Nearly every Australian has super, but its settings don’t work for every Australian, according to the First Nations Foundation, which is advocating for changes around estate planning and the preservation age to make the system fairer.
Betting against acts of God is a great way to make money, but institutional allocations to natural catastrophe reinsurance have stayed relatively static even as some managers are generating double-digit uncorrelated returns.
The rise and rise of Bank of Montreal GAM
(Pictured: Barry McInerney)
Bank of Montreal’s asset management business, which opened a Sydney office in 2013, may well be the fastest growing fund management firm in the world. Barry McInerney, co-chief executive in charge of asset management outside Canada, outlined some of his plans for the region.
BOM Global Asset Management has expanded its funds under management 500 per cent over the past five years, last year doubling in size with the acquisition of Foreign & Colonial Investment Trust of the UK (F&C), and currently sits at C$300 billion (A$307.5 billion). It opened an office in Abu Dhabi in 2012 and continues to expand sales and service in Hong Kong and Singapore.
The firm launched ETFs in its home market about five years ago and now has about 25 per cent of the market with 60 ETFs. It launched three ETFs in Hong Kong last year and intends to have a global ETF business to complement its active strategies, McInerney said in an interview last week. It would launch in Europe this year and Australia was on the radar too. He believes the line between active and passive is becoming blurred. Most of BOM GAM’s ETFs are smart beta funds.
“We have been expanding quickly,” he said, “and will probably focus more on organic growth in the future. We want a broad base of global capabilities and to be in each region. We decided that we really needed to be in Australia as well as the Middle East. We defer to the [regional] leaders for what strategies are the most relevant.”
Because of the sophistication of the Australian market, BOM GAM decided to take its time and start with the launch of two funds – a global absolute returns fund from subsidiary Pyrford International, which already had MLC as a discrete client, and a global emerging markets fund from subsidiary Lloyd George Management (LGM). BOM GAM has a range of 100 per cent-owned boutiques obtained by acquisition and where the cultures have been maintained.
“We love our boutiques but we’re not a multi-affiliate manager,” McInerney said. “We’ve demonstrated that we can get boutiques and retain their cultures. We have a global distribution model. The boutiques are there to run money. We’ve seen the investment performance of boutiques improve under the BOM umbrella.”
Ravi Sriskandarajah was recruited in July 2013 to start the Australian office. He had previously about 13 years experience at Merrill Lynch and BlackRock. The firm has Australian clients in Pyrford’s and LGM’s absolute returns, frontier and Asian funds and an ESG advisory client with F&C.
“Ravi will be selectively introducing other strategies here,” McInerney said. “We have some strongly performing strategies. It depends on what Ravi thinks are most relevant to the market.”
He said that the bank also had a good reputation for “being there to stay”. It is one of the five Canadian majors bt spread its wings around the world a long time ago. When BMO GAM acquired F&C, McInerney said, it wanted to reinforce this message and was able to point to the fact that the bank opened its London office in 1871. The bank has also been in China for more than 100 years and is one of the few foreign-owned registered banks there.
“We are 100 per cent committed to Australia and will be gradually building our resources and team,” he said.
The Canadian business, which is still BOM GAM’s largest, is run by the other co-chief executive, Rajiv Silgardo. McInerney’s largest territory is the US.
