[Weekly Wrap] Money on the move
Two funds management empires fall, while a new one is built.
Friday, May 10th 2024, 2:38PM
It wasn't that long ago AMP Capital and ANZ where the biggest players in the wholesale funds management world. Now they are no longer. Meanwhile, in retail land First Cape emerges as one of the biggest players.
ANZ’s announcement, last week, that it is to close down its $3 billion- plus wholesale business has surprised and disappointed many in the funds management industry.
It’s not many managers who can give away $15-20 million dollars of revenue and not seem too worried about it.
ANZ’s view is that it wants to focus on its retail business and it reports that wholesale funds under management have been flat, while retail grows.
Wholesale is made up by a varied bunch of clients including super funds, iwi, trusts and KiwiSaver providers.
They all have specific requirements around investing and reporting and are considered high touch thus more complex – and expensive – to manage compared to retail. Plus their fees are lower.
Interestingly, they all invest in ANZ’s underlying funds and there are no changes there.
One fund manager suggested to me it’s a case that ANZ hadn’t been “fertilising the garden.”
That is it had not invested in this part of the business.
It’s also true that in a reasonably short period of time ANZ has lost a significant amout of talent in the ranks of its portfolio managers.
As one of the largest fund managers, after the NZ Super Fund, it should be an organisation money managers aim to work for.
The $3 billion-plus does need to find a new home, especially for one of its clients AMP.
While the ANZ money is in play – there are also big changes thanks to the creation of First Cape. Three managers, Nikko, Mint and Castle Point have all lost mandates. The winner is Harbour – one of the entities making up First Cape.
As we understand Nikko lost about $800 million in fixed interest, while for the other two managers the loss was in equities and in the hundreds of millions of dollars each – not insignificant.
On an impact basis Castle Point is the hardest hit – and it comes at a time when its performance has been struggling.
Harbour is the winner and the questions asked are about capacity to manage the additional money.
For advisers the question too is what it means using a manager which is becoming the in-house manager for First Cape.
Advisers, who have given good support to Harbour, may now be questioning whether that is the home for their clients’ funds.
It’s certainly interesting times in the funds management world.
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