Clime IM looks to US for revenue boost
Clime Investment Management has been appointed by a US investment firm to manage a portion of its multi-asset fund.
In an ASX statement, the firm said it has been selected by Sphinx Investments to manage a forecast US$117 million ($183 million) of its USA Public Offer Fund, subject to regulatory approval.
Sphinx also expects to allocate between 15 per cent and 20 per cent of its investors to the vehicle managed by Clime on an ongoing basis.
As well as this, Clime has established a specialist wholesale/sophisticated equivalent offering for Sphinx clients which has US$4.7 million in committed capital and US$30 million in pre-commitments.
The deal is subject to regulatory approval but if successful, the initial retail offering is expected to grow Clime revenues by approximately $1.75 million in the next 12 months. Wholesale investment offers are expected to grow revenues by $350,000.
“The agreed investment strategy mandates Clime to manage a series of investments in Australian real property, unlisted and listed Australian credit, unlisted private equity and Australian listed companies,” the statement said.
“Sphinx has dealt with several challenges identifying a capable, ‘right sized’ partner in the Australian market and the board of CIW are pleased to have rapidly assembled a legal, governance and execution for personal use only team to address the objectives of Sphinx.”
Financial services firm Sphinx Investments offers financial planning, estate and retirement planning, and insurance planning.
To comply with US regulatory requirements, Clime has established a series of exempted limited partnerships which are not open to Australian investors, although managing director Michael Baragwanath stressed there are similar existing domestic vehicles available run by Clime.
As well as the deal with Sphinx, it has also entered into a heads of agreement with US equities manager Acruence Capital to strengthen the research capability of both firms and collaborate on opportunities in the US.
“The agreement with Acruence is expected to increase investment capability and resourcing for our international investment team without a material change to revenue or expenditure at this stage. specifically.”
Speaking to Money Management, Baragwanath said: “I’ve done a lot of cross-border investment and working with people in different countries, and I love telling people why Australia is the greatest place in the world to invest.
“The main thing for me is these deals are fairly lucrative mandates that bring in revenue and I can re-invest that into better services in Australia. We want to build out our wholesale capabilities here and our property and unlisted debt. There’s a lot of problems in those sectors, and I think there’s lots we can fix there.”
In a recent quarterly update, the firm shared how total funds under management and advice (FUMA) increased by 3 per cent over the three months to 31 March.
This was helped by a $137 million fund mandate obtained during the quarter, partially offset by the loss of a $38 million separately managed account (SMA) mandate, pension payments, and adverse market movement.
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Laura Dew
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