AM Corporation has dropped Investors Mutual and Maple-Brown Abbott as boutique managers used in its managed the managers style on its $500 million AM Australian Equities Fund.
AM Corporation has dropped Investors Mutual and Maple-Brown Abbott as boutique managers used in its managed the managers style on its $500 million AM Australian Equities Fund.
At the same time AM has acknowledged the performance of boutique managers and increased the size of their overall mandate from 20 to 34 per cent while also adding Ausbil Partners to the remaining four groups.
AM Corp will retain Alpha Investment Management, Contango Asset Management, Jardine Fleming Capital Partners and Wallara Asset Management as the other boutique managers.
Mercantile Mutual Investment Management, Perpetual Investments and Merrill Lynch Mercury Assest Management have also retained their mandates with responsibility for 22 per cent of the fund each.
Lend Lease has also been dropped from the $295 million AM Enhanced Passive Australian Equities Fund after it sold its direct funds management business to State Street Global Advisors.
As a result, the fund now has two managers, Macquarie Investment Management and Barclays Global Investors Australia with allocations of 40 and 60 per cent, respectively.
The decision to revise the list was made as part of what AM calls the “managed investment managers” process. This is based on a mix of fund managers being assessed against mandated benchmarks, according to AM Corp investment manager Deon Joubert.
Joubert says given that criteria Maple-Brown Abbott, who have managed Australian equities for AM for over 5 years and Investors Mutual, who signed on six months ago, were both dropped due to poor performance.
However Joubert says the changes have not deterred AM from expanding the role of the boutique managers even further.
Joubert says there are also plans for the boutique managers pool to be offered as a separate equities fund to selected advisers and investors within the next few months.
The fund would be part of the formation of the Chairman’s Club, a new initiative aimed at planners who had written large volumes of business, according to AM general manager of business development and adviser services, Graham Davison.
Davison says 210 advisers wrote $380 million of business out of last year’s figure of $800 million, with the remainder being written by another 2200 advisers.
“The club will be a form of a loyalty program and as we offer technical and other services to over 7900 advisers, this helps us to drive our business towards those who really support us,” Davison says.
