Are the wheels coming off the billionaire-creating float of Platinum Asset Management? A statement to the ASX yesterday hints very strongly that the boom time company, which turned founder Keir Neilsen and his wife into our latest billionaires when it listed in late May, has lost a large institutional mandate.

Broking reports today speculate (with some envy perhaps?) that it could be a biggie: as much as $500 million.

“The September FUM figure includes an outflow of A$131million from an institutional performance share fee mandate. It is anticipated this mandate will have a further outflow of A$487 million in October 2007.”

Platinum said Funds Under Management (FUM) at 30 September were $21.122 billion, compared to $21.869 billion at the end of August. That’s a fall of 3% over the month, with another substantial fall to come this month.

Credit Suisse pointed out that the 3% fall in the FUM position of Platinum compared to the MSCI world index which was up 3% over the same period on a local currency basis:

We have analysed the individual fund performance of the key PTM funds, and note two key takeaways: PTM again evidenced net outflows this month, potentially reflecting medium-term investment underperformance across key funds. In particular, PTM noted September included a $131mn institutional share mandate loss and flagged a further outflow of $487mn to follow in October from the same client.

Investment performance in the flagship PTM International fund (44% of total AuM) improved in September following material underperformance relative to global markets in the previous month. That said performance in the Asia fund (15%) and PTM fund (6%) were behind respective benchmarks. Incorporating the September AuM (Assets under Management) balance and the flagged mandate loss in October, we have downgraded our estimates over the forecast period by 6%-8%. Our 12-month share price target has been downgraded to $6.60 (from $7.00) although we retain our Neutral investment rating.

Platinum shares fell 9%, or more than 60 cents, to $6.23 yesterday. Sounds like the scales falling from a few investors’ eyes there. They were offered at $5.00 prior to its listing in May: the shares jumped to $8.80 in just one day on listing on 23 May.

Wednesday’s close is still 28% premium to the offer price. How long before it reaches par and then a slight discount?