Seven fund managers scoop up First Sentier mandates

Colonial First State (CFS) flags it will appoint seven new managers to take over several mandates that will be vacated by First Sentier Investments (FSI) following the shock closure of four local investment teams.

CFS has said it has been "actively sourcing well-credentialled replacement investment managers" since FSI made an announcement it is closing its Australian fixed income, global credit, equity income, and emerging companies units, and losing some $14 billion in assets under management.

Macquarie Investment Management is set to take home three new mandates.

FSI's Developing Companies (via CFS Managed Investment Fund product) will be replaced with the Macquarie Australian Emerging Companies strategy.

The First Sentier Diversified Fixed Interest option will be replaced with the Macquarie Dynamic Bond strategy, and the First Sentier Australian Bond will soon become the Macquarie Australian Fixed Interest.

BlackRock Investment Management is due to take over the CFS Index Australian Bond.

Janus Henderson's Diversified Credit option will likely replace the First Sentier Global Credit Income option.

Daintree Capital scored a mandate to take over the First Sentier Target Return Income with its Core Income.

The First Sentier Equity Income option will dissolve into the Martin Currie Australian Equity Income option.

The First Sentier Future Leaders option will be known as Investors Mutual Future Leaders, while the First Sentier Developing Companies (via FirstChoice) option will become the Longwave Australian Small Companies option.

CFS said it expects to finalise the confirmation of the new managers shortly and anticipates the portfolio transitions will commence from June onwards.

"FSI has committed to continuing to manage the funds in an orderly and prudent manner until the transition is complete. CFS will continue to monitor the management of the portfolios closely," it told investors in an update.

FSI is set to lose about 30 staffers by the end of the year, which represents about 7% of the Australian-based workforce. A smaller number are impacted in the UK and US.

The four units account for 5.8% of FSI's AUM out of its total $238 billion (as at 31 December 2023), meaning about $14 billion will leave the firm.

Mitsubishi UFJ Financial Group acquired FSI in 2019 for $4.2 billion. It was previously known as Colonial First State Global Asset Management when it was owned by Commonwealth Bank.

Last week, a Mitsubishi UFJ Financial Group subsidiary finalised its acquisition of Link Group, which sees the rebirth of the latter into MUFG Pension and Market Services. Link also delisted from the ASX on May 17.