Colonial First State Investments (CFS) has decided to close its wholesale operations in New Zealand and transfer the business to Sovereign.
As a result of this move a number of Wellington based staff will have their jobs disestablished.
Head of Colonial First State New Zealand, Greg La Peyre, says that the decision to shift the business is "the final chapter in a journey which started a couple of years ago."
About a year ago CFS shifted its retail operations to Sovereign. While the funds are still managed by CFS, they have been rebranded and Sovereign has responsibility for marketing them.
La Peyre says a similar approach is being taken in the wholesale area and clients will be given the option of shifting their money to the Sovereign.
Although CFS is closing its business here it will continue to support Sovereign with material and fund manager visits.
La Peyre says the decision to move the retail money to Sovereign has worked has worked well as Sovereign has a very powerful platform for distribution.
"We think we can raise substantial assets through (the Sovereign) channel," he says. "We are looking for substantial flows in the next 12 months."
La Peyre says the decision was made because of Sovereign's distribution strength as opposed to performance.
A lot of wholesale mandates have been up for grabs recently, including Government funds, however CFS hasn't won many of the beauty parades.
La Peyre says CFS has won some business in the past 12 months and he is not disappointed with the performance of the wholesale unit.
Going forward he expects CFS will be able to build on its presence (the group manages more than $2.5 billion in New Zealand) by using Sovereign.
Sovereign already has a wholesale investment business unit, as does fellow Commonwealth Bank of Australia subsidiary ASB Bank.
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