Australian Ethical has seen its funds under management (FUM) surpass $13 billion in the latest quarter, thanks to retail and wholesale net flows of $173 million.
In a quarterly update for the three months to 31 December, the fund manager said FUM had risen from $12.95 billion in September to $13.26 billion by the end of the quarter.
Retail and wholesale net flows balanced out slower flows from its superannuation business which was impacted by a Mercer transition.
During the quarter, there was a seven-week limited service period as the result of a Mercer superannuation administration services transition over to GROW Inc. While flows were $101 million for the quarter, Australian Ethical said it expected the completion of the transition would mean superannuation flows stabilised in the second half of the financial year.
Investments net flows (ex institutional) were $72 million with positive inflows from the values-aligned channel where sales efforts have increased, and a solid pipeline has been built. This channel focuses on not-for-profit organisations, including charities and foundations, as well as values-aligned businesses looking to invest their funds with an aligned fund manager.
Positive investment performance added $190 million for the quarter.
Managing director, John McMurdo, said: “A mark of the strength of our business model and resilience is that even in a period where we were not able to promote and generate new superannuation business at our normal rate (given the administrator change and disruption), our other channels continued to provide meaningful uplift.
“We completed the successful transition of our custody services to State Street on 1 November 2024, and completed the transition of our Mercer superannuation administration services to GROW in late October 2024. Together these transformational programs will deliver the strengthened business platform, improved efficiencies and unit cost savings that will underpin our continued growth, and further future profit and operating leverage improvement in the medium term.”
Last year, the firm told Money Management that the advised channel accounted for more than $1.8 billion of its total FUM and that it was focused on maintaining its lead and recognition with advisers as a responsible investment manager.
Leah Willis, head of distribution at Australian Ethical, said: “We’ve increased the breadth of our investment capability significantly over the last 18 months – we’ve moved from 18 to 36 investment professionals. We now have expertise across private markets, infrastructure debt and also with the more recent Altius acquisition. So we have a full green and sustainable bond offering.
“That really shows that there’s building blocks available for advisers to be able to either build dedicated responsible investing options or blend these into their mainstream models that they might already be using and really access that forward sustainable thematic across different asset classes.”
