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IFM cries foul at parliamentary inquiry

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IFM Investors has slated the queries it has received from a parliamentary committee, noting its company has copped more scrutiny than any of its competitors in the investment management space.

IFM has made the comments in a letter sent to the House of Representatives standing committee on economics, responding to requests in November to issue responses to committee queries. 

As detailed in the letter sent on 17 December, IFM noted it is the “only funds manager called to appear before this inquiry” into the superannuation sector, having fronted the committee twice over a year, while its parent company Industry Super Holdings appeared once. 

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“None of IFM’s competitors have been called before the inquiry (Macquarie appeared in its capacity as a bank, not for its funds management business),” IFM wrote. 

The group also said it had responded to almost 100 questions in writing from the committee, all but three of which were from committee chair and Liberal MP Tim Wilson. 

“IFM has no objection to assisting the committee in its oversight of the financial services sector and is supportive of the role of the Parliament in this endeavour,” the letter stated. 

“However, this oversight should not place one sector or institution at a competitive or commercial disadvantage to others.”

IFM has previously faced scrutiny around its executive remuneration from the committee as well as other figures in the government, having been criticised by Mr Wilson and financial services minister Jane Hume as being too opaque. 

The matter has been further fired up by accounts of former executive director Frederic Michel-Verdier receiving a severance package that included bonuses of up to 20 million pounds (around $36 million worth) after he was at the centre of a lawsuit where he was accused of sexually harassing former infrastructure analyst Nathalie Abildgaard.

But during his last appearance before the committee on 6 November, IFM chief executive David Neal defended the company’s choice to not publicly disclose wages. 

Mr Wilson had also asked if the company could reveal how many non-disclosure agreements it had in the past decade related to human resources issues or sexual harassment, to which it declined to answer.

“The number of such agreements is not publicly available and has not been sought from any other fund manager,” IFM responded to the question on notice. 

“Disclosure of this information could therefore put IFM at a commercial disadvantage.”

IFM further protested Mr Wilson asking if its chair, Greg Combet, who is also the chair of Industry Super Australia and Industry Super Holdings (ISH), would appear before the committee to represent the fund manager.

“IFM has fully cooperated with this inquiry for over 12 months, sending three witnesses – its current chief executive, its former chief executive and its global head of infrastructure – to appear before the inquiry. Furthermore, IFM’s deputy chief executive has appeared on behalf of ISH,” its letter stated.

“To IFM’s knowledge, the committee is not seeking to call the chairs of any other fund managers before it, nor has any other non-operational holding company of a financial institution been called.”

The company also declined to answer a question around how much of its funds under management (FUM) had come from Australian super funds. IFM’s FUM had increased by around $20 billion from the previous financial year to $160 billion.

The group stated it could not provide further clarity around the composition of its FUM for fear of identifying individual clients or transactions, placing the firm at a competitive disadvantage and regulatory risk.

 

But when he appeared before the committee on 6 November, Mr Neal estimated a little under half of the company’s FUM had come from super funds.

 

 

IFM cries foul at parliamentary inquiry
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Sarah Simpkins

Sarah Simpkins

Sarah Simpkins is a journalist at Momentum Media, reporting primarily on banking, financial services and wealth. 

Prior to joining the team in 2018, Sarah worked in trade media and produced stories for a current affairs program on community radio. 

You can contact her on [email protected].

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