Industry Funds Management (IFM), which oversees $34.7 billion in assets, will permanently lower investment fees for all of its products from September.
IFM, Australia’s ninth-largest fund manager by assets, will lower the management expense ratios (MERs) that all of its investors pay as increasing funds under management and positive returns buoy profits and help drive down the costs of business, chief executive Brett Himbury said.
“Put it this way: prices will be coming down across all asset classes, all geographies and investors,” Himbury said. “If investors are the people contributing to the growth of the business, they should also be the beneficiaries of that growth.”
The company, which manages infrastructure, fixed income, and private and listed equity funds, is completing a review that will determine how much the MERs can be lessened. The imminent fee reduction will be made from a “modest profit” as MERs have declined in aggregate by 20 per cent over the past four years as the company has grown, Himbury said.
Tristan George, product and pricing director at IFM, began assessing how much could be cut following the manager’s one-off rebate of 12.5 per cent of annual fees in November 2011.
Melbourne-based IFM, which is owned by 32 industry superannuation funds, continues to expand as it prepares to cut fees. It is hiring two people in London to specialise in infrastructure debt before relocating from its Old Broad St offices in the City to larger premises on nearby Gresham St, Himbury said.