Greg Cooper, chief executive of Schroder Investment Management Australia Ltd., expects the number of Australian fund managers who specialise in managing local stock portfolios will shrink.
There are about 140 Australian equity managers, says Cooper, who describes the number as “ridiculous”.
“There is not enough room” for 140 Australian equity share asset managers, says Cooper. “There will be consolidation.”
Banks and resource shares make up nearly two-thirds of the market value of the Australian stock market. That means there is not the breadth of different industries and companies to support so many asset managers, says Cooper.
Schroder has 35 investment personnel spread across three teams, he says. It recently hired Marcus Burns to work in the firm’s Australian equities team.
Burns, who will analyse smaller Australian companies, will join a team that has 13 portfolio managers and analysts.
Schroder has 75 people in Australia.
Cooper is not bullish on stocks in the year ahead.
“The simple reality of the world is that it is awash with debt,” says Cooper.
“The period we’re in now is a period of volatility in asset markets,” he says. “I don’t see a catalyst for the markets.”