Abrdn managing director, Brett Jollie, has detailed the firm’s future plans in Australia.
This week, the firm appointed MSC Trustees to assume responsible entity and trusteeship across its 10 registered funds from 1 July 2023.
Abrdn said this appointment will allow the firm to “drive efficient, client-led, sustainable growth while maintaining a world class offering and delivering the best outcomes for Australian investors”.
This is the second major outsourcing move by the fund manager this year after it signed a distribution agreement with Australian fund manager SG Hiscock (SGH), which saw the latter take over abrdn’s Australian equities business as well as distribute its international funds in Australia.
Three investment professionals from abrdn’s Australian equity team joined SGH to form an eight-person investment team, although abrdn’s head of Australian equities, Michelle Lopez, departed after 18 years with the firm.
However, Jollie told Money Management the firm remains committed to Australia.
“Our strategy [in Australia] hasn’t changed, it’s just how we execute it … A lot of people think we are leaving the market but we absolutely are not, we are absolutely committed to the market but we are doing it in a more streamlined way through partnerships to future-proof the business and drive more profitable growth.
“As instos seek lower fees and there’s a drive towards passive, all of that is impacting our revenue and costs continue to rise so you have this profit squeeze. We’re looking forward 5-10 years and how do we remain relevant and ensure we have profitable growth into the future?”
He said the firm still has institutional staff, investment managers, multi-asset investment managers, product managers and consultant relations on the ground in Australia.
Breaking down the individual changes, he said there had been three main decisions; to exit Australian equities, to appoint SGH for fund distribution, and to change responsible entities.
Custody and administration of abrdn’s international funds was managed by Citibank while the two SGH Australian Equity funds were managed by Apex Group.
“We partnered with SG Hiscock, provided them with additional scale to go out and sell our products but they are still our funds and still branded abrdn and managed by abrdn, the only difference is the sales guy who turns up to the adviser is ‘SGH on behalf of abrdn’.
“We decided to exit Australian equities, we stand out by bringing offshore products to this market whereas Australian equities is super competitive, it’s the first asset class that’s being insourced by super funds, margins are going down and we aren’t high profile so we decided to focus on our strengths and have sold that to SGH.”
The abrdn Ex-20 Australian Equities fund has been renamed the SGH Ex-20 Australian Equities fund, while the abrdn Australian Small Companies fund is now renamed as SGH Australian Small Companies fund.
The Small Companies fund is now managed by abrdn investment manager Shawn Lee, while the Ex-20 Australian Equities fund is managed by SG Hiscock portfolio manager Hamish Tadgell.
There have been no changes to the investment objective or strategy of the funds or any fee changes.
I continue to see reference to Michelle Lopez’s departure being a part of the abrdn/SG Hiscock partnership. Please note she resigned WELL BEFORE this partnership was formed.