Insurance Australia Group (IAG) is facilitating the outsourcing of its Australian equities team to form a new boutique to be backed by MLC.
The IAG equities team, under joint heads Simon Rutherford and Darren Thompson, manages about $3 billion, mostly for the inhouse sources of the insurance business and Clearview. However, there are some separate mandates including those from Sunsuper. Most of IAG’s $13.5 billion under management is in Australian fixed interest and cash. It is understood that discussions about the outsourcing have been progressing for several months. IAG initially considered remaining as an equity partner in the new boutique itself, but more recently decided to bring in a third party – MLC. A spokesperson for MLC said the company did not comment on market speculation. MLC, however, has a long track record backing new boutiques, but if it goes ahead with an equity stake this would be the first time it has adopted the incubator or multi-affiliate model, rather then the purist multi-manager model in which it is easier to hire and fire managers. MLC was a seed investor with Portfolio Partners in the 1990s, when that group left the former County Investment Management. The success of Portfolio Partners is widely regarded as having pushed the trend to boutiques in Australia. MLC also became the first and largest client of its former inhouse equities team when they formed Concord Capital. It is understood IAG is looking to remain a client of the equities team on a contractual basis.
AustralianSuper’s appointment of a general manager, retirement to replace Shawn Blackmore, which follows ART's redeployment of Kathy Vincent to chief operating officer, shows that mega funds are back-pedalling on the strategy of having dedicated retirement C-suite executives. The role had been touted as the next big thing in super funds' organisational structures, but experts say what matters is there is senior accountability for decumulation.
Darcy SongDecember 4, 2024
