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ANZ Private partners with asset manager for bespoke bond solution

By Rhea Nath
3 minute read

The bank has announced a new offering for its ultra-high-net-worth clients in the form of direct bond portfolios.

ANZ Private Bank has entered an agreement with Income Asset Management (IAM) to provide clients with a bespoke bond solution.

The offering will be managed by ANZ’s chief investment officer, Lakshman Anantakrishnan, with a minimum $50 million investment to provide access to an individual bond mandate.

The direct bond portfolios come amid growing demand for such opportunities in a higher interest rate environment, ANZ said, and ahead of a forecast easing cycle later this year.

Unlike a traditional portfolio, the assets will be held in an entity name rather than a fund structure and can be tailored to the individual needs of each client, with an initial focus on AUD denominated bonds from global and domestic issuers.

“We’ve seen strong investment from clients already and we expect this demand to continue given the current yields on offer and relative security provided by the asset class,” said ANZ Private general manager James Dunlop.

He added that it was critical for the bank to have someone like Anantakrishnan running bond portfolios, which he described as a “rarity” in the private wealth market.

Anantakrishnan has been CIO at ANZ Private since late 2021, prior to which he served as CIO at AMP for almost two years.

His vast experience includes almost a decade as head of portfolio management at Credit Suisse, where he built out the investment process and ran both single asset class and multi asset mandates.

Commenting on the offering, Anantakrishnan observed: “With the equity risk premium under pressure, the yield available on high-quality bonds is an attractive proposition and the offering allows us to tailor individual portfolios that are unique to the needs of each client.”

ANZ Private will utilise the IAM platform to build portfolios and trade bonds held with sub-custodian JP Morgan.

“With bonds offering the best yields in decades, we have witnessed a shift in the asset allocation preferences of high-net-worth investors seeking to diversify away from equities,” observed Jon Lechte, IAM chief executive.

Earlier this year, ANZ had flagged its optimism for fixed income, outlining it is positioned overweight international and Australia fixed income for the year ahead, leaning on bonds to deliver solid risk-adjusted returns in an increasingly volatile period.

According to the bank, 2024 could mark the end of the bond bear market, with fixed income allocations set to play a key role in building more resilient portfolios.