MENU

Henderson adds $342 million to funds under management

UK-based global fund manager Henderson (ASX: HGG) — which was spun out of AMP (ASX: AMP) in 2003 — has announced the purchase of H3 Global Advisors.

The purchase of the Australian-based H3, which describes itself as “one of Australia’s leading alternative asset management firms, with an extensive track record in commodities futures and absolute return trading programs”, comes less than a year after Henderson announced that it would enter the Australian market through the partial acquisition of 90 West Asset Management – a global resources fund manager.

The acquisition of H3 is expected to add $342 million in funds under management to the group and follows the establishment of an alliance with TIAA-CREF to combine their real estate businesses to create a venture with around $21 billion in assets under management.

It is interesting to see the different manoeuvres being undertaken by fund managers in Australia. Perpetual (ASX: PPT) shut down and outsourced its global investment capabilities in 2011 following a review of its international capabilities. Meanwhile, Magellan Financial Group (ASX: MFG) has built an enormous business in a relatively short space of time by purely focussing on a domestically based international funds management capability.

Foolish takeaway

Financial service firms, particularly fund managers, which are highly leveraged to improving equity markets, have seen their share prices surge in the past 12 months. Henderson, Perpetual and Magellan are up 115%, 52% and 138%, respectively. This has resulted in much of the future earnings potential already being priced into the stocks.

AMP, meanwhile, with its exposure to a lagging insurance business, is down 1% over the same period. While headwinds in the insurance business are expected to take some time to overcome, it is amongst the few remaining laggards that savvy investors may find opportunities.

Our top dividend stock -- FREE!

Discover The Motley Fool's favourite income idea for 2013-2014 in our brand-new, FREE research report, including a full
investment analysis! Simply click here for your FREE copy of "The Motley Fool's Top Dividend Stock for 2013-2014."

Motley Fool contributor Tim McArthur owns shares in Henderson Group and Perpetual Ltd.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss a very important event! Chief Investment Advisor Scott Phillips and his team at Motley Fool Share Advisor are about to reveal their latest official stock recommendation. The premium “buy alert” will be unveiled to members and you can be among the first to act on the tip.

Don’t let this opportunity pass you by – this is your chance to get in early!

Simply enter your email now to find out how you can get instant access.

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our Financial Services Guide (FSG) for more information.