International investment manager AIG Investments has opened an office in Australia, choosing Melbourne for its base after conversations with the New York-based Australian Consulate and the Victorian government, according to the global head of business development Steve Guterman.
AIG Investments manages around US$750 billion, of which only US$130 billion is external clients’ or non-affiliates’ money. It is a multi-asset class manager but most of its assets under management are in US and international fixed income. Guterman said Australian investors made up a “very small portion” of the US$130 billion, something he hopes to change by opening in Melbourne as “more of our potential clients are there than in Sydney”. The company’s insurance affiliate, AIG, is also based in Melbourne. Having such a large proportion of its FUM as its own or affiliates money has helped set AIG Investments apart from the competition, according to Guterman. “;When we bring a strategy to a client, it’s always something that we think has enough investment merit that we want to put our own money into the strategy,” Guterman said. “;We approach the market from the standpoint of: is this something we want to invest in? We don’t go from the other side of: what are the clients interested in buying?” Guterman said this approach saved AIG from investing in the highly structured vehicles that have “not performed well”. “It wasn’t because we didn’t have the opportunity [to invest in them]. We had a lot of investment banks calling us up…but we didn’t like the investments. We were not willing to put our own money into the structures, so we weren’t willing to put it in the marketplace,” he said. AIG Investments currently has one man on the ground in Melbourne, Clinton Grobler, and Guterman expects another hire will join him soon. Guterman hired Grobler last April from a US-based marketing position for a small hedge fund, about a year after AIG’s decision to move to Australia.
Future Fund chief investment officer Ben Samild said that FY24 has been a great year for alpha creation, thanks to strong returns in equities and, unusually, across multiple hedge fund strategies all at the same time. He reflected the past few years have been “a difficult time to be an asset owner and to generate positive returns for risk assets” but the Future Fund is tracking well of its long-term mandate.
Simon Hoyle and Darcy SongSeptember 4, 2024
