Having divested its financial advice business to Fortnum Private Wealth, Australian Unity has shared further details on how it is transforming the business to focus on investment bonds.
In an annual report, Australian Unity said gross funds under management, administration and advice (FUMAA) stand at $15.2 billion as of 30 June, down from $18.7 billion a year ago. Segment revenue increased from $232.5 million to $250.4 million over the period.
This decrease in FUMAA was the result of an “ongoing platform strategy”, the firm said, to focus its wealth and capital markets division on investment in social infrastructure and investment bonds.
“The total gross value of funds under management, administration and advice decrease is consistent with the ongoing platform strategy to exit fixed interest and commercial property and focus on increased investment into social infrastructure and investment bonds.”
A spokesperson told Money Management: “Having undergone a significant transformation and simplification process over the last three years, the platform is moving forward with clarity, providing investments and services that deliver attractive returns alongside measurable and valuable community and social value.”
In 2023, Nestworth Financial Strategists, a corporate authorised representative of Fortnum’s Australian Financial Services Licence (AFSL), acquired Australian Unity’s advice business including its 18 advisers in late 2023. Australian Unity’s AFSL holder, Australian Unity Personal Financial Services, was also purchased by Fortnum.
This was one of several divestments or exits made by the business in recent years as it also sold Altius Asset Management to Australian Ethical for $5.5 million and moved away from being the responsible entity of the Property Income Fund over to property fund manager Newmark Capital.
It also stepped away from the position of responsible entity for Talaria Asset Management funds which moved to Equity Trustees.
On the flipside, it said these exits were offset by new mandates and flows into its investment bonds business and into Australian equity manager Platypus Asset Management, which Australian Unity took full ownership of in 2022.
As a result of the various divestment, the wealth and capital markets portfolio now includes contributory mortgage fund Select Income Fund, trustee services, equity boutique Platypus Asset Management and a $7 billion social infrastructure portfolio including the $3.4 billion Healthcare Property Trust, among others.
Looking at its investment bonds capabilities, where it is one of Australia’s largest providers, this business was boosted by integration of IOOF which was acquired from Insignia Financial for $40 million and brought over more than $3.5 billion in investment bonds funds under management, including its WealthBuilder product. At the time, Australian Unity said the acquisition positioned the group as a “leader in the investment bond sector” and represented a shift in investor sentiment towards saving.
For example, FUMAA in investment bonds rose from $3.6 million to $3.9 billion, while those in investment funds decreased from $10.4 billion a year ago to $6.6 billion.
It also announced Esther Kerr, chief executive of wealth and capital markets, stepped down at the end of August and is being replaced by Adam Vise in an acting capacity.
