Ethical manager closes after 6 years
Ethical fund manager, Ethical Partners, is understood to have closed up shop after six years in business.
The firm was established in 2017 by Nathan Parkin as investment director and Matt Nacard as chief executive and launched its first fund – Ethical Partners Australian Share – in August 2018.
Parkin was formerly the deputy head of equities at Perpetual Investments where he managed its Australian Share, Industrial Share and Ethical SRI funds. Meanwhile, Nacard was the co-head of Asian equities at Macquarie Bank.
According to the Australian Financial Review, the firm will return around $2 billion to investors.
The firm managed over $2 billion in assets on behalf of super funds, charities, foundations and other institutional investors. In line with its naming, the pair implemented an ethical approach to investing and sought to invest responsibly.
“Ethical Partners believe that a genuine and integrated approach to assessing a company’s management of ESG is fundamental to assessing both investment risks and the investment opportunities that are presented by the changing world in which we live. Our active company engagement and wider advocacy program is also integral to our approach to responsible investment.”
A statement on the website regarding its flagship fund said it was in the process of winding the vehicle up.
“The Ethical Partners Australian Share Fund is a unit trust that is no longer open for new or additional applications. Ethical Partners Funds Management is currently working with the responsible entity of the Ethical Partners Australian Share Fund, Equity Trustees Limited, to wind up the fund.”
Money Management has reached out to Ethical Partners for comment.
The decision comes amid a tricky time for active managers, with Morningstar stating Australian active asset managers will have to fight against passive players and industry superannuation funds for future fund flows.
It said it was expecting funds under management (FUM) and earnings to recover from the lows of fiscal year 2023, with some revival in investor interest expected once interest rates fall. However, performance would be insufficient to reverse the share of funds lost to passive funds, especially for boutiques.
Morningstar equity analyst Shaun Ler said: “We anticipate the average earnings growth to subside in the medium term due to fee compression, cost inflation, and as the rate of net flows normalises.”
Earlier this year, First Sentier Investors closed up four of its investment teams covering Australian fixed income, global credit, equity income and emerging companies. The changes were 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.
AUTHOR
Laura Dew
Recommended for you
BlackRock, in collaboration with iCapital and GeoWealth, has unveiled a model portfolio that delivers access to both private and public market assets in a single account, following adviser demand.
Magellan has confirmed the new leadership of its active infrastructure ETF once head of investment, Gerald Stack, exits in July.
Vanguard has indicated it is actively trying to meet the demand for international ETFs with its next ETF launches sitting in this space.
Dubious marketing strategies involving financial advisers are among reasons that research house SQM Research has put the private credit space on alert.
