Snowball considers restructure to exploit changing market

financial-services-business/market-volatility/money-management/

4 March 2009

| By Benjamin Levy |

Snowball Group is considering a restructuring of its investment committees in its subsidiary financial services business, Outlook Financial Solutions and Western Pacific Financial Group, to achieve greater co-operation between the two committees, increase its market scale and exploit changing market behaviour.

Snowball will place common members of the dealer group into both investment committees to achieve greater collaboration between the two teams and increase their access to market intelligence and ability to move quickly among different asset classes to “relentlessly drive their scale”.

Snowball managing director Tony McDonald told Money Management that he believes there will be a fundamental change in the way the market worked in the future. Once market volatility settled, there would be much greater disparity in the performance of the different asset and even sub-asset classes, and the company needed to become more flexible to exploit market movements quickly and drive their scale.

The change would mean that Outlook Financial Solutions and Western Pacific would adopt more common investment practices.

As part of its investment philosophy, Western Pacific has focused on a deeper value bias and an alternative asset class with more frequent asset allocation changes, while Outlook Financial Solutions has focused on long-term asset allocations and costs.

The change in investment practices would only affect the nature of its client portfolios, not the advice it gives its clients, McDonald said. Snowball divides its clients into five different bands of risk segments for investing.

“[The change is] already happening because we’ve got more common people on each of the investment committees, and the second thing is … they’re already linked,” McDonald said.

“There is a real possibility that we’ll create an overarching investment committee.”

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