AFR – James Frost
Veteran fund manager John Murray is optimistic about the outlook for the boutique funds manager Perennial Value Management after completing a management buyout from IOOF.
The $5.8 billion multiasset investment company was backed by IOOF when it started out as a large cap Australian equity specialist in 2000. On Friday it announced the remaining 42.4 per cent economic interest had been acquired by Perennial’s senior executives.
Founder John Murray said the transaction was a logical step for Perennial and IOOF in challenging times for both the funds management and wealth management sectors.
“With management now owning 100 per cent of the business this simplifies the ownership structure and it means 100 per cent of the owners are focused on growing the business,” Mr Murray said.
The transaction is the second recent sale of a non-core business by IOOF after it offloaded a stake in broker Ord Minnett.
Perennial’s Mr Murray said the company would push ahead with a number of strategies aside from its flagship Value Fund, including its small cap, sustainable future, fixed income, microcap and private to public opportunity strategies.
Australian fund managers has been under pressure for a number of years as fee pressure escalated to the point where many marginal businesses have shut up shop. Mr Murray said the pressure on margins was unlikely to abate.
“It’s become more pronounced in recent years and that’s what led us to diversify.”
Mr Murray also flagged the company’s partnership with global stockpicker Fairlight Asset Management, which focuses on opportunities up to $20 billion. He described this as a “different, but complementary” strategy to those operated by respected managers such as Magellan.