Credit Suisse Asset Management has cut its equity, fixed income, and balanced products, in exchange for a 25 per cent stake in Aberdeen Asset Management.
At 7pm on New Year’s Eve, Credit Suisse’s Global Investors group announced that it would be selling parts of its traditional asset management business to focus on its alternative investments operations.
Credit Suisse will now centre its attention on its Leveraged Investment Group and Property Securities businesses, which include private equity, hedge funds, and its Enhanced Commodities Fund.
The portfolios of Credit Suisse’s Australian equity and fixed income clients, which include some of Australia’s largest superannuation funds, will now be managed by Aberdeen.
Bill Bovingdon, chief executive of Aberdeen in Australia, said the addition of Credit Suisse’s assets could double, or even triple Aberdeen’s $8 billion funds under management. “It will put us among the largest 15 managers in Australia, certainly one of the largest fixed interest managers,” he said.
John Livanas, chief executive at AMIST Super, which is a client of Credit Suisse, said CSAM’s decision to get rid of the plain vanilla investments while keeping the alternatives was opposite of what he had expected.
“I hope the international heads are sensitive to the Australian market, where we will continue to invest, given our massive flows of funds,” he said. “I think that in this market, taking resources off the table is the worst thing you can do. It’s about people. I’ve never known a business to grow by cutting staff.”
Livanas said he wasn’t anticipating any major problems with the change of the guard, but that the fund would be conducting due diligence on Aberdeen. “We will be looking at their back office, their administration, their people,” he said.
Stephen Giubin, head of Credit Suisse in Australia, said that clients were obviously keen to know the details of how combining the businesses would work, but that he was not yet in the position to give specific details.
