In what may amount to a challenge, Henderson Group (ASX: HGG) is flagging a significant move into the local marketplace. A child of AMP (ASX: AMP) until 2003, Henderson has since grown into an impressive asset manager with a presence in North America, Europe and Asia. Owing to a handshake agreement not to directly compete for nine years, Australia has so far seen very little of this dual-listed entity.
Henderson Group is a British-based global asset manager with assets under management of $112 billion. Its main focus is on equities, fixed income and property. Its equity funds cover Europe, US, and Asia (to a limited extent). Overall, these funds have performed well over the past three years. Fixed income has a number of active strategies with a concentration on heavyweight corporate bonds, rather than government bonds.
In the property area, on June 24 2013, Henderson announced the establishment of a real estate global venture with a large US pension fund. A Fortune 100 company, TIAA-CREF (which stands for Teachers Insurance and Annuity Association – College Retirement Equities Fund and was founded by Andrew Carnegie) is the leading provider of retirement services in the academic, research, medical and cultural fields. TIAA-CREF will initially own 60% of the new venture and Henderson Group 40%. With access to finance and scale, this agreement looks to be a game-changer for Henderson's property interests.
So far, Henderson Group's move into Australia has been cautious, and it's not clear what its ultimate business model is. To date it has opened an office in Sydney, acquired a 33% interest in 90 West Asset Management (a boutique natural resources fund manager) and announced an intention to have $10 billion in assets under management by 2018. Rob Adams, the Australian executive chairman, has been quoted as saying: "Henderson is the purest funds management play in the market, and it has a flexible business model which allows us to buy businesses, seed new boutiques, or employ high quality managers under a corporate structure."
At present, HGG is a mere minnow in our pond, but with a history of deal making and innovation, plus an extensive range of investment options and strategies, longer term plans will aim higher. Established fund managers such as BT Investment Management (ASX: BTT) and Platinum Asset Management (ASX: PTM) may have a new neighbour.
Foolish takeaway
At $2.78, Henderson Group has a projected P/E ratio of 17 and an unfranked yield of 4% and its cash position is good. It's no bargain, however, this company remains well positioned for further organic growth and any sustained improvement in European economic conditions. HGG is definitely one to consider for the watchlist.
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Motley Fool contributor Peter Andersen owns shares in Henderson Group and Platinum Asset Management.
