Australian managers hit hard

Australian investment managers have been among the hardest hit by the global financial crisis (GFC), according to new data released by Watson Wyatt.

The Watson Wyatt research, making up the Pensions and Investments/Watson Wyatt World 500 rankings, revealed that the assets managed by the world’s largest 500 fund managers fell by over 23 per cent in 2008 to US$53.4 trillion.

In Australia, assets fell by more than the survey average, from US$691 billion last year to US$475 billion.

Commenting on the research, Watson Wyatt Australia's head of manager research, Hugh Dougherty, said 2008 had proved a dreadful year for investment managers, with the majority posting record losses.

“Even with the strong market recoveries since March this year, our expectation is that asset values will remain below 2007 levels, meaning the outlook for this year’s revenues and earnings in the sector remains poor,” he said.

“The assets managed by Australian fund managers fell by more than the survey average, down by 31 per cent for the year, with more managers moving down the rankings than up,” Dougherty said.

He said this result could be attributed to a high level of equity management by Australia’s largest managers, the underperformance of Australian equities vis a vis international equities and a weakening of the Australian dollar in the second half of 2008.

There were 15 Australian managers covered by the survey, which revealed that Colonial First State remained the largest Australian manager and ranked 122 overall, down 14 places form the previous year.

The other Australian managers on the list were Macquarie Bank ranked at 126, AMP at 135, National Australia Bank including MLC at 152, QIC at 172, Westpac including BT at 237, Suncorp at 260, Perpetual at 294, Challenger at 345, Perennial at 373, Platinum at 377, Maple-Brown Abbot at 420, IAG at 424, Lend Lease at 442 and Balanced Equity Management at 487.