BTIM looks to ramp up fees

BT Investment Management (BTIM) chairman Brian Scullin believes a number of smaller boutique funds management groups are still yet to fail, despite saying his group’s multi-boutique model had been validated during the crisis.

Scullin said the group’s multi-boutique model had been “validated in the toughest of environments”, with “investment teams intact, good long-term investment performance and a strong balance sheet”.

But as a result of the financial crisis there had been a “flight to safety and quality, which will see some of the smaller boutiques fail”.

At the group’s annual general meeting yesterday, Scullin said new products launched by the group this year “all command higher margins for the management of funds and have performance fees attached”.

“We are also managing our capacity more assertively and turning away some mandates where the margins are too low,” Scullin said.

He later said the group intended to “move up the value chain into higher margin products in all areas where we already have the investment capabilities”, with an intention of increasing the performance fees the group’s funds earn.

Scullin said BTIM’s relationship with Westpac remains strong and provides a significant competitive advantage for the group.

Scullin said one of the cornerstones of this relationship is the investment management arrangement that governs the Westpac legacy retail funds — an arrangement which is due to expire on 30 September next year. BTIM is already trying to negotiate an extension of this arrangement, Scullin said.

BTIM will also look to grow through merger and acquisition activity, Scullin said.

The group’s closing funds under management for the 2008-09 financial year was $36 billion.