FSI to close four investment teams

First Sentier Investors (FSI) has announced it will close four investment teams.

The firm said it will close its Australian Fixed Income, Global Credit, Equity Income and Emerging Companies teams.

These teams encompass 10 funds combined, affecting $14 billion in assets under management, but FSI said it expects to manage these in line with existing investment objectives for a number of months as it works with mandate clients regarding the transition. 

The funds are:

• CFS Wholesale Indexed Australian Bond (CFSIL)
• First Sentier Australian Bond (CFSIL)
• First Sentier Diversified Fixed Interest 
• First Sentier Global Credit Income (CFSIL)
• First Sentier Global Credit Income (PCT)
• First Sentier Equity Income (CFSIL)
• First Sentier Equity Income (PCT)
• First Sentier Target Return Income (CFSIL)
• First Sentier Developing Companies (CFSIL)
• First Sentier Future Leaders (CFSIL)

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The largest of these are the CFS Wholesale Indexed Australian Bond (CFSIL) fund which is $1.97 billion in assets under management and the First Sentier Global Credit Income Fund (CFSIL) which sits at over $1 billion. 

The PCT funds will be closed but CFSIL are looking for alternate managers for the funds where they are the responsible entity and it is understood this will happen in the next month.

Some 30 investment professionals are affected and “a small number” of these will be redeployed within other roles at the business, FSI said.

The changes are the result of “shifting industry dynamics such as client consolidation, internalisation of investment management and ongoing margin pressures as impacting the outlook for investment businesses”, the firm stated.

David Allen, global head of investment management, said the four teams have been identified as being unable to achieve the growth targeted by the firm.

“Our growth strategy requires us to have a clear focus on capabilities that are most relevant to our clients and where possible, simplify our business.

“We have looked across our business in Australia to ensure each of our investment capabilities has sufficient client demand to be commercially material and sustainable.

“While these teams have delivered strong client outcomes over a long period of time, they have been unable to achieve growth that meets our ambitions.”

Going forward, the firm said it will seek to add additional global and regional capabilities which align with the evolving needs of its clients.

FSI currently has 16 strategies covering Australian equities, infrastructure and real estate and fixed income, and has $238 billion in assets under management.