Fund manager BNP Paribas Investment Partners has poached Peter McPhee from Mercer Global Investments to spearhead its push to establish a retail presence in Australia.

McPhee has been made head of retail distribution at the fund manager, which has traditionally held the vast majority of its funds on behalf of institutional investors.

The firm's decision to pursue the retail dollar comes as a reaction to the growth in self-managed superannuation funds (SMSF), both in numbers and scale.

"SMSFs increasingly want to bypass the master trusts and invest directly with fund managers. We needed more senior resources on the retail side to deal with that," managing director Robert Harrison said.

The firm already has $2 billion of retail money under management, which makes up just 12 per cent of its total assets under management.

Harrison said the creation of the job as head of retail distribution emphasised the growing importance of the retail business to the group.

BNP Paribas is one of a number institutionally-focused managers fighting for market share in Australia's flourishing retail market.

Last month, boutique investment management Perennial Investment Partners announced it had taken back its retail operation, which had originally been outsourced to parent company IOOF.

Perennial hired Brian Thomas to lead the retail drive and plans to promote its products to financial planners.

The Australian arm of United States-based manager T Rowe Price is also said to be considering setting up a retail operation.