T. Rowe Price says it is committed to Australia despite closing its Australian equities strategy with a focus on global equity funds for the intermediary market.
The US fund manager, which was founded back in 1937 and has $2.3 trillion in assets under management, has had a presence in Australia since 2006, with physical offices in Sydney and Melbourne, and says the country is one of its most important regions in APAC alongside Japan.
Speaking to Money Management, head of distribution for Australia and New Zealand, Darren Hall, said: “For T. Rowe, our focus is on growth in the institutional and intermediary market in Australia and New Zealand. Australia and Japan are our two focus markets in APAC, and we want to make sure we have people on the ground in the right roles to speak to our clients.
“The Australian superannuation market is among the largest in the world, so there is a lot to be excited about.
“We have a big investment expertise in different formats based on clients needs and feedback, and being able to share those insights with our clients is key.”
Hall has worked at T. Rowe since 2007, having previously held distribution roles at Credit Suisse and Schroders, and took on the head of distribution role in 2020.
In the intermediary space, he said it has been “beaten up” in Australia since the Hayne royal commission which has caused the environment to change dramatically and led to a shift in how advisers are accessing funds.
It previously ran an Australian equities fund led by Randal Jenneke but opted to close that earlier this year upon Jenneke’s retirement after 11 years with the manager. Those analysts working on the fund instead now contribute to Australian equities research on the firm’s global funds.
“The intermediary environment has changed dramatically over the five years since the royal commission, there’s been huge disruption and the shift away from the model of vertical integration.
“Consumer preferences have shifted a lot, the move towards managed accounts has been where the money has moved. We have seen interest in our global equities funds and new capabilities such as our Concentrated Global Equity and Global Impact Equity funds, particularly being used in separately managed accounts.”
While some managers such as Schroders and JP Morgan Asset Management (JPMAM) have made changes to their impact and sustainability funds, in light of potentially higher standards for ESG funds in Australia, Hall said all its funds are already ESG-integrated and others can be tailored with an ESG overlay for institutional mandates.
It is also well positioned to benefit from the boom in private credit funds having fortuitously acquired a US private markets firm, Oak Hill Advisors, in 2021, although Hall said he could not have foreseen at the time how popular private markets would become.
“In the US, Oak Hill Advisors has a big institutional presence, and it was a good cultural fit for us to bring private markets to the market and build out the footprint in Australia.”
Finally, the firm is looking to raise awareness of its retirement offering and engaging with superannuation funds on the Retirement Income Covenant.
