CBA to tie up 452 with strategic stake
By George Liondis
THE Commonwealth Bank of Australia (CBA) has acknowledged its bid to grab a stake in 452 Capital was primarily motivated by a need to fence off its exclusive right over the boutique manager’s retail distribution.
A spokesperson told Money Management the bank needed to “lock in” the exclusive agreement, which gives CBA-owned Colonial First State the sole right to distribute 452 products to the retail market, before it expires in February next year.
The boutique manager, run by former Perpetual investment head of Australian equities Peter Morgan and former Goldman Sachs director Warwick Negus, signed the deal with the bank just after its launch in 2002.
“We wanted to lock in that distribution arrangement…We would also be able to share in the revenue of 452’s retail and large institutional funds under management,” the spokesperson said.
The spokesperson did not comment when asked how the deal related to Colonial First State’s review of its internal funds management operations.
The review is examining whether the group’s underperforming investment management division should be spun out to operate as a separate business unit to Colonial’s distribution and platform arms.
Negus said he was unaware of the review’s focus, but said “most people assume there will be some changes to Colonial”.
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