In the 1990s the Backstreet Boys and Take That topped the charts and BT Investment Mangement Ltd. dominated the Australian funds management scene. Like the boy bands, Emilio Gonzalez says the fund manager is planning a comeback of its own.
“We used to dominate in the 1990s,” says Gonzalez, chief executive of BT Investment Management. “Our brand was strong. We need to re-build its presence.”
Gonzalez plans to rebuild BT’s fan base with the help of financial planners.
“At the moment industry flows are poor,” says Gonzalez. “We want to be the first port of call for solutions for St. George and Westpac private clients.”
BT Investment management had $1.4 billion of net outflows in the nine months to June 30, $450 million from institutional clients and about $900 million from retail funds and individual managed accounts. A further $500 million redemption by an institutional investor is expected to be settled by September 30.
Westpac Banking Corp. has a 60 per cent stake in BT Investment management. St. George Bank and Westpac together have 95 private bankers. Gonzalez says these advisers can help re- establish the BT Investment Management brand with the Australian individual investor.
BT Investment Management will go on national road shows in a push to get on the recommended and approved lists of advisers, says Gonzalez.
“The mandate I have is growth and diversification,” he says.
BT Investment Management has received a $300 million commitment for cash and fixed income investment by an institutional investor. A $200 million commitment to invest in Australian equities has also been received.
The company’s fee revenue margin was 0.34 per cent in the six months to March 31, similar to the same period to March 31 2010.
Gonzalez is confident the acquisition of J O Hambro Capital Management for $314 million will be successful. He says the two firm’s interests are being aligned. There is a 10 year remuneration scheme in place for Hambro staff, subject to fund growth and revenue, that will help keep senior investment staff at the London-based firm.
BT Investment Management has had a staff member in Europe for the last two months working with Hambro.
“These businesses don’t come through investment banks,” says Gonzalez. “If they do they have problems.”
BT Investment Management is selling shares worth as much as $275 million to pay for the Hambro acquisition. The share sale will close on September 9.
After the Hambro acquisition closes BT Investment management will have $45.5 billion in funds under management.