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The managed funds industry had $3,874 billion of funds under management as at 30 September 2019, which is an increase of 2.3 percent or $87.7 billion on the FUM on 30 June 2019 ($3,786.3 billion).
According to the 2017 survey conducted by Investment Company Institute based out of Washington, Australia’s funds management industry is the sixth largest in the world and largest in the Asia-Pacific region.
Investment management companies under radar are: CNI, SUN and IFL
An ASX-listed, Centuria Capital Group (ASX: CNI) is an investment manager with Assets under Management of $7.2 billion. CNI offers a wide range of investment opportunities which includes listed property funds, unlisted property funds and investment bonds (tax-efficient).
Recent announcements made by the company regarding expansion via. acquisitions and issuance of new securities are mentioned below.
Issuance of Placement Securities:
- On 30 January 2020, the Company informed about the successful completion of its newly issued securities which was announced on 29 January 2020.
- Earlier, the size of proposed placement was $ 60 million, covering 25,641,026 securities at issue price of $2.34 per security. However, a day later the size of the placement was increased to $ 80 million covering 34,188,035 securities at the same issue price. The proposed date of issue is 4 February 2020.
- These new securities were added because of the high demand from institutional investors. The company mentioned that it will be using these additional securities as a backup for the continued growth of CNI’s listed and unlisted businesses.
Takeover Offer Bid:
- On 29 January 2020, bid implementation agreement is signed in between Centuria Capital Group and Augusta Capital Limited. The agreement relates to the takeover offer by Centuria to acquire Augusta for $174 million.
- Augusta Capital Limited is New Zealand’s largest real estate funds management platform which is listed.
- If the takeover bid is successful, the AUM of CNI will increase by 26 percent, with currently $7.3 billion to $9.2 billion.
- As an outcome of this bid, shareholders of Augusta will be offered NZ$ 2 per share in either cash or Centuria scrip via a “Mix and Match” approach.
- CNI will fund this transaction from equity, existing cash reserves and $60 million via equity to be issued at $2.34 per CNI security.
Two acquisitions expanded AUM to $ 7.2 billion:
- On 18 December 2019, Centuria announced the confirmation for two of its acquisitions which expanded its platform to $7.2 billion, as mentioned below.
- Centuria Metropolitan REIT (CMA) acquired Nishi Building in Canberra (high quality A-grade commercial office property), and the total value of transaction was $256 million.
- Centuria Industrial REIT (CIP) acquired two high quality industrial assets at 23-41 Galway Avenue, Marleston SA and 46 Robinson Road, East Virginia QLD, and the total value of the transaction was $236 million.
Stock Performance: On 05 February 2020, the stock of CNI closed at $ 2.5, an increase of 2.881 percent compared to the previous closing price.
ASX-listed company, Suncorp Group Limited (ASX: SUN) is a provider of financial services in New Zealand and Australia. The company offers banking, insurance products, wealth management and related services. Suncorp has brands including AAMI, Suncorp, GIO, Shannons, Vero, Apia and from their partners. SUN caters to around nine million customers with $96 billion in assets.
Natural hazard costs for 1H20:
- On 30 January 2020, Suncorp gave an update regarding cost from natural hazard events that happened across the south-eastern states of Australia. Also, SUN provided an expected value of Group’s reserves in 1H20.
- The company expects the natural hazard cost to be $519 million in 1H20, as per the announcement made on 30 January 2020. SUN mentioned three natural hazard events that impacted the company’s reserves, as mentioned below.
- Hailstorms that happened from 19 to 20 January 2020 in the South East states of Australia. The impacted areas were parts of Victoria, NSW and the ACT.
- As at 28 January, the total claims received by Suncorp in relation to the hailstorms were more than 25,000.
- Heavy rain in NSW and South East Queensland from 17 to 18 January 2020.
- As at 28 January, due to the heavy rains the total claims received by the company were more than 1,400.
- Bushfires: The total estimated gross cost of this event was $220-250 million. The cost of $145 million was documented in 1H20 due to this event. Further, $75-105 million cost was recognised in 2H20, as per update on 9 January 2020.
- The company mentioned that it anticipates the group’s reserve release of $50 million - $70 million in 1H20 (HY19: $172m) or around 1.3 percent of Group’s Net Earned Premium.
Important dates:
On 20 December 2019, the company announced few of the important dates, as follows.
- Announcement of date for release of half yearly results and full year results for 2020 which are on 11 February 2020 and 6 August 2020 respectively. This is followed by the date for annual general meeting which is on 24 September 2020.
Stock performance of SUN:
On 5 February 2020, the stock of SUN closed at $ 12.62, an increase of 0.558 percent compared to the previous closing price. The company has outstanding shares of around 1.26 billion and a market capitalisation of nearly $ 15.82 billion. The 52 weeks low and high price of the stock is $ 12.540 and $ 14.155, respectively. The stock has delivered a return of -4.82 percent and -4.26 percent in the last six months and last one year, respectively.
IOOF Holdings Limited (ASX: IFL)
Founded in 1846, IOOF Holdings Limited (ASX: IFL) is a financial provider that helps customers to secure their financial future. The company’s services include financial advice, Portfolio & Estate Administration, and Investment Management products. IFL serves to approximately 500,000 number of customers and employs around 2,000 people. IOOF has offices in Adelaide, Auckland, Brisbane, Hobart, Melbourne, Perth and Sydney.
Acquisition of ANZ P&I:
- On 3 February 2020, IOOF Holdings Ltd announced that the acquisition of Pensions and Investments business (P&I) business of Australia & New Zealand Banking Group Limited (ANZ) was completed on 31 January 2020. The transition of the P&I business to IOOF has commenced from 1 February 2020. The transaction was valued at $0.825 billion.
- Key financial information of the acquired business arm, P&I: As at 31 December 2019, the Funds under Administration of P&I business was $48.2 billion while Funds under Management were $26.8 billion.
- Stock Performance: On 5 February 2020, the stock of IFL closed at $ 27, a decrease of 2.937 percent compared to the previous closing price.
Guidance 1H20:
- The company expects UNPAT to be in the between of $61 million to $63 million (unaudited) for the half year to 31 December 2019. On a continuing operations basis, it is projected to be around $56 million to $58 million (unaudited) for the half year to 31 December 2019.
Enhanced FUMA:
- As at 31 December 2019, Funds under Management, Advice and Administration (FUMA) was $145.7 billion, an increase of $7.2 billion or 5.2 percent compared to 30 June 2019.
- For the quarter to 31 December 2019, the net flow of funds was as follows;
- Financial Advice: $939 million net inflow
- Portfolio & Estate Administration: $360 million net inflow
- Investment Management: $145 million net outflow
Stock Information of IFL:
The company has outstanding shares of around 351.08 million and a market capitalisation of nearly 2.63 billion as on 5 February 2020. The 52-week low and high price of the stock is $ 4.556 and $ 8.450, respectively. The stock has delivered a return of 39.07 percent and 55.31 percent in the last six months and last one year, respectively.
