Posted inBusiness moves

Natixis pushes into Aussie market with IML purchase

Natixis Global Asset Management will acquire a majority stake in Australia’s Investors Mutual Limited (IML), which will enable the firm to take advantage of the domestic retail market and the $1.78trn superannuation industry.

Natixis will acquire a 51.9% stake in the Australian firm, according to a joint statement. The acquisition is expected to close this month.

It will be Natixis’ first major acquisition in Australia, which will enable it to increase its exposure to the local retail and superannuation industry, the statement said, noting that the firm  already established an office in Sydney in 2015.

IML, which manages around A$9.1bn ($7.11bn) in assets, is an Australian equities value manager that was established in 1998. After the acquisition, IML’s management team will remain shareholders in the business and Anton Tagliaferro, IML investment director, will continue to run the business.

Under Natixis’ multi-affiliate strategy, IML will retain its autonomy, investment philosophy and culture, according to the statement.

Superfunds look offshore

Australia’s superannuation (pension) funds intend to increase exposure outside of the country, according to a report from Boston-based research firm Cerulli Associates.

“International managers in particular stand to gain from the inevitable increase in allocation overseas,” the report said.

“Managers seeking mandates must understand the distinctive dynamics around different areas of the super industry, including the important role that investment consultants play as gatekeepers, and must stay abreast of constantly tweaked regulations,” the report said.

The sector, which has assets of around A$2.32trn ($1.78trn), is growing relentlessly as domestic laws require employers to put an equivalent of 9.5% of every employee’s salary into a superannuation plan.

Given the size of the sector, super funds must necessarily invest more overseas, partly because Australia does not offer all asset classes, according to the report. For example, its stock market is limited in terms of technology and automotive, and its domestic capital markets do not include a well-developed high-yield space.

A significant portion of superannuation funds is invested in overseas equities.

For example, MySuper funds, which are low-cost and simple products for employers to choose as their default super fund, have 27% of their assets in international equities. That compares to the 21% that are invested in domestic equities, according to data from The Association of Superannuation Funds of Australia (ASFA). In total, MySuper funds had around A$595bn in assets as of the end of June.

In addition, superannuation funds regulated by the Australian Prudential Regulation Authority (APRA), have 23% of their A$1.5trn in assets invested in internationally-listed equities, which is the same for domestic equities, according to ASFA.

However, the case is not the same for investments in overeas fixed income. Around 7% of MySuper funds assets are in international fixed income, which is lower than 13% in Australian fixed income. The case is similar with APRA regulated funds, which have 8% in overseas markets and 13% in the domestic market.

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