Unloved Praemium’s platform attracts interest
Financial services technology company GBST’s fierce bidding war has investors and dealmakers on the lookout for other unloved fintechs that could be ripe for takeover.
And the spotlight has fallen on perennial underperformer Praemium, which has been left behind by rival platform owners Netwealth and HUB24 in the race to win clients and funds off the big banks and AMP.
Praemium specialises in managed accounts. Its platform can be white labelled by advisers and its unified managed accounts offering – which allows clients to combine model portfolios with their own stock picks and non-custodial holdings – appears to be where the wealth management industry is headed.
Its clients include a couple of big brokers in Morgan Stanley Wealth Management Australia and Shaw and Partners, and the technology is recognised by fund managers and analysts to be pretty good. Recently-listed Powerwrap would also agree – it is fuelled by Praemium’s technology.
But the company has not been able to capitalise in terms of revenue and earnings.
And that performance hasn’t been helped by some corporate hiccups over the years, including a board spill led by some of its bigger investor to re-instate sacked CEO Michael Ohanessian in 2017.
So Praemium’s shares have been nowhere near as strong as its bigger platform rivals. The stock has halved since this time last year and closed at 44¢ on Wednesday.
If there is a silver lining in the poor performance, it may be that Praemium has fallen on to the radar of at least one potential suitor.
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