First Sentier Investors is closing four of its Australia-based investment teams, impacting 30 staff and related to about 6% of AUM, amid shifting industry dynamics and the groups being unable to “achieve growth that meets our ambitions.”
The Australian fixed income, global credit, equity income and emerging companies teams will be shuttered, despite having delivered strong client outcomes over a long period of time, David Allen, global head of investment management, said in a statement on April 23.
Allen cited shifting industry dynamics including client consolidation, the insourcing of investment management and ongoing margin pressures as impacting the outlook for investment firms. The firm continues to review the design and structure of the organization to ensure it is “operating as globally and as efficiently as possible with the right skills and capabilities,” a spokesperson said in an email.
A total of 30 investment staff are expected to leave First Sentier over the remainder of the year, representing about 7% of Australia-based staff. The majority of those impacted are based in Australia but a small number are impacted in the U.K. and the U.S., the spokesperson said. A limited number of alternative roles will be offered where it makes sense, and during the transition period impacted individuals may apply for other internal roles.
“These are difficult decisions but we believe these changes are necessary for us to best meet our evolving client needs and thereby realize our strategy of growth,” the spokesperson added.
The impacted teams account for 5.8% of the firm’s total A$238 billion ($153.8 billion) in assets under management, equivalent to about $9 billion, the spokesperson said. Executives will work closely with clients on the transition of portfolios and plan to retain the firm’s “ability to manage impacted portfolios for a number of months,” the spokesperson added.
Around two-thirds of the asset affected are institutional. The firm’s growth strategy “requires us to have a clear focus on capabilities that are most relevant to our clients and where possible, simplify our business,” Allen added.
The firm will work closely with clients over the coming months to support them for the transition.
“We will continue reviewing opportunities for growth, seeking to add additional global and regional capabilities over time, which are aligned with clients’ evolving needs,” said Mark Steinberg, CEO, in the same statement.
First Sentier Investors runs assets across global and regional equities, cash and regional fixed income, infrastructure, real estate and alternative credit. It is owned by Mitsubishi UFJ Trust and Banking Corp., operating as a standalone money manager with offices in Europe, the Americas and Asia-Pacific.
