Fee revenue drives Treasury Group profit

Treasury Group has posted a 14 per cent lift in profit for 2005-06, largely due to increases in fees paid by fund managers within the group.

Profit increased to $14.4 million ($12.6 million) on revenue of $51.63 million ($44.5 million), driven by a 16.9 per cent increase in funds under management (FUM) to $10.1 billion in the year to June 30.

Managing director David Cooper said the revenue growth “primarily reflected” growth in fee income from increases in FUM within the group.

“We experienced continued growth in fees from fund managers within the group, and our share of profits from associates more than doubled.”

Orion Asset Management saw an increase in funds inflow of 51.8 per cent, while Confluence Asset Management recorded a 32.4 per cent increase.

Investors Mutual FUM declined by 1.8 per cent, although Cooper believes “the tide has turned for value managers, and we’re already seeing increased support from investors”.

He anticipates “continued but escalating interest” from international investors for the group’s fund managers in 2006-07, predominantly from Europe.

“Australian boutique fund managers are only just coming onto the radar for many large northern hemisphere investors seeking diversified earnings.

He also flagged the possible addition of a new fund manager this year, in line with the group’s growth strategy of building a portfolio of ‘best-of-breed’ boutique managers.

“We are currently assessing a number of opportunities with a view to adding a new manager to our stable in the current year.”

This will follow the launch in July this year of boutique fund manager RARE (Risk Adjusted Returns to Equity) in the listed infrastructure and utilities sector.

Treasury Group announced a final dividend of 32 cents a share, bringing the full-year dividend for 2005-06 to 50 cents fully franked, up 25 per cent on last year.