significant surge in outflows, exceeding 120% as its co-chief investment officers decided to step back from their roles. The firm, Platinum Asset Management, reported a notable decrease in its funds under management (FUM) from $10.99 billion in January to $10.76 billion in February.

During the month, Platinum experienced net outflows totaling around $358 million, with $322 million attributed to outflows from the Platinum Trust Funds. This marked a substantial increase from the previous month, where outflows stood at $160 million, the lowest in 18 months.

The announcement of the departure of co-CIOs Andrew Clifford and Clay Smolinski, effective March 3, added to the turbulence within the company. Clifford, with a tenure of 31 years at Platinum, stepped down from the CIO role and management of the flagship Platinum International Fund. Similarly, Smolinski transitioned from his role as CIO and portfolio manager of the flagship fund.

As the firm navigates this leadership transition, it currently operates without a CIO, although it designated Ted Alexander, a long-short global equity manager, to oversee the Platinum International Fund and other global strategies. Morningstar noted that the exits of Clifford and Smolinski might elevate redemption risks due to their established presence and credibility within the organization.

The departure of these key figures prompted Morningstar to revise its projections, anticipating FUM to decline from $13 billion to $3 billion by FY29, driven by outflows averaging 33% of FUM annually. The analyst highlighted that while a successor like Ted Alexander is in place, concerns about investor confidence, team stability, and potential redemption risks have heightened following the leadership changes.

Platinum declined to comment on whether the outflows in February were directly linked to the departure of Clifford and Smolinski. The firm’s future trajectory will likely be influenced by how investors respond to the new leadership structure and any ensuing restructuring efforts. This period of transition underscores the importance of maintaining investor trust and stability within the organization to mitigate potential risks associated with significant leadership changes.