Australian Ethical sees 24% quarterly FUM rise
Australian Ethical’s acquisition of Altius Asset Management has helped its funds under management (FUM) grow to nearly $13 billion.
Announcing its quarterly results to 30 September 2024, the ethical investment manager’s FUM increased by 24 per cent from $10.4 billion in the previous quarter to $12.9 billion.
The growth was largely boosted by its purchase of Altius, which reached completion on 25 September after it was first announced in May earlier this year. The combined Australian Ethical and Altius fixed income capability has resulted in a sustainable fixed income team of seven, an expanded bond fund portfolio, and Australian Unity becoming one of Australian Ethical’s largest institutional clients.
According to Australian Ethical, the deal added $1.9 billion in FUM. The 24 per cent FUM rise was also underpinned by positive organic net inflows of $96 million and strong investment performance.
However, this was down from net inflows of $211 million in the three months to 30 June – marking a decline of 55 per cent. This was attributed to superannuation flows being lower due to Australian Ethical Super’s ongoing administration transition to super technology platform GROW Inc.
John McMurdo, Australian Ethical managing director, commented: “We continue to see organic and inorganic growth across our business, and I’m delighted that we have now reached a new milestone of almost $13 billion in FUM, which has grown by 24 per cent this financial year so far.
“The acquisition of the Altius Asset Management business not only adds to FUM, it strengthens our position as one of Australia’s leading ethical fund managers and aligns with our strategy to further build our investment team capability.”
Moreover, McMurdo said its custody administration to State Street is on track to be completed by 1 November, and the transition to the GROW Inc superannuation administration platform from Mercer will also be completed next month.
“Together these changes will deliver a strengthened business platform, as well as improved efficiencies and unit cost savings, as we head into our next phase of growth supported by the increasing demand for our style of investing.”
In its full-year FY24 results, Australian Ethical saw an 80 per cent growth in its statutory net profit after tax from $6.6 million to $11.8 million. The strong result was helped by $100.5 million in revenue, up by 24 per cent from $81.1 million in FY23.
The firm also confirmed earlier this month that its non-executive director Mara Bun will step down from the board of Australian Ethical Investment and Australian Ethical Superannuation on 31 October. Bun has sat on the board for the past 11 years and is a member of the people, remuneration and nominations committee, and its investment committee.
A search for her replacement on the board is underway, the firm said in an ASX statement at the time.
AUTHOR
Jasmine Siljic
Recommended for you
Bennelong Funds Management chief executive John Burke has told Money Management that the firm is seeking to invest in boutiques in two specific asset classes as it identifies gaps in its product range.
Responsible investment performance concerns have lessened as the market hits $1.6 trillion in AUM, according to RIAA’s annual report, but greenwashing fears among asset managers are on the rise.
Research by Morningstar has found fixed income funds are bucking a general trend around managed fund fee dispersion with a smaller fee dispersion compared to equity ones.
As investors seek to diversify their portfolios, the naming of bond labels has broadened out to include green, social and impact bonds, according to the annual RIAA report.
