Building a Sustainable Business
Founded by a team of four investment professionals and a handful of support staff in 1994, Platinum has established itself as one of Australia’s most trusted asset managers and has built a strong reputation among direct investors and financial advisers. This reputation has been achieved by staying true to our central endeavour – delivering superior returns over the long-term and keeping clients abreast of our perspective and portfolio positioning.
Platinum’s business is managing clients’ money. It charges clients a fee for doing so, and these fees are Platinum’s chief source of revenue. We, at Platinum, have a simple core belief: if Platinum responsibly and successfully looks after investors’ money, its business should prosper. A failure to understand and commit to this priority will not result in an enduring wealth management business; marketing, commissions and other selling devices notwithstanding.
Being a Responsible Money Manager
Platinum’s history has been punctuated with recurrent market challenges – the Asian monetary crisis of 1997-98, the tech bubble of 2000-01, and the more recent global financial crisis of 2008-09. In spite of these challenges, we have seized the many opportunities presented by the market, including those that emerged as a result these market crises, and have in many of our products outperformed the relevant benchmark MSCI index by a significant margin over the long-term, delivering strong absolute returns to our investors.
Find out more about the performance of Platinum’s products, and read about the investment philosophy and stock selection methodology that have made the strong performance possible.
Environmental, Social and Governance (ESG) Considerations in Investing
Platinum is a fundamental equity investor and believes that private enterprise plays a central role in wealth creation and social advancement. It is also our belief that value creation for shareholders ought to be aligned with value creation for society at large. Platinum invests with a long-term outlook (typically five years or more) and, as part-owners of the enterprises in which we invest, it is paramount to us that they maintain their social licence to operate. As such, we view social and environmental sustainability as well as sound corporate governance as being vital to a company’s long-term viability, growth and profitability.
Platinum’s approach is focused on identifying companies whose intrinsic value is under-appreciated by the market due to temporary drawbacks or irrational market sentiments. Material ESG trends and factors can directly and indirectly impact on a company’s financial performance and prospects, and when such externalities are not fully reflected in the company’s share price, it may create opportunities for the discerning, but may also pose investment risks for the unwary.
To assess a company’s true worth – the core of our mission, a nuanced consideration of the company’s operations and operating environment is essential, and the evaluation of material ESG issues and risks, like traditional financial and operational factors, is an integral part of this exercise. We believe, based on both Platinum’s own experience and studies by third party researchers, that incorporating ESG considerations into the investment process by employing a robust framework can lead to more informed and holistic investment decision-making and, ultimately, better investment outcomes for our investors.
To this end, Platinum has adopted a Responsible Investment Policy which affirms our commitment to responsible investing by outlining our approach to:
- incorporating ESG considerations into our investment process, which is implemented through three key integration techniques:
- applying exclusionary screens to restrict investment in specific sectors or companies (e.g. tobacco and military weapon makers);
- generating investment ideas through the analysis of ESG trends and themes; and
- integrating the analysis of ESG issues and factors into our fundamental stock research;
- engagement with portfolio companies; and
- proxy voting.
The ESG factors that we may examine in our integrated analysis are wide-ranging and would depend on the industry concerned as well as the geographic location of the business. Some examples include, but are by no means limited to:
- Environmental – carbon footprint, resource depletion, and waste management.
- Social – working conditions and industrial relations, community resettlement (e.g. by mining companies or real estate developers), product safety, and cybersecurity.
- Governance – executive compensation, board independence and diversity, as well as having processes in place to prevent bribery, corruption and other malpractice.
These issues can have an impact on the environment and/or communities (including employees and consumers), but they also present regulatory, operational and economic risks to the company which may potentially have a material impact on its financial performance and hence investor returns.
For a more detailed description of our approach to integrate ESG considerations into Platinum’s system, please refer to the Responsible Investment Policy.
Focus on Superior Client Service
Platinum’s business is centred on providing dependable service to our clients, not the pursuit of sales targets or the indiscriminate accumulation of funds under management. That ethos has underpinned our approach to investing, product distribution, investor communications and every other aspect of our operations since the beginning. This is reflected throughout our policies and business practices, including:
- We do not charge up-front fees or exit fees from investors.
- We do not pay trailing commissions to financial intermediaries or advisers.
- We neither pay nor accept soft dollar benefits to or from financial advisers or advisory firms.
- We use forward pricing for our unit trust products to ensure no “market timing” or “late trading”.
- We support financial advisers with quality presentations from dedicated investment specialists and members of the investment team.
- We hold biennial investor presentations for those investing directly with us.
- We provide honest and informative quarterly reports written by the portfolio managers.
Ethical Conduct
The ethical standards of the financial services industry have been facing increasing scrutiny worldwide since the 2008 global financial crisis. Platinum has always held the highest standards of integrity in all aspects of its operations and has in place robust policies aiming to prevent illegal, unethical or improper conduct such as fraud, bribery and insider trading. Given the nature of Platinum’s business, we are particularly mindful of the risks of insider trading and personal dealing. Platinum has therefore implemented appropriate systems of ongoing monitoring and provides regular staff training to ensure compliance by all staff members with our Business Rules of Conduct & Personal Investing Rules and Securities Trading Policy.
Workplace Diversity and Inclusion
Platinum is a service-oriented business, and our people are our most important asset. That is why we focus equally on attracting the best talent and providing an inclusive and supportive work environment to help our staff develop their careers.
Platinum actively promotes a culture of equal opportunity and adheres to the principles of meritocracy (based on contribution to the firm’s overall success), fairness and equality at all levels within the company. We value the blend of skills, perspectives, and personal characteristics that comes with a diverse workforce and recognise that such diversity has contributed to our business success. For example, our investment team includes not only economists and finance experts, but also former scientists and engineers. Read more about our investment team here.
In this context, workplace diversity includes gender, age, ethnicity, cultural background and more. To promote workplace diversity, our Board has adopted a Diversity Policy in addition to a Workplace Anti-Discrimination & Anti-Harassment Policy and a policy on Flexible Working Arrangements. The Diversity Policy includes a set of clear objectives as part of our corporate governance practice. These include:
- providing flexibility to staff members. In this context, workplace flexibility involves developing people management strategies that accommodate differences in background, perspectives and family responsibilities;
- including in the recruitment process for vacant positions a diversified group (including gender diversity) of candidates. This further extends to the interview process for vacant positions on Platinum’s Board of Directors;
- providing training opportunities with the aim of bringing through the underlying potential of staff; and
- maintaining a diversity committee comprised of representatives from each business division within the company. The diversity committee will meet periodically and will monitor progress on Board-recommended diversity strategies and make recommendations to the Board for further diversity opportunities.
The following statistics (current as of 15 August 2017) demonstrate Platinum’s ongoing endeavours to promote diversity and inclusion within the workplace.
Platinum has exceeded the nation’s average in the categories of women on the board and women in senior executive positions. Platinum also exceeds the nation’s average in the categories of women working part time, workforce made of employees born outside of Australia and employees with tertiary education.
| |
Platinum |
Australia |
| Women on the Board |
25%
(2 of 8) |
23.1% 1 |
| Women in senior executive positions |
25%
(1 of 4) |
16.3%2 |
| Women in the workforce |
33%
(30 of 91) |
46.4%2 |
| Women in line roles |
20%
(4 of 20) |
28.5%2 |
| Women employed on a part-time basis |
40%
(12 of 23) |
21.6%2 |
| Workforce over 55 years of age |
5%
(5 of 91) |
18.6%3 |
| Workforce made up of people born outside Australia |
48%
(44 of 91) |
28%4 |
| Workforce made up of people with tertiary qualifications |
85%
(77 of 91) |
44%5 |
| Workforce made up of people identified as Aboriginal or Torres Strait Islander people |
0%
(0 of 91) |
1.6%6 |
Platinum’s efforts to create an inclusive work culture have resulted in excellent retention rates. For example, the average investment management industry experience of our fund managers was 17.7 years (as at 31 July 2017), with an average of 13.4 years at Platinum. The average number of years with Platinum for the remainder of the investment team was 5.4 years. The average number of years at Platinum for non-investment team employees is 6.98 years.
Contribution to the Financial Advisory Industry
At Platinum, we believe that being a member of the financial services industry entails a duty to help improve the industry.
Financial advisers and planners play an important role in helping Australians to achieve financial security. To play a small part in raising the professionalism in the financial advisory industry, each year Platinum and The Neilson Foundation jointly fund 24 scholarships awarded to students majoring in Financial Planning across three Australian universities, each to the value of $12,500 per year. The participating universities are Griffith University, LaTrobe University and Deakin University. 40% of the scholarships awarded since the program began in 2014 were received by female students. In addition, Platinum also offers a four-week work experience program to two of each year’s scholarship recipients.
Commitment to Climate Action
We are committed to operating our business in an environmentally responsible and sustainable manner.
Carbon emissions from Platinum’s operations are primarily from electricity usage and business travels undertaken by our staff for the purposes of investment research, engagement with portfolio companies, and meetings with clients and prospective clients. We measure and monitor our carbon footprint on an ongoing basis and have programs in place to purchase carbon credits to offset our emissions.