Principal shows class with dealer group wins

Principal Global Investors’ aggressive expansion strategy in Australia has boosted its presence on financial planning dealer group approved product lists from 14 to 32 in less than 12 months.

The fixed income and property securities fund manager has had a number of recent wins in this regard, listing its Global Property Fund with Genesys’ proprietary platform Synergy and Tower’s dealer group subsidiary, Beacon.

It also recently won a $17.5 million allocation to the retail investment manager MFS and a $400 million institutional mandate with superannuation fund Australian Reward Investment Alliance.

Giles Gunesekera, Principal’s director, platform and adviser sales, said it is leveraging the recent ratings success of its retail funds in marketing its Global Property Securities Fund, its domestic counterpart the Principal Property Securities Fund and the Global Strategic Income fund to financial planners.

The funds have so far received three stars or equivalent ratings from the major rating houses, excluding Morningstar, which it will be approaching shortly.

“Our focus is to keep capitalising on the good ratings, [and there is] still a large part of the market we haven’t touched yet.

“We want to get on as many platforms as possible. It’s just a question of getting out to dealer groups,” Gunesekera said, also indicating the group is involved in a number of ongoing multi-manager pitches.

He describes the criteria Principal applies before pitching to dealer groups as a “two-pronged approach” based on preferred research houses and the depth of their endorsement of Principal’s product development methodology.

Gunesekera attributes the success of its Principal Global Property fund to the geographic diversity of its assets, having held US-based properties for 10 years, Australian properties for four years and entering the European market at the end of 2006.

He said its fixed income product, the Global Strategic Income Fund, has also enjoyed success and has not suffered from the downturn experienced by other fixed income managers because of its target of 300 basis points above benchmark, which has seen it return around 8 or 9 per cent while others have hovered around 6.5 per cent.