The Australian operations of global fund manager HFA Holdings Limited (HFA) is showing signs of stability after overcoming the turmoil experienced by the local retail fund management market, the company’s chief executive has said.
HFA reported earnings before interest, taxes, depreciation and amortisation of $24.1 million a drop from 2009’s result of $40.2 millon.
The firm’s operating cash flow of $29.4 million for the year to 30 June, 2010, down from last year’s $42.5 million.
HFA chief executive Spencer Young said the company’s full year result is a “strong positive” it has dealt with the fall out of the global financial crisis.
“Our Australian business continued to feel the pressure from the structural upheaval of the Australian retail fund management market,” Young said.
“We are beginning to see evidence of a stabilisation in the local market and have recently re-positioned the business to maximise opportunities as the investment environment returns to more historically normal levels,” he said.
The company’s Australian operations – which was renamed Certitude Global Investments (Certitude) this month – contributed $13.1 million in operating income a figure down 48 per cent due to lower than average assets under management (AUM).
The decrease in Certitude’s AUM is attributed to net fund outflows and the final de-leveraging occurring from the business unit’s portfolios during the first half of the year, the company results said.
As at 30 June 2010, only $27 million in leverage remains in the HFA Asset Management branded products, the results said.
The Certitude fund flows were also affected by the withdrawal windows offered by the HFA Diversified Investment Fund totalling $235 million resulting in net overall outflows, and discontinuation of the $78 million management agreement with Signature Capital Investments.
In July, HFA announced the Certitude name would replace the HFAAM brand, with the HFA name retained as a sub-brand for a number of products.
Young said the re-brand and new open architecture model will allow a broader investment offering with the opportunity to expand its investment base beyond its traditional independent financial adviser base.
