IOOF buys into ethics

IOOF will be launching a retail ethical fund early next year, says managing director Rob Turner.

The company has taken a stake in a new boutique ethical investment company called Sustainable Investment Research Institute (SIRIS), however, Turner would not be drawn on how much money IOOF has put up.

According to the company's 2000 annual report, IOOF invested $6 and it holds 50 per cent of the shares. IOOF loaned SIRIS $9,994 during the 2000 financial year and it is suspected the major investment in this ethical fund manager will be in this financial year.

SIRIS is being run by Mark Bytheway, formerly of Challenger, and a relative of IOOF chairman Lindsay Bytheway. He is currently looking for wholesale mandates for the fund manager.

The annual report says IOOF is also seeking further equity partners and investors for SIRIS.

"We plan to offer our members the ability to invest in ethical organisations and be given the opportunity to eliminate industries and companies from investment portfolios that the investor may not consider appropriate," Turner says.

IOOF has reported a flat pre-tax operating profit of $4.2 million, up from $4.1 million in the 1999 financial year.

However, operating revenue for the fund manger was up considerably to $64.5 million in the year-end June, 2000 compared to $44.8 million in 1999.

Speaking at the company's AGM, Turner said it had been a solid year of progress for the fund manager, despite the flat operating profit. He said inflows for the first quarter of this financial year were ahead of budget-having spent last year creating new products.

The subject of demutualisation was again raised at the AGM. Bytheway says the board is continually reviewing the prospect.

"There are advantages to being a mutual structure, but expansion will mean a demand on our capital," he says.

"We are not planning demutualisation in the future, but will continue to review the situation. The subject will remain a special interest of the board."