Australia’s superannuation funds have nearly the highest proportion of internal asset management in the world, but there’s plenty of questions hanging over the practice even as funds push into more expensive niche asset classes.
The retirement chief of the $335 billion AustralianSuper, who was “instrumental” in delivering a slew of member experience uplifts across a 17-year stint with the fund, will leave this month to establish a new venture.
Unshackled: JANA staff take full control
JANA CEO Georgina Dudley (picture at top) said the buyout signaled “continued growth” for the asset consultant, which manages more than $1.3 trillion in funds under advice. JANA had been negotiating the latest and most important deal in the organisation’s storied history with 45 per cent owner Insignia (formerly IOOF) for at least six months.
JANA acquired a majority share of the business from MLC Wealth in 2017, which retained a 45 per cent share, and which was subsequently bought by Insignia. Since the initial management buyout, JANA has achieved a turnover of staff “well below industry averages”.
“Over the past five years, we have seen the benefits of management ownership and how it has further aligned our focus with clients, whilst allowing us to deliver exceptional investment results and significantly grow our funds under advice,” Dudley said.
“Full management ownership enables us to continue to build on that success and seize even more opportunities for our clients. This is a significant next step in JANA’s evolution, enhancing both autonomy and alignment, and linking staff directly to the success of the business and our clients.
JANA will continue to provide investment consulting services to Insignia, while Insignia chief asset management officer Garry Mulcahy and other Insignia representatives will step down from JANA’s board. Further non-executive directors will be announced through a structured succession in 2023.
“Moving to full equity ownership will continue to improve JANA’s ability to attract, retain and develop its people,” Dudley said. “JANA is committed to investing in further growth and expanding its offerings, as well as adopting new technology and sophisticated data analysis to meet the growing needs of the business and its clients, including those in the not-for-profit, insurance and wealth partnerships sectors.”
When the founder of John A. Nolan & Associates, John Nolan, then 51, announced the sale of what was then the third-largest asset consulting firm operating in Australasia, in December 2000, behind Mercer and Russell Investments. Now, it nudges out industry fund-owned Frontier for the number one spot (However, there is increasingly double counting of clients due to the multiple use of consultants by the largest super funds).
The late Barrie Dunstan wrote at the time that Nolan, had said “the new relationship with the NAB was the best way for JANA to meet the changing demands of the market while retaining high levels of individual service”. John Nolan would retain his executive chairman and director of research roles and Ken Marshman his managing director role under NAB ownership. It kept its own board but with two NAB or MLC appointees, while MLC was responsible for JANA within the bank’s hierarchy.
Unlike Mercer and Russell, Nolan had pursued funds management ambitions through the formation of a separately owned company, Warakirri Asset Management, in 1993. It later provided what was then called implemented consulting – now known as outsourced CIO – for some smaller clients.
Several years after the first sale, Nolan said that he was proud of the fact that both JANA and Warakirri had continued to grow. As far as staff and clients are concerned, NAB turned out to be a good owner of the business.
The first step towards regaining full independence was taken by MLC when it negotiated to sell the 55 per cent of JANA they currently own to 25 management and staff in 2017. Jim Lamborn, JANA’s then chief executive, spearheaded negotiations with Garry Mulcahy, NAB Asset Management’s executive general manager. Lamborn said that deal was aimed to put the consulting firm in the best position to attract and retain talent.
With his former colleague from the Victorian Government’s State Electricity Commission, John Coombe, Nolan launched the business a few days after the stock market crash in October 1987. Coombe is still a senior asset consultant and shareholder based in Sydney. In recent years, he has tended to be the guardian of its culture and independence of thought, if not share registry.
With reporting from Greg Bright.
