Despite being a growing reservoir of funds under management, this critically important pool of capital is confronting mounting problems collating and disseminating key data in a timely manner.
The ratings house is pinning its growth strategy on a revamped methodology that increases the emphasis on governance to 25 per cent – a timely move considering APRA’s proposed reforms.
Canada’s CI Financial looks at further Aussie expansion
For CI Financial, the new controlling shareholder of multi-affiliate manager Grant Samuel Funds Management, Australia represents one of its three most important markets for growth. More local acquisitions and a roll-out of new products and strategies can be expected.
The acquisition of 80 per cent of GSFM last year was the first significant move by the Toronto-based CI Financial outside of Canada. The closest it had got to internationalising its operations until then was buying 25 per cent of Altrinsic Global Advisors, in which NAB also has 25 per cent. That firm is a global equities manager based in Greenwich. It maintains a small Sydney rep office.
On a visit to Australia last week, Anderson said the CAD$118 billion manager, which has been a public company since 1994, had made 15 acquisitions, all in Canada, up until last year.
He became chief executive of the firm last year but was previously CIO and CEO of subsidiary companies. He left in 2012 to head up Aston Hill Financial, also based in Toronto, before rejoining CI Financial following the retirement of CEO Stephen MacPhail.
“We are used to acquisitions,” Anderson said. “For our next stage, we have to look at the US, UK and Australia as the three countries we have identified for our growth.”
The GSFM acquisition allows CI Financial more flexibility in its geographic expansion in the region than buying a single manager. Because GSFM is also a third-party marketer of managers’ strategies, whether or not it is a shareholder, CI Financial should be able to help both its in-house managers and its own affiliates to distribute in Australia.
Anderson mentioned ETFs as a possibility. It has an ETF platform known as First Asset, which it acquired in 2015. It also has a sophisticated retirement products capability in Canada.
“One of the positives about coming here is that Australia is further down the time line in the retail space. Canada is just at the beginning,” he said.
For GSFM’s Australian-based affiliates, such as Tribeca Investment Partners, CI Financial would look for ways to add value by helping international distribution.
From an institutional perspective, Anderson predicted that the business could “double or triple” over the next five years.
He said that CI Financial did a lot of due diligence on GSFM before the acquisition. The deal was introduced by a mutual third-party partner, Epoch Investment Partners, for which both firms distribute products.
“It gave us a lot of comfort when the [GFSM] management came to us and said they wanted to maintain an equity stake in the business,” Anderson said. “It’s good to have partners who believe in the company.”
GFSM was formed by chief executive Andrew McKinnon in 2007, with the investment bank Grant Samuel as its majority shareholder. Senior management includes Damien McIntyre, as head of distribution, and Vivienne Lee, as senior manager of institutional. It has A$6.5 billion under management.
Apart from its interest in Tribeca and distribution arrangement with New York-based Epoch, GSFM markets Australian volatility specialist manager Triple3 Partners and LA-based Payden & Rygel.
