PIS and Russell strike distribution deal
Professional Investment Services (PIS) and Frank Russell have struck a deal to develop a new funds management group, Ventura Investment Management Limited.
Under the deal, which the two groups concluded late last week, the Frank Russell company would distribute its multi-manager funds through the new venture adding to intense industry speculation that its existing distribution relationship with the ANZ Bank is under threat.
Ventura, to be owned by PIS in conjunction with other dealer groups and advisers who will be offered an equity stake in the business, will offer Russell's series of sector specific and diversified multi-manager funds to PIS' existing clients on both a wholesale and retail basis. PIS will also have a minority shareholding in the new company.
PIS chief executive, Robbie Bennetts, heralded his group's new relationship with Russell last week as a major step in its strategy to expand its operations nationwide, but did not comment on any of Russell's other distribution arrangements.
Bennetts says the Russell deal reflects PIS' desire to extend into product management and is in line with the company's aim to further diversify its service options for advisers.
"The association with Russell provides the company and its advisers with greater flexibility, a wider range of options and enhanced control in terms of product," Bennetts says.
Both PIS and Russell are also believed to be examining the possibility of extending their alliance to offer the Russell funds through Ventura in overseas markets where PIS already has a presence, including New Zealand, the USA, Canada and Singapore.
But this and any further announcement is set to heighten speculation about the future of Russell's existing four year relationship with the ANZ bank, which distributes the Russell funds as part of its Gateway range of unit trusts.
It is understood that Russell, which sees gaining access to retail investors through third party distribution partners as one of its key forward strategies, is keen for the ANZ relationship to continue.
"We don't see ourselves as a product distributor but as a manufacturer of investment solutions for investors. In order to get to those investors we need a distribution network that is in touch with those investors," Frank Russell managing director Alan Schoenheimer says.
However sources close to ANZ say the relationship with Russell has been placed under extreme pressure by the bank's decision last month to team up with ING in a funds management joint venture.
This will effectively result in ANZ outsourcing its investment management activities and product development to ING.
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