Citigroup passes on retail funds management
Citigroup Asset Managementhas signalled the end of its direct management of retail funds after pulling out of managing the funds of the flagship retail superannuation offering of its sister group,Citicorp.
Citicorp announced today that it would transfer the funds in the managed investment options of its Citicorp Retirement Fund toSMF Funds Managementafter Citigroup Asset Management, which had managed the funds exclusively, opted to rationalise its presence in the retail sector.
The deal will mean all Citicorp managed investment option unit holders will be transferred automatically to SMF’s superannuation offering, the Spectrum Plan, while Citicorp itself will continue to distribute and manage the Citicorp Retirement Fund’s more conservative guaranteed investment options.
A spokesperson for Citigroup Asset Management indicated today the move signalled a new focus for its retail strategy towards the development and distribution of wholesale oriented funds for inclusion on retail master trusts and wrap accounts, and away from the direct management of retail funds.
“When you go directly to the retail sector, you have to have a lot of resources behind you and spend a lot of money. We had a look at what we thought would be successful for us and decided that that was not one of our core competencies,” the spokesperson says.
The deal is expected to help push SMF over the $2 billion mark for funds under management for the first time.
The announcement could also mark the beginning of a much broader relationship between the Citigroup and SMF.
Citigroup Asset Management is itself looking to outsource the funds management function of some of its own managed investment trusts and is believed to have selected United Funds Management, which is part of the same group as SMF, as the probable investment manager.
A spokesperson today confirmed that a formal proposal had been put forward to all unit holders in Citigroup Asset Management’s investment trusts in an attempt to validate the move.
Recommended for you
Six months after scrapping its planned deal with KKR, Perpetual is yet to make significant headway on the sale of its wealth management division but is focusing on alternatives for product development.
Platinum Asset Management’s NPAT has fallen by 89 per cent in FY25, with the firm confirming that it will be renamed as L1 Group following the expected completion of its merger with L1 Capital.
Statutory NPAT at Pacific Current has almost halved in FY25 to $58.2 million as the result of an investment restructure.
Being able to provide certainty about redemptions is worth fund managers pursuing when targeting the retail market even if it means sacrificing returns, according to Federation Asset Management.
