AI100: Infra investing lifts AUM for Australian fund firms

Assets under management were boosted by investor demand for infrastructure-related investing, AsianInvestor’s latest AI100 survey shows.
AI100: Infra investing lifts AUM for Australian fund firms

Australian asset managers faced a slight slowdown in growth in their Asia-Pacific assets under management in 2017 from a year earlier, although the pace of asset growth was second only to that of Chinese fund houses, according to AsianInvestor’s annual survey of the top asset managers in the region.

Our AI100 list, which tracks Asia-sourced AUM at leading global, Japanese, and other Asia-Pacific fund houses, showed Australian asset managers grew their Asia-sourced AUM by 13.8% in the 12 months to September 2017, modestly down from the 15.7% increase in 2016.

Still, the pace was higher than that of the AI100’s overall AUM growth of 11% over the same period. Only Chinese fund houses managed to achieve a higher growth rate of 15.9%.

All seven Australian fund houses that made it to the AI100 list showed positive growth, according to AI100 data.

AMP Capital Investors was the highest-ranked Australian firm on the list (ranked 22) with $136 billion in AUM, while IFM Investors (48) experienced the highest AUM increase of 36.1% to $60.6 billion.

The other Australian firms in the AI100 are First State Investments (23) with $134.7 billion in AUM, Macquarie Asset Management (35) with $104.8 billion, BT Investment Management (71) with $36.5 billion, Perpetual Asset Management (88) with $24.1 billion, and Platinum Asset Management (96) with $20.8 billion.


A large part of IFM Investors’ growth was driven by flows into infrastructure equity and debt, Joshua Lim, IFM Investors’ deputy chief executive, said.

The biggest investors into infrastructure equity and debt were Korean and Japanese pension funds as well as Korean insurance companies for IFM, Lim told AsianInvestor.

IMF attracted inflows of $3.1 billion into infrastructure equities from Asia-Pacific investors between October 2016 and September 2017, while $272 million went into infrastructure debt over the same time period, according to the asset manager.

Japanese investors accounted for $216 million of the debt inflows, while investors from Korea accounted for $56 million, according to data from IFM.

Investors in both these markets are faced with ultra-low interest rate regimes: policy rates in Japan are still at zero, while South Korea’s base rate sits around 1.5%, noted Lim.

In these jurisdictions, infrastructure debt has definitely been of interest to those investors, he added.

The fund house’s main infra investments are in North and South America, primarily in the energy sector. “There is a fair bit of investment in Europe as well, less so in Asia at this stage,” said Lim.

The fund house is confident that investor demand for infrastructure equity and debt will continue to remain high in 2018.


Executives at other fund houses confirmed the investment trend: “There has been significant investor appetite for our global infrastructure investments, and we expect this to continue in the region, particularly from Asian institutional investors,” Craig Keary, director of Asia-Pacific region at AMP Capital, told AsianInvestor.

The boost from infra funds helped AMP Capital improve its Asia-sourced AUM enough to jump 11 places to 48 in the AI100 rankings.

Apart from infrastructure investing interest, the fund house's Chinese joint venture also helped to boost AUM, said Keary.

“Our growth in Asia has been primarily driven by an increase in cash flows, mostly from our China Life AMP Asset Management (CLAMP) joint venture,” he said.

AMP announced the creation of the CLAMP joint venture with China Life Asset management, a subsidiary of China Life Insurance, in September 2013, to offer listed equities and fixed income investments to Chinese retail and institutional investors.

The Australian fund house holds a 15% stake in the joint venture, and the fund house is confident that CLAMP’s growth momentum will continue.

“We expect AUM growth in our joint venture will continue to increase, driven by positive markets along with strong interest in our real assets and fixed income capabilities,” Keary said.

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