In a move signalling its increased focus on Asia, Aviva Investors has sold its Australian equities business to nabInvest and placed its new regional head in Singapore.
Asia-Pacific chief executive Craig Bingham is to leave the firm after 11 years, and global business development director Erich Gerth will move to the Lion City from London to replace him in September.
Melbourne-based Bingham says he wants to take a step back for the rest of 2011 to reflect on his next move after close to 11 years with the firm. “I made the decision to step down once we chose to sell the Australian business,” he tells AsianInvestor.
It's likely that he'll stay in asset management given his 22 years' industry experience, and he says he would consider moving out of Australia – potentially to Asia, the UK or US – for the right role.
“For the last four-and-a-half years I've been working around the Asia-Pacific region, and I think we've achieved what we aimed for,” adds Bingham. “We now have a joint-venture in China, a manufacturing business in Singapore and distribution agreements in Japan and Taiwan.”
Aviva Investors obtained a Singapore licence this year and has been recruiting aggressively in both investments and sales over the past year since the arrival of Tahnoon Pasha in the city state. The firm looks set to continue that trend under Gerth, who continues to hold his global responsibilities.
The firm's Asia-Pacific AUM has risen fast in the past 18 months to around A$15 billion ($15.5 billion), including A$5.5 billion in Australia and a very big mandate in Singapore. The regional figure will now drop by around a third, but Aviva Investors is focusing on markets with the potential for faster growth than Australia.
“Erich will now take up the [Asia-Pacific CEO] role,” says Bingham, “and I hope we've left the business in a really good position for the regional build-out.”
Once the decision was made to sell the Australian equities business at the end of March, the next stage for Bingham was to move to Singapore or consider other options, and he chose the latter. “I continued to hold the reins during the sale of the business and kept it ticking along,” he adds. “The completion of the sale was the trigger for me to move on.
“I'd started to get a bit run down with all the travel – it was getting close to 200 days a year away from home,” he says. That was “not a sustainable option in the long term”, given that he has a wife and three daughters. “This was an opportunity to recharge and look to do something again in the new year.”
Bingham plans to take the rest of the year out to “do a few things I haven't been able to do for the past 10 or 11 years, then put the feelers out”.
NabInvest, the direct asset management arm of National Australia Bank, is expected to complete its purchase of Aviva's Australian business in the third quarter. Aviva Investors Australia specialises in active management of local equities and listed property.
Aviva Investors will retain its institutional sales and direct property presence in Australia, allowing it to continue to provide Australian superannuation funds with products manufactured elsewhere.
“The transaction is consistent with our strategy to build our Asian business around our hub in Singapore,” a spokesman tells AsianInvestor. “The sale has accelerated the transfer of the Aviva Investors regional head office to Singapore.”
While Aviva Investors’ Asia-Pacific business as a whole may have grown significantly, the Australian business had not achieved sufficient scale to compete effectively in the domestic market, as chief executive Alain Dromer has admitted.
Although Aviva Investors Australia has performed well over a long period, the domestic equity market remains very competitive, placing a premium on scale and breadth of distribution, says the Aviva spokesman.
“At current levels of AUM our Australian equities business is barely a top-30 player in the local asset management market,” he notes. “As such, our business offers greater value to participants with a broader distribution footprint.”
Dromer adds: “Our business in the Asia-Pacific region has grown substantially and with the sale of Aviva Investors Australia agreed, we will focus on further building our Asian business out of Singapore.”
Aviva Investors Australia was set up as Portfolio Partners in 1994 by ex-Country NatWest employees. The firm was acquired by Norwich Union in 1998, which changed its name to Aviva Australia in 2003.
Gerth joined the firm in July 2009 and has 22 years of industry experience. He was previously CEO of US-based Janus International, responsible for Janus Capital’s non-US institutional businesses, including those in Asia. Before that he was national sales director at Goldman Sachs Asset Management.
Bingham has spent over two decades in retail and wholesale funds management, and joined Aviva Investors in February 2001. Before that, he was head of institutional business development at Bankers Trust Funds Management. He has also held positions at Goldman Sachs JBWere and Armstrong Jones Investment Management.