First Sentier Investors (FSI) has confirmed it will be handing back some 6 per cent of its $238 billion funds under management following the closure of several funds.
This will amount to some $14 billion being returned to Australian investors as the firm implements changes to its investment capabilities in the country.
Some 30 investment professionals are affected and “a small number” of these will be redeployed within other roles at the business.
The changes are the result of “shifting industry dynamics such as client consolidation, internalisation of investment management, and ongoing margin pressures as impacting the outlook for investment businesses”, FSI stated.
The funds that will be closed are:
· CFS Wholesale Indexed Australian Bond (CFSIL)
· First Sentier Australian Bond (CFSIL)
· First Sentier Diversified Fixed Interest
· First Sentier Global Credit Income (CFSIL)
· First Sentier Global Credit Income (PCT)
· First Sentier Equity Income (CFSIL)
· First Sentier Equity Income (PCT)
· First Sentier Target Return Income (CFSIL)
· First Sentier Developing Companies (CFSIL)
· First Sentier Future Leaders (CFSIL)
The largest of these are the CFS Wholesale Indexed Australian Bond (CFSIL) fund which has $1.97 billion in assets under management and the First Sentier Global Credit Income Fund (CFSIL) which sits at over $1 billion.
The PCT funds will be closed but CFSIL are looking for alternate managers for the funds where they are the responsible entity and it is understood this will happen in the next month.
David Allen, global head of investment management, said the four teams have been identified as lacking the capacity to achieve the growth targeted by the firm.
“Our growth strategy requires us to have a clear focus on capabilities that are most relevant to our clients and where possible, simplify our business.
“We have looked across our business in Australia to ensure each of our investment capabilities has sufficient client demand to be commercially material and sustainable.
“While these teams have delivered strong client outcomes over a long period of time, they have been unable to achieve growth that meets our ambitions.”
An FSI spokesperson indicated the firm will work with clients to transition, or hand back, the portfolios.
Going forward, FSI said it will seek to add additional global and regional capabilities which align with the evolving needs of its clients.
The investment manager currently has 16 strategies covering Australian equities, infrastructure and real estate and fixed income.
