Macquarie hot on ailing CFS’ heels

Colonial First State (CFS) is close to losing its tag as Australia’s biggest fund manager to a boisterous Macquarie Bank, with the latter’s funds under management growing at 9 per cent to stand at almost $71 billion in the December 2004 quarter.

The latest Assirt Market Share report showed Macquarie’s rapid growth was in stark contrast to CFS’s $1 billion loss for the quarter, due to investors pulling out of its in-house managed funds thanks to several years of disappointing returns. The loss for CFS and gain for Macquarie occurred in a climate of strong overall market performance, with the ASX 300 returning 11 per cent for the quarter.

CFS’s loss in such a generous climate has fuelled concern it has too much money under its belt to outperform the market.

Nevertheless, with its domination in the platform space, CFS is still the biggest fund manager in Australia, holding approximately $78 billion in total investment management or 11 per cent of the market with Macquarie holding 10 per cent.

The next biggest investment manager was AMP with 8 per cent of the market, then State Street Global Advisers with 7 per cent and ING/ANZ with 6 per cent.

Although Macquarie experienced healthy growth in its wholesale funds and retail managed funds, most of its growth came from listed investment vehicles which contributed $3.5 billion to its whopping $5.8 billion gain.

But Macquarie was not the fastest growing investment manager, with Vanguard Investments achieving over 18 per cent growth in the December quarter and Barclays Global Investors achieving almost 11 per cent growth. Vanguard’s rapid growth helped it slip into the top ten biggest funds managers at the expense of UBS Global Asset Management. Barclays’ growth helped it climb to number seven on the list.

Rounding out the top ten was AXA which came in at number six, Deutsche Asset Management at eight and BT/Westpac at nine.