First Sentier Investors (formerly Colonial First State Global Asset Management) has announced that it is closing four investment teams including Australian Fixed Income, Global Credit, Equity Income and Emerging Companies.
Ten funds will be affected including:
- CFS Wholesale Indexed Australian Bond (CFSIL)
- First Sentier Australian Bond (CFSIL)
- First Sentier Diversified Fixed Interest
- First Sentier Global Credit Income (CFSIL)
- First Sentier Global Credit Income (PCT)
- First Sentier Equity Income (CFSIL)
- First Sentier Equity Income (PCT)
- First Sentier Target Return Income (CFSIL)
- First Sentier Developing Companies (CFSIL)
- First Sentier Future Leaders (CFSIL).
First Sentier will hand back the funds of around $14 billion to investors and will work with mandate clients regarding the transition over the coming months.
The largest of these funds includes the CFS Wholesale Indexed Australian Bond (CFSIL) fund which is $1.97 billion in assets under management and the First Sentier Global Credit Income Fund (CFSIL) which sits at over $1 billion in funds.
The First Sentier Global Credit Income and First Sentier Equity Income funds with Perpetual as the responsible entity will close.
Colonial First State is actively sourcing well-credentialled replacement investment managers.
The new managers will each have a strong track record in the respective asset classes and strong research house ratings.
CFS expects to be able to announce the new managers within a month and anticipates that the portfolio transitions will commence from June 2024 onwards.
Also read: Franklin Templeton Launches Absolute Return Bond Fund
David Allen, First Sentier Investors’ Global Head of Investment Management, said: “Our growth strategy requires us to have a clear focus on capabilities that are most relevant to our clients and where possible, simplify our business.”
Mr Allen cited shifting industry dynamics such as client consolidation, internalisation of investment management and ongoing margin pressures as impacting the outlook for investment businesses.
“We have looked across our business in Australia to ensure each of our investment capabilities has sufficient client demand to be commercially material and sustainable. As a result of this, we have made the difficult decision to close four of our Australian-based investment teams: Australian Fixed Income, Global Credit, Equity Income and Emerging Companies.
“While these teams have delivered strong client outcomes over a long period of time, they have been unable to achieve growth that meets our ambitions.
“We will work closely with our clients over the coming months to support them during this transition,” Mr Allen added.
First Sentier Investors Group manages A$238 billion in assets across global and regional equities, cash and regional fixed income, infrastructure and property, and alternative credit.
Article updated 26 April 2024 to reflect CFSIL actively sourcing replacement investment managers.
