Fiduciary investors can do more to mitigate investment risk and seek returns than develop well-thought-out strategic asset allocations. SIMON MUMME reports.
Big global firms benefit from staff ownership
Staff ownership of funds management firms was concentrated among boutiques, but not confined to them, said George Walker, the chief executive of US-based Neuberger Berman, talking about the differences for a large manager in being staff or institutionally owned. Australian super funds have had a love affair with boutique managers since the mid-1990s, after MLC, a bellwether multi-manager, backed the nascent Portfolio Partners spin-off from County Australia. Since then, boutiques have mushroomed, especially Aussie equities boutiques. Australia had been described, by former Russell Investments chief Alan Schoeinheimer, and others, as ‘the land of boutiques’. Russell, Mercer and Intech (now Ibbotson Associates) have published studies to show that boutiques, indeed, outperformed for various reasons and up to a point. Capacity was certainly a big limitation and early investors enjoyed more rewards than the later ones.
Where AMP and AXA reap inflows: themselves
If AMP succeeds in its takeover bid for AXA Asia-Pacific (AXA), it’s likely the merged entity would be heavily reliant on internal financial advice channels to continue reaping the vast majority of its retail investment flows and funds under management (FUM), according to research from Citi. AMP currently sources 90 per cent of its $36.3 billion in funds under management (FUM) from internal operations, such as its network of tied financial planners, according to Citi’s analysis of Plan for Life’s records of FUM and flows in the 2009-10 financial year. Importantly, the paper, Trends in Wealth Management Supplement, which followed an October paper Trends in Wealth Management: a growing role for intrafund advice, did not concern the wholesale funds managed by AMP in discrete mandates.
Mega super mergers move closer to reality
First State Super and Health Super have attempted to short-circuit the reason many proposed super fund mergers do not proceed, with the structure of the board of the successor fund already largely agreed. Meanwhile, the woman whom most expect to be CEO of the combined Equipsuper-Vision Super has revealed that one-third of the new scheme’s $8 billion will be managed internally. First State Super (FSS), the $20 billion NSW public sector scheme, and Health Super, the $8 billion Victoria-centric health industry fund, announced last month they were in due diligence to merge. FSS CEO Michael Dwyer made the initial approach earlier this year. The yet-to-be-named successor fund, slated to come into existence on July 1 next year, will be chaired by existing FSS independent chair Thomas Parry, while the other eight FSS positions – four nominated by Unions NSW, four by the NSW State Government – will be retained.
Fundamentals dominate long/short market
Fundamental equity long/short managers have attracted about $4 billion in funds under management to claim the lion’s share of the market as assets in quantitative strategies fell a long distance from a peak of $8 billion in 2007, according to Goldman Sachs. Melbourne boutique JCP, whose fundamental 150/50 strategy has neared capacity at $1 billion under management, is believed to be among the small group of managers that have come to dominate the equity long/short space. In an October research note, 130/30 Strategies: Relaxing Constraints To Target Higher Returns, Goldman Sachs stated the amount of capital in fundamental long/short strategies in 2007 was dwarfed by the $8 billion in quantitative counterparts, which is understood to have fallen to about $2 billion.
US manager buys into Aussie fees debate
The campaign by asset consultants Frontier and JANA for more standardisation of fees, including performance fees, gained support yesterday from a visiting US-based global manager. Russell puts on insto BDMs
Russell Investments has made two new institutional business hires, and re-deployed an existing executive as it dedicates resources to servicing industry/government super funds, financial institutions and asset consultants.
Custody body calls for award nominees
The Australian Custodial Services Association (ACSA) is calling for nominations for its annual awards which recognise outstanding contributors to the Australian custody and investment administration industry.
Major funds mull master custody’s future
Three of Australia’s largest superannuation funds will discuss their evolving relationship with custodians at the 14th Annual Investment Administration Conference, coming up on February 15.
Shorten’s pitch: the new super bargain
Bill Shorten
Fund rater role for $35bn up for grabs
Colonial First State’s Institute of Advice, the centre of knowledge for Commonwealth Bank-affiliated dealer groups representing $35 billion under advice, is tendering its fund ratings contract amid signs the incumbent faces a tough battle.
Major funds mull master custody's future
Three of Australia’s largest superannuation funds will discuss their evolving relationship with custodians at the 14th Annual Investment Administration Conference, coming up on February 15.
