Australian funds management firm Equitilink has taken a strategic decision and decided to exit the retail business internationally and focus on the wholesale side.
Equitilink has been offering its Australian based funds in New Zealand for 10 years and has gathered about $50 million in funds.
The main funds it promotes in New Zealand are its Resource Link, World Link and Australian equities funds.
New Zealand representative Paul Lyons says retail business is becoming uneconomic for the small and mid-size funds management firms and Equitilink has adopted a corporate strategy of focusing on the wholesale industry.
“It’s a hard road to hoe,” he says. “Players in the middle ground are struggling to make money.”
However, he believes there is room for the smaller, niche operators such as Coronet Asset Management.
Equitilink’s first wholesale mandate in New Zealand is a deal with the Aegis master trust which is being used by financial planning firms Reeves Moses and Broadbase and Northplan.
Lyons expects this mandate has the potential to grow to $20 million quite quickly. He says winning mandates such as this one is more economic than plugging away at the retail market.
Lyons says further rationalisation within in industry is inevitable, what surprises him is how long it is taking to happen.
Since the company made its decision to close the retail New Zealand business there have been a number of approaches from other fund managers to buy the Equitilink “book”.
Lyons says its not for sale and Equitilink will continue to service those investors. .
Australian funds management firm Equitilink has taken a strategic decision and decided to exit the retail business internationally and focus on the wholesale side.