Hein Vogel

Fund managers are looking at alternative options to achieve scale in what is becoming an increasingly competitive market.

The merging of fund managers to boost funds under management, such as the recent Access Capital and Challenger deal to form boutique infrastructure manager Whitehelm Capital, is likely to be an increasing industry trend according to Investec Bank (Australia) Limited (Investec).

Whilst international companies continue to look for opportunities to enter the Australian market, domestic players are starting to pro-actively seek out scale opportunities – either by partnering with an “aggregator” or an industry peer.  In addition to advising on the Access Capital transaction, Investec has also been working with an Australian hedge fund to review its strategic options.

Hein Vogel, Executive Director, Corporate Advisory at Investec said following a spate of transactions in the wealth management space, fund managers are now feeling the margin pressure as part of the wealth management value chain and are actively looking at their options.

“The funds management space is moving at a rapid rate and continues to grow off the back of the legislated superannuation system. However, as the industry matures, managers are under increasing pressure to reduce fees to win large mandates, which requires a greater level of funds under management to make sure that the business is sustainable,” Mr Vogel said.

There has also been interest from overseas players looking for opportunities to buy firms as a means of expanding into this market.

“The proliferation of multi-boutique models also means a steady stream of buyers are looking for the right businesses to provide seed capital and support services to.  In the short term, alternative asset classes like infrastructure and fixed income area receiving the most attention.

“Financial services including wealth and asset management is a core area of focus for Investec and we are excited to see activity in the sector including the completion of the merger which has resulted in Whitehelm Capital,” he said.

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JohannesburgSA

Investec Property Australia, a division of Investec Bank (Australia) Limited, is pleased to announce its intention to list Investec Australia Property Fund (“IAPF”) on the Johannesburg Stock Exchange (“JSE”).

The Fund, which is expected to list on 24 October 2013, will be listed under the Real Estate Holdings and Development sector.

Sam Leon, Non-Executive Director of IAPF, said: “Investec Australia Property Fund is a unique investment opportunity, offering South African investors direct exposure to the Australian property market and currency. The objective of the Fund is to invest in high quality, sustainable and well diversified real estate in Australia. The Fund at the outset is a solid, sustainable platform that is well positioned for growth.”

IAPF is an Australian domiciled real estate investment trust (“REIT”) with a property portfolio which consists of a diverse mix of industrial and commercial assets (eight in total) located across Australia. The properties are well located in major metropolitan cities or established commercial precincts in Australia and have long-term leases and quality tenants in place.  Furthermore, the Fund will be managed by an experienced and entrepreneurial management team on the ground in Australia.  The team’s solid track record coupled with its ability to leverage off the Investec platform provides the Fund with scope for significant growth in the future.

Graeme Katz, CEO of Investec Australia Property Fund, said: “The Australian property market has attractive opportunities and with a long term view, we are confident in the Fund’s ability toenhance value and deliver sustainable returns and long term capital growth for prospective unitholders.”

The Fund’s board comprises of an extremely experienced team, with a mix of South African and Australian members.

Further information is available in IAPF’s pre-listing statement.

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