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Axa ads muscle to funds management strategy with Australasian joint venture

By Ray Lilley

Friday 27th October 2000

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All Axa funds management in Australasia will be handled by joint-venture partner Alliance Capital by the end of the year, as the company moves to strengthen its operations in both markets.

Axa's retail product brands will remain in the marketplace but they will be invested and managed by Alliance Capital Management in the two countries.

The Alliance Capital Management joint venture aims to lift Axa's retail funds marketing to a top five place in both markets "within two years," Alliance manager New Zealand James Thyne said.

"We're employing a top funds manager to invest and manage funds for Axa.

"Till now Axa has not rated in the top 12 in New Zealand in retail funds flow."

Axa had lacked research house support in both markets, and the joint venture would rapidly improve market perceptions of investment management capability.

Tapping into Alliance Capital, a part of the world-wide Axa group, meant the local companies could move quickly to upgrade performance, rather than building the team gradually over time.

Mr Thyne said, "This is the fast-track route to better growth, transforming the business into part of a global funds management operation.

With Alliance Capital's funds management expertise, global research and information systems, Axa would return a better investment performance from a beefed-up product range and sales effort.

The result would be a different company, more closely linked to a wider range of products and to offshore opportunities.

"The New Zealand and Australian [merged Axa] operations complete a global funds management network for Alliance," widely known for its commitment to spending cash to achieve results from investment research.

As local investors moved more of their investment portfolios offshore, the Alliance Capital linkup would be seen as "a positive move for the investment industry in New Zealand."

Alliance, with a 20-year record of managing US active equity portfolios, has out-performed the Standard & Poor's index by an average 4% a year.

From having $US79 billion funds under management in 1990, Alliance Capital by this year had $US440 billion under management and a "consistent performance record."

Mr Thyne said the joint venture would have access to more than 250 Alliance Capital research specialists able to provide global perspectives on stocks as diverse as telcos, airlines and utilities.

"Global trends are now driving such stocks" and Alliance Capital spends $50 million a year running its intranet system alone for its investment professionals.

"No other New Zealand [investment] team has such access ... to such key information for clients ... who are already looking for managers with global capability."

The group plans to launch new retail investment products in the local market in the first half of next year.

Axa Asia Pacific Holdings and Alliance Capital Management will each hold half the equity in the joint ventures, with operations based in Wellington, Sydney and Melbourne.

Daily operational management will be under Alliance Capital's control.

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