Global investment company T. Rowe Price will boost its presence within the Australian market, focusing on providing global equity investments to retail platforms, independent financial advisers and institutional investors along with superannuation providers.
“Platinum previously had this market cornered, but many are now looking to reduce their reliance on them,” Murray Brewer, T. Rowe Price’s director Australia and New Zealand, said.
Having tentatively established a domestic presence in 2004 with the opening of a modest Sydney office, T. Rowe Price’s approach has been typically measured, or as Brewer explained it: “[as] thorough, alert and patient . . . T. Rowe Price is very methodical.”
Before venturing headlong into the Australian market, which was identified as a key area in 2001, it won its first local institutional client in 2003 and then established a Sydney office with one employee seconded from the United States in 2004.
The door to the greater global market had been closed by a long-running joint venture with Fleming from 1979, which only ended in 2000 when T. Rowe Price bought out the venture and established a dedicated marketing and service company, T. Rowe Price Global Investment Services.
Since then, it has grown the local business to over $1 billion in assets under management, spread across nine clients including three superannuation funds and a growing book of third-party institutional clients and platforms.
According to Brewer, “[it is] currently looking for long-term business relationships” by providing a single global equity product “to get traction among a number of dealer groups and institutions”.
“Once you broaden the product range, the cost of supporting them becomes expensive and you lose your focus,” he said.
In third-party distribution, largely via platform providers, he sees most opportunities within the top 10 dealer groups, particularly among selected boutiques, with a number already on T. Rowe Price’s books.
Within the institutional space, Brewer sees few opportunities outside the top 50 superannuation funds and top 30 fund-of-fund providers.
Speaking about the global equities market, he said: “there’s an incumbency that’s been there for quite some time. [Investors] are all having another look at [their managers] at the moment”.
He believes they now want managers without constraints on alpha-delivery, and that “going forward, volatility in global equities will remain at low levels” as stability has returned to the space over the past five years.
