IFM Investors leverages Growth In Industry Super Sector; Beats $1 bn Valuation

IFM Investors, engaged in offering investment services to institutional investors, was established in 1990. The fund is headquartered in Melbourne, Australia with total number of 430 employees. It can be understood as an investor-owned fund which intends to exhibit long-term performance through quality portfolio with strong focus on risk. The fund believes in the theory of investing on risk-return basis for its institutional investors, which include - pension funds, non-pension investment funds, government entities, sovereign wealth funds, endowments and foundations, universities, insurers, etc. The fund is a signatory of the UN (United Nations) since 2008 and backs the Principles for Responsible Investment.

FY19 Performance:

The company recently reported strong set of results for FY19. The growth was supported by 86% of products and mandates across the served asset classes- infrastructure, debt investments, listed equites and private equities. The fund under management, globally, increased by A$22 billion or 31% to A$140 billion for period ended 30 June 2019, witnessing the strong trust of investors in the fund. For FY19, the fund posted net inflows of $22 billion, out of which. Pre-tax statutory profit for the period came in at $114 million as compared to A$83 million in the previous year.

At the end of 30 June 2019, IFM managed A$57.9 billion in infrastructure assets, A$37.4 billion in listed equities, A$43.3 billion in debt investments, and A$1.8 billion in private equity.

Total institutional investors at the end of the period, stood at 396 with a rise of 27% on previous year. The performance was characterized by top decile, independently assessing investor satisfaction and top quartile, independently assessing staff engagement.

IFM Investors were independently valued at A$1.045 billion, reflecting a rise of 23% per annum over last five years.

With the growth seen in industry super fund sector in Australia, the Management of IFM Investors acknowledged the increase in retirement savings, resulting in 86% of products and mandates exceeding their objectives net of fees over five years. Continued focus on environmental, social and governance issues and recognizing the requirement to report strong long-term returns augur well for IFM Investors to build the social licence and meet the expectations of investors.

On the face of macro-economic challenges, geo-political tension and investment environment, investors demand skill, value and alignment for their investments with central returns thesis of ‘lower for longer’. In that scenario, IFM Investors has emerged as a supporter to extend the business capabilities while creating better assets, stronger communities and a dignified retirement for working people.

About IFM Investors

The group deals with four asset class – (a) Debt Investments, (b) Listed equities, (c) Infrastructure, (d) Private Equity. Total funds under management stood at A$140.4 billion as at 30 June 2019. Of the total FUM (Funds Under Management), Infrastructure accounts for the larger chunk with FUM of A$57.9 billion, followed by debt investments with FUM of $43.3 billion. Listed equities held the total FUM of A$37.4 billion and private equity accounted for the least chunk with FUM of A$1.8 billion.

The group has global offices in Melbourne, New York, London, Sydney, Berlin, Tokyo, Hong Kong, Seoul, Zurich.

Principles of Investments: The fund believes in eight core principles to obtain long term sustainable returns while engaging with ESG (environmental, social and governance) equals discipline. The fund believes in the integrity of the market and diversification in the investment brings in performance. Along with other factors, change in climate also impact the assets. The fund considers the fact that exploitation is not necessary to achieve the profit and there should be a better understanding in terms of assets and measuring outcome which drive the value to the institutional customers.

Infrastructure: The fund has been managing infrastructure investments for more than 20 years, offering two open-ended, pooled funds – (a) Global Infrastructure (b) Australian infrastructure. As far as global infrastructure is concerned, the fund invests in core assets mainly in Europe and North America, and few other regions. With regards to Australian infrastructure, the fund focuses on Australian assets.

Debt Investments: With a track record of 18 years, the fund is a specialist credit, infrastructure debt, core bond and cash manager and manages FUM of A$43.3 billion or US$30.4 billion for long-term, institutional investors. Credit issuers prefer IFM Investors as partner due to its global presence. IFM Investors is different from other funds, being the owner of 27 pension funds, with a disciplined and long-term approach towards debt investments, opportunity and risk identification, expertise in debt services, access to debt issuance through its extensive global networks, strong market profile and preferred partner status, strong track record with proven skills.

Debt Investments Strategies: The Fund aims to identify the credit risk, at the short end, and add value with focuses to carefully manage the liquidity strategies, which differentiate it from a traditional fixed income approach that considers interest rate risk to add value.

Listed Equities: The firm manages the FUM of A$37.4 bn in listed equities for its institutional investors, offering a wide range of products such as active, indexed and smart beta options with global capacity.

Australian core equities are a combination of systematic and fundamental approach that intends to outperform the underlying benchmark. The fund believes in philosophy that listed stocks, mainly larger cap stocks, are more efficient to add consistent value with a systematic approach.

Australian Equities Extended Alpha strategy or 130/30 intends to hold a substantial higher exposure to alpha factors with the combination of systematic and a fundamental approach. These factors use the method of shorting to support the portfolio. The fund believes that the diversification in the basket of short positions decelerates the risk associated with stock and permits the portfolio to benefit from correction in stock prices.

Asia-Pacific Market Neutral strategy is a pure alpha strategy which syndicates the quantitative technique of seeking alpha with fundamental insights to capture returns from value and momentum signals. The strategy considers the risks such as ‘crowded trades’ and ‘value traps’ that traditional quantitative investors generally skip.

Small Caps investment strategy glorify the fundamental research to recognize the right stocks for investment backed by consistent and systematic portfolio construction techniques to achieve additional returns, while maintaining low relative portfolio risk.

Australian Micro Caps strategy is based on the fact that the micro-cap companies in Australia consist of various inefficiencies and recognizing such stocks create additional value for disciplined, professional investors. Being exposed to higher risk, the strategy is to read the fundamentals and come out with right set of stocks in the investment universe.

Private Equity: IFM Investors is an active private equity investor in Australia & offshore since 1998 and has evolved from an investor in private equity funds to a direct investor in companies. PE aims to explore attractive investment opportunities while focusing on due diligence processes by drawing on sector expertise from the global network, and harness directly relevant past investment experience to drive positive investment outcomes.


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