CFS sources replacement managers after FSI investment team closures
Following the closure of four investment teams last month by First Sentier Investors, Colonial First State has proposed multiple replacement managers for the CFSIL funds.
It was announced in April that FSI would be closing its Australian Fixed Income, Global Credit, Equity Income and Emerging Companies teams. These teams encompassed 10 funds combined, affecting $14 billion in assets under management.
The changes are the result of “shifting industry dynamics such as client consolidation, internalisation of investment management and ongoing margin pressures as impacting the outlook for investment businesses”, the firm stated.
At the time, David Allen, FSI global head of investment management, said the four teams have been identified as being unable to achieve the growth targeted by the firm.
Several of the affected funds are Colonial First State Investments Limited (CFSIL) funds, and CFS has now announced it has sourced replacement managers including Janus Henderson, Longwave Capital and Macquarie, subject to due diligence.
In a statement, CFS said: “CFS has been actively sourcing well-credentialled replacement investment managers. Each replacement manager has a strong track record in the respective asset class and strong research house ratings.
“We’re pleased to update investors with the progress of our review and that we are working to finalise the appointment of the proposed replacement managers in June 2024.
“FSI has committed to continuing to manage the funds in an orderly and prudent manner until the transition is complete.”
All proposed managers are subject to finalisation, due diligence and implementation, and portfolio transitions are expected to be completed from June 2024 onwards.
The replacement managers proposed are:
| Investment option | Proposed replacement manager |
| Developing Companies (via CFS Managed Investment Fund) |
Macquarie Australian Emerging Companies |
| First Sentier Developing Companies (via FirstChoice) |
Longwave Australian Small Companies |
| First Sentier Future Leaders |
Investors Mutual Future Leaders |
| First Sentier Equity Income |
Martin Currie Australian Equity Income |
| First Sentier Target Return Income |
Daintree Core Income |
| First Sentier Australian Bond |
Macquarie Australian Fixed Interest |
| First Sentier Global Credit Income |
Janus Henderson Diversified Credit |
| First Sentier Diversified Fixed Interest |
Macquarie Dynamic Bond |
| CFS Index Australian Bond |
BlackRock Investment Management |
Source: CFS, May 2024
AUTHOR
Laura Dew
Recommended for you
Commentators have said Australian fund managers are less knowledgeable compared with overseas peers when it comes to expanding their range with ETFs and underestimating the competition from passive strategies.
VanEck is to list two ETFs on the ASX next week, one investing in residential mortgage-backed securities and the other in Indian companies.
Perpetual outflows have risen by 134 per cent from the previous quarter as the result of client mergers and rebalancing including $2.5 billion in outflows at Pendal Asset Management.
ClearBridge Investments has expanded investor access to its global infrastructure investment strategies through the launch of three active ETFs on the ASX.
