Tower concentrates on core business
Tower Australiahas announced the closure of its annuity portfolio to new monies with the aim of sharpening its focus on core business, and has also appointed AMP Henderson Global Investors to manage its Australian ethical funds.
Tower Australia chief executive Jim Minto says that while the group has built a significant, full capitalised annuity portfolio, valued at $210 million, and recognises the important role of this type of product, its manufacturing requirements differ from their core business lines.
“In terms of manufacturing, we think annuities are a poor use of capital with insufficient returns, and they destroy shareholder returns, but at this stage we’re happy to hold the portfolio,” Minto says.
“With our refocus, the manufacturing of annuities now lies outside our scope but we may consider in time distributing other companies’ annuity products.”
Tower recently moved to a multi-manager strategy for its Australian equities portfolio, and the appointment ofAMP Hendersonto manage its $45 million Australian ethical funds is a continuation of this ‘best of breed’ management approach.
On the advice ofMercer Investment Consulting, Tower selected AMP Henderson because of its solid investment approach, commitment to the socially responsible investing (SRI) sector, and its highly experienced teams in Australia and the UK.
Minto says that these two decisions were further steps taken in the complete refocus of the business.
“Tower Australia’s objective is to consistently deliver on our commitments by doing fewer things and doing them better within our core businesses of life insurance and related investments,” Minto says.
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