The S&P/ASX 200 Index (ASX: XJO) stock Perpetual Ltd (ASX: PPT) has suffered plenty of pain in the last few months and years. Sell-offs like this can prove to be an opportunity for brave investors, if the business can swing towards a recovery.

The fund manager Blackwattle has pointed out to investors why the company could be an appealing investment.

For those that don't know, Perpetual describes itself as a diversified financial services company. It provides asset management, private wealth and trustee services to local and international clients. It has operations across Australia, Asia, Europe, the UK and the US.

Let's look at what makes the business an appealing investment today after its decline of more than 19% in the last 12 months.

Reasons to be optimistic on the ASX 200 share

Blackwattle acknowledged that the funds management company has disappointed investors with its asset management segment, showing net outflows from JO Hambro and Barrow Henley.

However, while the asset management industry faces structural challenges from passive investing, the investment case for the ASX 200 share is based on the view that the current market capitalisation of the company undervalues the sum of its various businesses.

Blackwattle believes the company's total market value appears less than that of its corporate trust and wealth management businesses.

Perpetual is currently trading at 6.9x reported operating profit (EBIT), if the debt is netted off against the ASX 200 share's financial assets, which includes seed investments.

Blackwattle then explained why it's attracted to the non-funds management side of the business:

We're particularly attracted to the defensive, high-quality Corporate Trust business, which is growing quickly thanks to increasing demand for custody services—a trend likely to continue as banks exit hybrid funding markets. Notably, Perpetual has received three takeover offers since 2021 at materially higher prices.

We acknowledge the challenge in turning around the funds management arm—especially amid active management pressure. However, the investment risk is low, as the current valuation effectively assigns no value to that business.

Blackwattle pointed out that the Perpetual leadership team are "actively working to unlock shareholder value and rectify past missteps". Even if the funds management recovery falters, shareholders "should benefit from strong free cash flow and growing value in the corporate trust segment, which underpins much of the asset management structure."

Overall, this ASX 200 share may be materially undervalued, if Blackwattle is right.