The funds management sector has yet to clearly reassert its value in the years since the global financial crisis (GFC), according to Nikko Asset Management Australia managing director Sam Hallinan.
From his perspective as the newly appointed head of the global manager’s Australian operations, Hallinan believes that fund managers have not felt the compulsion coming from investors to be clear about their competitive advantage and what makes them special or unique or even worthy of consideration.
“There is a need for asset managers to regain trust on the question of value following the GFC. With the growing number of assets in the superannuation pool, the asset managers as an industry need to have a stronger role and voice in the trust equation,” he said.
“Trust is born out of many things but for us that includes performance at a fair price and we need to focus upon that relentlessly.
“The equation has always been there but it has become more acute in a time when people felt they were being sold short during the GFC and now when they see the superannuation system playing an important role in the fabric of Australian society.”
Hallinan may be a familiar name to many in the industry, just not with Nikko AM Australia, having spent many years with NAB where he most recently headed Antares Capital Partners before moving to Nikko AM Australia in March of this year.
However he sees his role at Nikko AM Australia as being as much about building trust in assets and funds management as it is about building the business of one of only two global asset management businesses based in Asia.
Nikko AM Australia has had a presence in the Australian market for the past four years after it acquired Tyndall Asset Management in 2011 with Hallinan stating the last 12 months in particular have seen the Australian business become more fully integrated into the global operation.
“We have been working to highlight the unique position we are in and become a more connected subsidiary of one of two asset management groups headquartered in Asia,” he said.
“This integration recognises that globally we are set up around three time zones – Europe, the US and Asia and Australia is in the Asian time zone. This is relevant as we move into the Asian century and is critical for us to be connected into the region and the story.”
Even with this focus, Hallinan said the focus of Nikko AM Australia has not shifted and the repositioning of its brand away from Tyndall has allowed the group to clarify its goals in the local market.
“Our intent is to grow the Australian business and bring offshore capabilities to investors and position Nikko AM as Asia’s premier global asset management firm,” Hallinan said.
“The change from Tyndall – which was a subsidiary business run under a multi-local strategy, has moved to global strategy and the rebranding is part of that. When Tyndall was purchased in 2011 and the brand retained, people were asking ‘what was Nikko’s intention with business’.
“Our objective for past the 12 months and for the next six to 12 months is reaffirming our intention to remain in the local market. However, I think it is a question fairly asked by the Australian market of all global players – ‘what are your intentions and how long term are those intentions?’.”
“We feel it is important we respond and the rebrand and connection into Nikko is part of that response. At its core, asset management is a people and relationship game and our clients and potential clients want to know that relationship has longevity.”
According to Hallinan this means meeting the needs of clients by engaging with them in more meaningful ways than those used in the past.
He said the provision of monthly or quarterly fund reports with stock profiles are no longer sufficient to meet demands of advisers and investors, and as a fund manager recognising what insights are required and the pace at which they are required will shape how it will act and respond.
“The challenge for an organisation like ours is how to unbundle and repackage what is a value proposition built around smart people choosing undervalued assets and that comes down to communication and insight,” he said.
“The track record of our funds is the output of the value we offer but the input is how we buy and sell securities. How we translate that activity in a way that is meaningful for an adviser and their clients is the key issue for us.”
