US mutual fund goliaths get ready for battle Down Under
Two of the biggest players in the US mutual funds industry are preparing to launch in to the Australian retail financial services market.
Two of the biggest players in the US mutual funds industry are pre-paring to launch in to the Australian retail financial services mar-ket.
Both Alliance Capital and Principal Financial Group are putting the final touches on plans to expand their businesses in to the Austra-lian market but using two distinct strategies.
Alliance Capital, the biggest listed mutual funds group in the US with US$290 billion under management, is looking to launch a range of US funds to be distributed through external financial advisers.
According to head of retail sales in Australia and New Zealand, Tony Poleondakis, Alliance will introduce some of its most successful funds including the US$10 billion Premier Growth fund, which focuses on the big US growth stocks, and the US$3.5 Technology fund, which has invested in the US technology market for more than 17 years.
Poleondakis, an Alliance senior vice president, has been in Australia for about four months researching the market which he says is attrac-tive due to such factors as compulsory superannuation and "the head of steam being built on the concept of choice".
Alliance is preparing to submit a prospectus to the Australian Secu-rities and Investments Commission (ASIC) which if successful could be launched later this year.
Principal Financial Group is taking a significantly different tack. As one of the most successful exponents of 401(k) superannuation plans in the US, it is talking with a number of Australian financial services groups with a view to an acquisition, merger or joint ven-ture. It is rumoured to be making an offer for BT Funds Management.
Principal's senior global expansion manager Carey Jury has been in the country for the past six weeks sizing up the market and exploring opportunities.
He says the group will look to provide small to medium-sized busi-nesses with superannuation solutions implemented through financial planners.
Jury is soon to be joined in Australia by fellow Principal executive Sue Palmer with a view to have the business up and running by the end of the year.
Principal is one of the biggest players in the US market for small to medium businesses, with 43,000 clients who employ more than three million people. It has more than US$80 million under management.
Jury says Principal rejected a start-up strategy in favour of some sort of alliance in order to establish distribution and operate under a recognised brand.
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