Funds Management Newsletter Q1 2024

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Welcoming you to our Funds newsletter, where we delve into the recent trends and developments within the Australian funds management industry. In this edition, we explore the state of the industry, significant mergers and acquisitions, and the evolving landscape shaping the future of investment management in Australia.

 

State of the Industry

 

The Australian funds management industry continues to demonstrate resilience and adaptability amidst ongoing economic uncertainties and market volatilities. With a robust regulatory framework and a strong focus on investor protection, Australia remains an attractive destination for both domestic and international investors seeking diversified opportunities.

 

Despite challenges posed a few years ago by the global pandemic and recent geopolitical tensions, the industry has shown remarkable growth in assets under management (AUM) over the past few years. The increasing demand for sustainable and socially responsible investment options has also reshaped the investment landscape, with funds incorporating environmental, social, and governance (ESG) principles into their strategies as well as delving into new benefits provided by investment data system providers such GoldenSource, Finbourne, Rimes (Matrix), S&P Global (IHS/MarkitEDM), Fencore, NeoXam and BNY Mellon (EaglePACE).

                   

 

Industry Mergers and Acquisitions

 

Dexus acquired AMP Capital’s real estate and domestic infrastructure equity business (AMP Capital) in March 2023. The combined business creates a leading real assets investment manager in Australia with more than $60 billion of funds under management.

 

           

AMP and Ares Management Corporation: A subsidiary of Ares Management Corp. completed its acquisition of Sydney-based AMP Ltd.’s infrastructure debt platform in early 2022. The transaction added about $8 billion in assets under management to Ares, bringing its total AUM across its debt and equity platforms to over $12 billion.

 

         

Magellan Financial Group, Barrenjoey Capital and FinClear: Magellan Financial Group acquired a 35 percent stake in Barrenjoey Capital Partners, signalling its foray into investment banking and capital markets. This strategic alliance has enhanced Magellan’s diversification strategy and strengthens its position as a diversified financial services provider, catering to the evolving needs of its clients across the investment spectrum. Magellan also acquired a 15 percent stake in FinClear, an Australian leading independent technology and infrastructure provider for financial markets both listed and private.

 

   

Perpetual and Pendal: Perpetual completed a $2.5 billion acquisition of Pendal in January 2023 bringing Perpetual’s total assets under management to roughly $200 billion strengthening its position in the Australian investment industry.

 

Other completed mergers in the Funds industry

 

  • Australian Ethical and Christian Super
  • Australian Super and Club Plus and LUCRF
  • Cbus and Media Super and EISS Super
  • Centric Super and Encircle Super merged
  • Equip and Catholic Super and BOC Super
  • First State Super and Vicsuper and WA Super and VISSF (rebranded as Aware Super)
  • HESTA and Mercy Super
  • Hostplus and Intrust and Statewide
  • LGIAsuper and Energy Super and Suncorp Super (rebranded as Brighter Super)
  • Sunsuper and QSuper and Incitec Pivot Employees Superannuation Fund (IPES) and Australia Post Superannuation Scheme (APSS) (rebranded as Australian Retirement Trust)
  • Tasplan and MTAA (rebranded as Spirit Super)
  • UniSuper and Australian Catholic Super

 

Mergers under discussion or in progress

 

  • Active Super and Vision Super
  • Alcoa Super and Australian Retirement Trust
  • AvSuper and Australian Retirement Trust
  • Care Super and Spirit Super
  • Commonwealth Bank Group Super and Australian Retirement Trust
  • Hostplus and Maritime Super
  • Mercer Super and BT Super and Lutheran Super and Holden Employees Super Fund (HESF)
  • Oracle Super Fund and Australian Retirement Trust
  • TWUSuper and Mine Super

 

 

 

These mergers and acquisitions underscore the industry’s dynamic nature and the imperative for firms to adapt and innovate in response to changing market dynamics and investor preferences. Consolidation trends are expected to continue as firms seek scale, diversification, and strategic partnerships to navigate the evolving landscape and drive long-term growth.

 

Future Outlook

 

Looking ahead, the Australian funds management industry is poised for continued growth and innovation, fuelled by technological advancements, regulatory reforms, and shifting investor preferences. Firms will need to remain agile and responsive to emerging trends, including the rise of digital assets, the integration of AI and machine learning in investment processes, and the increasing focus on sustainability and responsible investing.

 

As the industry evolves, collaboration and partnerships will be key drivers of success, enabling firms to harness collective expertise, leverage complementary capabilities, and deliver value-added solutions to investors. With a commitment to excellence, integrity, and client-centricity, the Australian funds management industry is well-positioned to navigate the challenges and seize opportunities in an ever-changing global landscape.

 

Thank you for joining us in this edition of our newsletter. We look forward to bringing you more insights and updates on the dynamic world of funds management in the months to come.

 

Hope you have enjoyed this newsletter and for further information, please feel free to reach out to us

 

How to successfully integrate two Investment firms

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Due to the high volatility and shere number of funds and investment management businesses looking to acquire, sell or merge, we thought it would be a good idea to write an article to highlight some key take aways to consider when acquiring and integrating two investment firms.

 

When it comes to integrating two investment firms from a technology and systems stand point, there are several factors to consider. Here are some of the best practices for technical integration:

 

  1. Conduct a comprehensive technology audit

The first step in technical integration is to conduct a comprehensive audit of both firms’ technology systems. This will help identify any redundancies, compatibility issues, and areas that need improvement. The audit should cover hardware, software, networks, and data centers. This is a good time to highlight each companies unique platforms which comprise of:

  • Order management system (OMS) and trading platforms
  • Investment management and risk analytics systems
  • Enterprise Data Management and performance
  • CRM platforms (usually Salesforce in buyside clients)
  • Data visualization and business intelligence (usually PowerBI, Tableau or Alteryx).
  • Any financial advice platforms
  • Who do they outsource fund administration to and also does this cover custody, fund accounting and transfer agency services?

  1. Choose a platform for data consolidation

After the technology audit, the next step is to choose a platform for data consolidation. This platform should be able to accommodate data from both firms, as well as any future acquisitions. It should also be secure, scalable, and able to integrate with other systems.

 

  1. Establish a project team

To ensure a successful technical integration, it’s essential to establish a project team. This team should consist of representatives from both firms and should include IT professionals, project managers, and other key stakeholders. The team should be responsible for overseeing the integration process, including setting timelines, managing budgets, and communicating progress to stakeholders.

 

  1. Prioritize integration efforts

Given the complexity of integrating two investment firms, it’s important to prioritize integration efforts. The project team should focus on critical systems first, such as trading platforms, order management systems, and risk management systems. Once these systems are integrated, the team can move on to less critical systems.

 

  1. Communicate regularly

Effective communication is essential for successful technical integration. The project team should communicate regularly with stakeholders, including employees, clients, and vendors. This will help ensure that everyone is aware of the integration process, any changes that will affect them, and when they can expect the integration to be completed.

 

  1. Test and validate systems

Before going live, all integrated systems should be thoroughly tested and validated. This will help ensure that the systems are working as intended and that there are no critical issues. Testing should include end-to-end testing, user acceptance testing, and performance testing.

 

In conclusion

Integrating two investment firms technically can be a complex process. By conducting a comprehensive technology audit, choosing a platform for data consolidation, establishing a project team, prioritizing integration efforts, communicating regularly, and testing and validating systems, the integration process can be successful. It’s important to have a clear plan in place, communicate effectively, and be prepared to make adjustments along the way.

3 strategies Investment and Funds Management firms should adopt in 2020:

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As an Australian Investment or Funds Management firm, you will know that the market is tough, competition is rife and commissions are getting squeezed. So how do you differentiate yourselves against your competition?

As one of the leading Fintech recruitment firms in Australia, we have seen what our clients have and have not been doing, relative to their competitors. So let us break down the 3 strategies we think you should adopt for 2020.

1.Technologies

What Technologies are you currently using and are they fit for purpose in this vastly changing technology landscape? What Systems and tech stacks are you looking at? What is the market demand and supply for such skills and technologies and also what are the costs for on-prem vs SaaS or DaaS solutions for investment managers?

We are seeing a huge demand for Data Analytics professionals with Tableau, PowerBI or Alteryx to get raw data and provide insights across various demographics and market shifts.

Market demand is vastly growing for Machine Learning/AI and Data Science tools across the investment management industry. These skills are brought in-house to help portfolio managers and traders make better and more educated decisions through the use of text mining and social media scraping to validate and substantiate findings and insights.

There is also an increased demand within our buy-side clients for Data and Quant Programmers/Analyst Programmers who are experienced with R, Python and Matlab but who also have an accounting or an applied finance degree.

In terms of systems, are you still running Excel/VBA Spreadsheets? There are many diverse platforms on the market which can help you scale through the use of investment systems. These could be Charles River, Blackrock Aladdin, MarkitEDM / Cadis, Thinkfolio, SimCorp Dimension and are you utilising it for Front, Middle or Back Office functionality or all 3? Some of these systems can be quite costly and selecting the best one for your company, 5-10yrs from now rather than at this present time, is vastly important and I’ll summarise why;

In the financial services sector, Australia has slowly moved away from heavy sell-side activity and there is less happening locally with investment banks compared to 10 years ago. I remember being inundated with technology jobs for major global banks such as Credit Suisse, Deutsche Bank and Merrill Lynch, but less so since 2012.

If anything, many of the large global investment banks are streamlining their Australian operations and moving them to regional hubs such as Singapore or Hong Kong or back to head office in Europe or the States. Australia is increasingly becoming more tailored towards our traditional buy-side safe havens being Superannuation, Wealth, Annuities, Funds, Investments and Custodian businesses.

This brings about an increase in large technology transformations, M&A and divestment activity which we are working on for our clients and which will continue. Thus, to be positioned well for such programs for your potential clients, ensure you have systems fit for purpose long term.

2.You need to adopt a core SAR Strategy

I’m not talking about your Stop and Reverse Trading strategies, actually something vastly different. I am referring to:

Selection – what are all the Omnichannels available for you to engage with possible candidates to join your organisation? How have you selected your go-to-market strategy for this? Which recruitment firms are you partnering with? What channels are you missing out on?
Attraction – Do you have a reputable brand in the market? Is there a positive word of mouth out in the market surrounding your brand? Are you using the right recruitment firms who a) understand your market and b) are well placed to attract the right candidates into your recruitment funnel to open up meaningful discussions? Then once you have the candidates, how are you going to attract them to your organisation rather than a competitors during the interview process?
Retain – Now you have a great hire in place, what are you doing to keep them happy and challenged within your organisation? What new technologies are you adopting? What makes them want to stay in your firm rather than popping their heads up to see what else is out there?

3.Do what is right for your company

Yes it is important to have a handle on what systems your competitors are using but make sure you are selecting the right systems, technology and hiring the right personnel which are fit for your business and not just because your competitors are doing so. If you do that you will be following the path which the industry takes and not setting the course for the industry’s future.

As a niche Fintech recruitment firm, we have been helping numerous Funds, Asset and Investment firms across Australia with all levels of tech hires. We can help you select and attract top talent and look at avenues or retaining those hires.

If you’d like to find out more reach out to us, we are more than willing to assist where we can at sean.turner@kapital.com.au

I hope this has been useful.


Sean Turner – Founder and Director, Kapital Consulting

Recruitment . Made . Simple

2017 IT Recruitment Half Yearly Market Update

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Happy 2018 all and welcome to our half yearly IT recruitment market update for 2017 where we take a market snapshot, positions we saw in demand across the IT industry and news. The 2nd half of 2017 finished with a flourish with demand right across our client base where we had SAP, Testing, Systems Analysts, Development, Infrastructure, Architecture and Digital Strategy placements across Healthcare, Prop Trading, Buy Side Funds Management, Global Markets Banking, Insurance, Digital Consulting and Workplace Health and Safety – you can view a list of our 2017 successful engagements here – https://kapitalconsulting.com.au/2017successful-engagements/

As an approved supplier to the NSW Government Contingent Hire, we have seen much demand for our recruitment solutions and will see more demand throughout 2018 as more projects kick off in Q1 and Q2

Clients are looking for a good balance of contractors vs perm/FTE in their teams and would say we still in a candidate driven market where there is high demand for very niche skills and many tech staff tending to stay in their current positions as it seems there are projects and business critical initiatives happening across many industries and the rise of FinTech start-ups continues to put pressure on candidate supply.

Hot areas for us at the moment are across RPA, AI and Machine Learning with our clients across Sydney, Melbourne and Brisbane and as a result have hired Angela Kivell to lead this area for us so if you need resources in this space or looking for a move into RPA, then please reach out to her directly.

Another hot area continues to be the need for SAP resources at all levels across (HR, Payroll and Financials) with ECC6, HANA S4 and SuccessFactors as we have multiple roles current and coming up in this space for key Change and Transformation programs across a wide client base in this area for Sydney, Melbourne, Brisbane.

New Clients: We have picked up a number of new Tech Startup clients and an additional Insurance client who have been and will continue to actively hire throughout Q1 2018.

As always we are actively recruiting across a number of IT roles and across a wide client base so if you on the lookout for a change in career in 2018 or looking for that next hire for your team, then please reach out to us on 02 8070 7222, we always here to assist where we can

Till next time!

2017 Q2 IT Recruitment Quarterly Market Update

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Welcome back to our 2017 Q2 IT Recruitment Quarterly Market Update. After a relatively subdued start to the year in terms of overall IT client demand from the 1st Quarter, urgency went into 3rd gear for Q2 where we saw demand and assisted our clients across our Prop Trading, Financial Lending, Management Consulting, Digital, Private Healthcare and Funds Management client base where we placed Technical Business Analysts, System Analysts, Project managers, Developers and Testers.

This Quarter still sees a further push from clients, who traditionally hired many contractors, to focus on permanent hires and this would suggest longer term, business critical initiatives being signed off across Regulation Changes and strategic hires after a business model revamp which is what we witnessed for several clients last Q.

That said, Kapital Consulting is now an Approved supplier to the NSW Government 0007 Contingent Work hire scheme as well as the Government Digital Workplace so you will be seeing alot more demand for contractors from us through Q3 and Q4. This is an excellent opportunity for us to utilise our contacts with specialist skills across other industries who are looking for a change in vertical or who are possibly looking for a move from a permanent position into something a bit more “flexible” in what contracting offers so watch this space as we will be reaching out to you all soon.

Many clients have very successful graduate programs so if you are fresh out of uni and looking for a great career start into some dynamic Tech firms across Australia we would suggest reaching out to your ideal employer of choice for grad positions as they have very solid onboarding processes and a number of grad recruitment days a year also with referral schemes. A subset to this is that so much is being done around grad recruitment schemes and onboarding newcomers to the market that less time is available to search for mid to senior level and niche hires which is where we come in as a targeted headhunter and we definitely seeing this from many of our leading clients who are asking us to source very niche skills across all levels.

Hot areas for us at the moment are across Buy Side OMS (Order Management Systems) with many initiatives being thrown at increasing OMS connectivity for scalability and also due to the stepping up of MiFID II and another reg initiatives in the market meaning OMS need to be more flexible and have the ability to transmit and use more data for reporting. Other specialities in this domain are for FinTech Sales Specialists who are very familiar with OMS and Financial Markets STP (Straight Through Processing) and Trade Order Flows and Workflows.

The second hot area for us at the moment is across Development. Just when we thought the market had softened for more development positions the opposite happens. We are seeing demand for Developers at ALL levels and across all clients which is telling us that Q3 and Q4 will be 2 more great quarters with alot of client platforms being developed for the competitive edge they will need in the high demand markets we have today more than ever before. C++ and Market Links for gaming and prop trading clients is booming, Java within our Financial Services clients, MS BI Developers within Insurance and FinTech start-ups, UX/UI, HTML/CSS/JavaScript Developers and Designers within the Digital space.

Third area is Digital, we wrote a article earlier in the quarter around always asking clients what they mean by “a new digital hire”? as this could be anything from UX/UI Designers, HTML/CSS Development, Digital Strategy and Innovation, Customer Insights, Behavioural Analytics, Building a client MVP, Digital Disruption the list goes on. Digital is certainly a very interesting and ever evolving area with alot of noise in this space.

New Clients Q2: As mentioned earlier, now being on the NSW IT Government and Digital Workplace panels will open up many doors for us in the government sectors. We have also partnered with a number of new FinTech, Digital, Digital Consulting and Venture Capital start-ups in Sydney, 2 new Financial Markets Prop Trading Clients, a new leading HealthCare Client and 2 new financial services clients

From all we seeing, Q3 is going to be a gangbusters quarter for the Kapital gang and we hope you all have a very successful Q3. If you looking for a move and keen on a confidential chat to one of the team or just simply keen to get more information on the market or are a hiring manager looking for new and exciting hires, we always here to help so give us a shout on 02 8070 7222 or send us an email to info@kapital.com.au

Till next time!

2017 Q1 IT Recruitment Quarterly Market Update

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A new year presents both challenges and opportunities. So far in 2017 a perceptible trend has been on the demand for candidates with exposure to cutting-edge technologies. We have talked about the future of Big Data for the last 12 months, and are now starting to see a rapid growth in companies focussing in this area and integrating big data solutions.

 

Companies are seeking talented data solutions and Software Engineers & Programmers, accompanying with niche skills in languages such as Scala, Drupal and Python which is a field also expanding and building momentum.

 

There is a rise trend for emerging professionals that are adaptable and possess varied skill-sets, although this shows a threat to IT professionals who are specialist in their craft and have difficulty evolving in a rapidly changing environment. The market is hot and opportunities are endless for candidates testing their abilities across a variety of languages and technologies.

 

In terms of industry sectors we have noticed much demand right across the board for IT professionals across Legal, Funds Management, Insurance and Prop Trading. Management Consulting clients have been upping the ante late in Q1 which we will continue to see through Q2 based on a number of government initiatives underway.
We trust your 2017, brings you all you hope for and if you are interested in a move, please reach out to us, we always here to help.

Jan – Aug 2016 | Market Update, News

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I was asked recently to provide some market commentary on what we seeing happening in the IT space across Australia which I thought I would share with everyone

 

  1. What’s your view on the following types of roles:

Just for a bit of context, the below 3 areas were requested, and these areas are where we are seeing most demand across the board as well as Networking Engineers – you can see this from our 2015 and 2016 placements on our website http://kapitalconsulting.com.au/news/.

a. Applications Support/Infrastructure?

Unlike Infrastructure, the Application Support area is one where our clients are least likely to outsource to 3rd party providers as the business (Portfolio Managers/Front Office Traders/Insurance Brokers) are always wanting that good close relationship with IT to get technical issues resolved when under time pressure. That said we are also starting to see more of our clients bringing Infrastructure and Systems positions back into their organisation which over the last few years have been outsourced roles. There is high demand for good people in both of these areas and definitely a candidate market with salaries rising.

b. Business Analysis?

Business Analysis will always be an area of high demand however the gap which was once a chasm between an Application Support Analyst and a Project Manager profile is certainly closing. Post GFC, companies have all been about doing more with less and as a result a traditional Apps Support Analyst has been gathering the requirements, documenting and supporting the business and a Project Manager has been doing the same so alot more is expected from a traditional Business Analyst to operate at a “project manager level” in terms of maturity and autonomy. It is a very tight market to find good people in this field with specific industry experience.

c. Analyst/Developers?

Nearly every one of our clients over the last 6-12mths has been after a Developer of varying skills from C#, C++, Python, Web/PHP. I will be very surprised if these positions are ever outsourced as it is too close to a companies IP and forms a major part of their competitive advantage. A very high demand area and again a candidate market as clients are wanting specific industry experience in these areas which makes it harder to find.

 

  1. What is currently hot in the IT space at the moment, why?

Blockchain is a huge game changer for international financial services firms which will also mean heightened controls and governance to be put in place by companies for auditors and regulators

Data Analytics is a big growth area for our clients – visualisation tools like PowerBI, QlikSense and QlikView – we have a Hedge Fund client who showed me how they can visualize their client portfolios by spend, market exposure, demographics as well as manipulate client and market data to their needs which was really insightful

Data Science and Machine learning – Many companies are viewing data science in a way that it is a solution to almost any organizational problem.  The biggest opportunities for data science and machine learning is to utilize it to understand where incremental improvements can have the greatest return.  By increasing productivity by 1% in mature organizations can often return millions of dollars annually in savings or increased revenue.  A good data scientist knows that this is going to be working in continuous improvement and require a deep understanding of the business.  I have a friend in the Digital space who works for a large global organisation and who asked the board for $20M a year ago and in return would bring in over $200M within 2yrs – they didn’t really understand how he would do this nor whether it was even possible, they also didn’t truly understand what he did and thought he was crazy – 9mths later and $250M in revenue they wanted to sign off on more.

DevOps – a real mix match of technical skills which was once separated and which can now automate and make a business alot more streamlined in the system processing times and can add huge value in terms of speed. These include technologies across Unix Linux, Python, Puppet, Cobbler, Jenkins, Google GO, Docker. A real hot area and in high demand

 

  1. What skills are employers asking or expecting to see?

There has been a big shift in employer mindsets towards IT Staff. Traditionally clients were after very high levels of technical ability and negating the cultural and personality side of the applicant. Staff in IT departments were viewed by the business as “just a number” and a “tech savvy person to fix issues” and to have on board to get the job done. This has now changed to someone with alot more “technical value” and someone now seen by the business who can take the business forward in our new digital and data age. Instead of the business asking IT departments to fix issues, the question has now become, “what do we need to do technically to become better than our competitors and move our ideas forward?” Therefore the cultural and personality type questions are becoming more prevalent in interviews as technology hires need to pitch their ideas and substantiate their findings to senior C-Level executives and are more integral to the business than ever before.

 

  1. Are there any particular areas of concern?

We are entering a time where companies big and small, are becoming more entrepreneurial around technology and the need for experienced employees who truly understand how to interpret and how to use data as a competitive advantage is going to increase and cause alot more demand in this space which will become a candidate short market – the problem with this, as with any news area, employees sometimes do not know what they are really looking for from the person and are looking for answers from the hire who in an area with high demand, may not necessarily be able to answer the questions which the business is after or the business will only know the true benefits/value once the employee starts

 

  1. Anything else that you think might be worth noting?

I read an article recently published by a National Technology and Science reporter which noted that the number of young students enrolling in technology degrees has fallen substantially. I would not really be surprised by this even with the tech/data boom that we seeing. My reasons for this are that in the years following the 2009-2010 GFC we saw low levels of employment so younger students enrolled as they were spooked by the worry of not being hired and wanted to be better and more accredited than their competition in a job short market. Now with employment at good levels and still on the rise – grads want to get onto the employment ladder quicker and are rather opting to certify on necessary tech skills required to do the job at their employer rather than doing a master of science and technology as an example. Technology is changing very quickly so they are seeing it as more preferable to train in what is “new and now” rather than a degree which was drawn up 5 yrs ago or more

 

Sean Turner  |  Founder  |   KAPiTAL Consulting

Jan – Jun 2015 | Market Update, News and Placements

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Welcome to our first news letter, here you can find out all about who the industry movers were, how KAPiTAL went in the last 6mths and also how we see the market shaping up in the months to follow.

Market Update: The market as a whole was very busy from all accounts and across all industries. Most of our clients were recruiting at a steady pace in the lead up to the end of June and across vast technical disciplines. Many new initiatives were kicking off in the Prop Trading and Brokerage space across internal system upgrades and also the need for high calibre System Analysts/DevOps and Architect level profiles due to pure growth and the need to stay on top of their games. There was alot of movement across Funds Management with companies shifting their multi $Bn funds to new custodians due to the fallout with one or two clients which saw alot of recruitment coming out of this industry. Across Banking, 2 new FX projects kicked off for us which had demand for Snr Business Analysts and Testers across Front Office FX GUI Interfaces and also STP of trades to new and enhanced central sources. Management Consulting clients of ours won significant tenders which drove demand for high level structured programme resources to ensure timely delivery.

Placements: These are our placements for Q1 & Q2 and are across clients in Melbourne, Sydney and Brisbane. We also made placements with 2 new clients to add to our growing client base.

  • Program Master Scheduler – Top Tier Consulting Firm
  • Systems Test Lead – Banking and Finance Vendor
  • Automation Test Lead – Insurance
  • Snr Technical Business Analyst – Financial Services
  • 2 x FX Markets Business Analysts – Banking
  • Program Manager – Banking and Finance Vendor
  • Trading Systems Support – Prop Trading Firm
  • Application Support – Funds Management
  • Head of Testing – Funds Management
  • Snr Market Solutions Architect – Brokerage Firm

Months to follow: We are seeing a high demand for Big Data and Data Analytics across our client base and also more Data Warehouse and Business Intelligence programmes coming up which should lead to more demand in this space. Stay tuned for our next update later in the year.