Aussie Fund Manager Whose Stock Jumped 360% Plots U.S. Boost

  • BT Investment Management seeks a third of funds from U.S.
  • ‘We see the U.S. as an important part of our overall strategy’

Australia’s A$2.6 trillion ($1.9 trillion) investment industry isn’t big enough to keep BT Investment Management entirely within its borders.

BT, the nation’s 10th-largest money manager by assets, has ambitions to get around a third of its funds from the $36 trillion U.S. investment sector in the future, according to Chief Executive Officer Emilio Gonzalez. That’s more than double the current 15 percent, or A$13 billion, in U.S. assets that the company manages through its London-based J O Hambro Capital Management Ltd. arm.

“There’s no reason why we shouldn’t be looking at building an equivalent business to the size of Australia and U.K.,” Gonzalez said in an interview in Sydney. “We see the U.S. as an important part of our overall strategy.”

BT’s plans come as President-elect Donald Trump proposes to slash taxes, impose tariffs on Chinese imports and splurge on infrastructure, stoking market volatility as risky assets such as equities surge while inflation-sensitive instruments including U.S. Treasuries plunge. Despite such turbulence, Gonzalez sees opportunities over the long term to expand BT’s investment products across American equities and fixed income.

“The U.S. is a big market and in good times and bad times there are always opportunities there,” he said. “The pool of money doesn’t go away.”

Expansion Spree

BT’s shares have skyrocketed about 360 percent since it agreed to buy J O Hambro in July 2011. The company’s shares fell 0.71 percent to A$10.53 as at 11:45 a.m. Thursday in Sydney. The firm, which counts Westpac Banking Corp. as its biggest shareholder, oversees around A$84 billion, of which A$40 billion are Australian funds, A$31 billion in European investments and A$13 billion from the U.S.

Not every Australian company has succeeded in global expansion. Australia & New Zealand Banking Group Ltd. is looking to shrink its presence in Asia after selling some of its wealth units to DBS Group Holdings Ltd., and Insurance Australia Group Ltd. backtracked on its China expansion plans last year after failing to win major shareholder support for its ambitions. BT’s J O Hambro unit is also facing fee pressure in Europe, according to Credit Suisse Group AG analysts who cut the firm’s rating to “underperform” on Tuesday.

Even though BT is experienced in the acquisitions arena, it has ruled out striking a deal such as the one clinched by Janus Capital Group Inc. and Henderson Group Plc in October as the company is in a “different phase” of its business cycle, Gonzalez said.

While Australia’s benchmark interest rates are at a record-low 1.5 percent, the U.S. Federal Reserve hiked by 25 basis points earlier this month and signaled a steeper path for borrowing costs in 2017. Investors will need to be mindful of their exposure to assets such as infrastructure and real estate stocks that can be more vulnerable to tightening, Gonzalez said.

“They’ve all had their time in the sun,” he said.

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