Australian Ethical bleeds $500m amid geopolitical tension

Australian Ethical's funds under management sits at $13.57 billion, dipping by over $500 million since December as investment performance was hit by the conflict in the Middle East. But this was offset in part by the signing of a new institutional client.

Superannuation and institutional investments performed soundly, adding net flows of $100 million and $10 million, respectively.

Member acquisition for super increased 17% compared to the prior quarter, reflecting the restored Employment Hero platform functionality, Australian Ethical said, with the momentum expected to carry through in future quarters.

Meanwhile, the ethical manager continues to make progress across its newer growth channels, including gaining traction in the middle market segment by securing a new $50 million not-for-profit client.

The first $20 million of flows were received on March 26 and more details will be released in due course.

Additional middle market opportunities are progressing through the pipeline, the ethical manager noted, stating the positive inflows provided some resilience against the anticipated higher-than-usual redemptions during the period.

Despite the launch of its Growth Opportunities Fund to strengthen it private markets offering to wholesale investors, overall net flows for retail and wholesale investments were -$10 million in the period.

Investment performance was also impacted by "challenging" market conditions, and as a result, Australian Ethical recorded negative investment performance of $0.63 billion, or -4%, for the period, it said.

Commenting, Australian Ethical managing director John McMurdo said despite the ongoing uncertainty the milestones reached in the period represent meaningful progress towards growing across all metrics.

"Australian Ethical continued to deliver positive superannuation net flows and made strong progress across newer growth channels during the quarter. The diversity of our business model is supporting resilience while enabling us to build momentum beyond our core superannuation offering," McMurdo said.

"Australian Ethical continued to deliver positive superannuation net flows and made strong progress across newer growth channels during the quarter. The diversity of our business model is supporting resilience while enabling us to build momentum beyond our core superannuation offering."