Australian fund rebates fees to send 'clear message' on greed
By Paulina Duran
SYDNEY, Sept 4 (Reuters) - An Australian not-for-profit fund
said on Tuesday it will return millions of dollars in fees to
investors globally to differentiate itself from for-profit
rivals, as the country's financial sector reels from revelations
IFM Investors, Australia's second-biggest infrastructure
investor, said it had higher earnings than expected in the year
to June 30 and would return fees to keep its profit margin below
"We want to send a very clear message to our investors, and
indeed, our competitors, we are determined to set world-class
standards that genuinely put investors first," IFM Chief
Executive Brett Himbury said in a statement.
The infrastructure-centric fund manages about A$107 billion
($77 billion) for 312 institutional investors in 19 countries,
including sovereign wealth funds, endowment funds and insurers.
The rebate, equivalent to 7.5 percent of all investment
management fees paid over the past 12 months, amounted to tens
of millions of dollars, Himbury added without giving a specific
An ongoing quasi-judicial inquiry into Australia's financial
sector has found that some firms managing funds within the
country's A$2.6 trillion pension system may not be putting
customers' interests ahead of their own.
The Royal Commission last month criticised pension funds run
by two of Australia's largest banks, National Australia Bank
and Commonwealth Bank, for regulatory breaches
including overcharging customers.
The commission's final report due next year could recommend
major changes to Australia's financial regulations to ensure the
country's compulsory pension system is properly managed for the
benefit of savers.
While industry funds like IFM face criticism for having
union representatives without investment experience on their
boards, their lower fees mean they often produce better returns
for customers over the long term than so-called retail funds
owned by large firms.
"A lot of (asset managers) ... are outperforming
financially, but they are not necessarily outperforming for
their members," Himbury told reporters.
"That sort of behaviour needs to stop for the benefit of the
people whose money it is."
IFM is owned by 27 large pension funds.
($1 = 1.3895 Australian dollars)
(Reporting by Paulina Duran; Editing by Stephen Coates)
© 2018 Thomson Reuters. All rights reserved. Reuters content is the intellectual property of Thomson Reuters or its third party content providers. Any copying, republication or redistribution of Reuters content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters. Thomson Reuters shall not be liable for any errors or delays in content, or for any actions taken in reliance thereon. "Reuters" and the Reuters Logo are trademarks of Thomson Reuters and its affiliated companies.