Which funds benefit from IOOF’s acquisition?

There are four funds set to benefit from the completion of the acquisition of MLC Wealth by IOOF from National Australia Bank (NAB). 

Yesterday, NAB completed its sale of MLC Wealth to IOOF, doubling the size of IOOF’s business to $494 billion in funds under management and an additional 406 MLC advisers would join the firm. The deal had first been confirmed  at the end of August 2020.  

After a dip at the start of the year following the announcement that it had lost $400 million in funds under management, advice and administration, shares in IOOF had risen 15% since the start of the year to 28 May, 2021. This compared to returns of 10.6% by the ASX 200.  

However, IOOF had struggled over the long term with losses of 43% over three years to 28 May, 2021. 

Share price performance of IOOF versus ASX 200 since start of the year to 28 May 2021 

According to FE Analytics, IOOF was held by Lazard Defensive Australian Equity, OC Premium Small Companies, VanEck Small Cap Dividend Payers ETF and Nikko Australian Share Income fund. 

These funds each had around 2% to 3% weighting to the company. 

Malcolm Whitten, Tyndall AM portfolio manager, which manages the Nikko fund following an acquisition by Yarra Capital Management, said: “IOOF has been on a journey of its own right, it has boldly advanced on MLC Wealth and it did a capital raising. It has a tremendous opportunity and has less problems than other players in the space”.