The deal will still require approval by the Supreme Court of NSW at a hearing on January 11. If approved, it will be completed by the end of January.

Page told the scheme meeting that since the announcement of the deal, a “volatile backdrop and outsized impact of falling markets for asset managers” had reinforced the strategic rationale for the merger, as firms brace for uncertainty in 2023.

“We believe achieving scale will be key to the combined group’s success,” she said.

The share price values of many of Pendal’s peers have been declining significantly around the world, she added.

“It’s the view of our board and the Perpetual board that scale is the only thing that is going to allow asset managers of the nature of the funds that we manage to successfully navigate the market forces as they are, and have been increasingly over the last five years,” she said.

“The only way to operate effectively going forward will be to achieve scale and efficiencies in the operating platform. One good example of that is just the huge regulatory cost around the globe that our companies are experiencing.”

Loading

“Scale will deliver significant improvements in the ability to sustain those regulatory costs which will continue, I’m sure, to increase.”

Earlier this year, Morgan Stanley de-rated Australian asset managers, saying continued outflows and a lack of growth options would hit the companies’ price-to-earnings ratio from 10 times to 8 times, a sharp drop from 16 times last year.

Over 95 per cent of proxy votes on Friday were in favour of the deal. Pendal’s board of directors, which collectively own 0.11 per cent of Pendal shares, unanimously recommended it.

Perpetual chief executive Rob Adams will lead the group, and its Australian asset management business will be led by Perpetual group executive Amanda Gillespie.

Originally, three Pendal non-executive directors were set to join Perpetual’s board - Christopher Jones, Kathryn Matthews and Ben Heap.

However, Heap withdrew his nomination last week after civil proceedings were commenced against him by ASIC alleging he breached his director’s duties while in the chair at Star Entertainment.

Earlier this month, Morningstar analyst Shaun Ler recommended Pendal shareholders vote in favour of the acquisition.

“While the merger has risks, the potential downside from [funds under management] loss or cost blowouts are more than priced in. We think Perpetual can avert a material attrition in FUM. There is also room to rip out costs from centralising operations,” he said.

He said Pendal shareholders will gain exposure to Perpetual’s successful corporate trust business and would not be “solely hostage to the ebb and flow of investment cycles”.