International fund managers are continuing to target the burgeoning Australian market, with a large number of managers believed to be interested in buying Axiom Funds Management and Merrill Lynch (Australia) promising new institutional asset management offerings next year.
Axiom, which is owned by the New South Wales state government and runs a full range of management activities with A$17 billion (U.S. $13.9 billion) under management, is receiving interest from many international managers, including some in joint ventures with local managers.
Richard Darke, managing director of Fidelity Institutional Asset Management, Sydney, said most international managers would have been sniffing around Axiom, before the information memorandum was issued.
He said his group had looked at Axiom but it was most unlikely that Fidelity would be interested; Fidelity traditionally has expanded by growing its own business.
But while the bidding on Axiom is being watched closely, other managers aren't standing still in the search for new assets.
Merrill Lynch, following the Nov. 12 announcement of its A$17 million offer for listed stockbroker group McIntosh Securities, Melbourne, has unveiled plans to enter the institutional funds business in Australia through Merrill Lynch Asset Management, which now includes recently acquired asset manager Hotchkis and Wiley, Los Angeles.
Michael Davis, managing director of Merrill Lynch (Australia) Pty. Ltd., Sydney, said his group would be offering local institutions and superannuation funds a range of new global products, both pooled funds and separate accounts.
Mr. Davis has been briefing asset consultants in Melbourne and Sydney on the new offerings, accompanied by Hotchkis and Wiley's director of marketing, Donald Steinburg.
If the acquisition of McIntosh goes through, the Australian operations will become a much more significant part of the Merrill Lynch group, probably ranking after the United States, Europe and Japan as a regional contributor.
Meanwhile, German-owned Deutsche Morgan Grenfell has indicated it is looking to make a place for itself in Australian funds management after moving to change the name of its subsidiary stockbroking and retail financial products group from Bain & Co., Sydney, to Deutsche Morgan Grenfell.
Meanwhile, Commonwealth Funds Management, Canberra, which manages about A$8 billion (U.S.$6.5 billion), mainly for commonwealth government superannuation funds, is in the final stages of its sale. However, reports suggest the last four tenderers are all Australian groups.
There are still two overseas buyers interested in CFM's asset institutional consulting business - Frank Russell Co. and Towers, Perrin - although a management buy-out is believed to be favored.