This report is aimed at providing a high-level snapshot of the recent market activity across project delivery in the Investment Management space across Australia.
Current project trends
Several large custody and registry transitions are underway with Investment Managers. This is an active part of the market with more transitions and consolidations on the horizon.
Several Super Funds are in the middle of implementing new unlisted assets (private markets) systems. This has been part of a broad push to move away from manual processes and spreadsheets across the industry.
There are some ongoing performance and attribution implementations taking place with Investment Managers and Super Funds.
Several Fund Managers have released new ETF products into the market.
Employment market trends
Despite some initial signs of recovery in February 2024, the market has since slowed down again, resulting in less discretionary projects being approved and fewer available roles.
Whilst there is undoubtedly more choice in the market for employers, this isn’t always equating to better options for employers as the availability of good quality resources remains limited with most engaged-on projects.
Some candidates are showing flexibility on day rates due to market conditions but caution is advised against lowballing as loyalty may be tested when the market returns and better offers arise.
Due to the current cost pressures, we have observed some project teams have been unable to resource their teams to adequate levels, potentially leading to overworked team members.
M&A Activity (recent announcements or in discussion)
The M&A market has quietened, with no major new announcements. The high interest rate environment and fund outflows are creating uncertainty among Investment Managers, while Super Funds are experiencing a slowdown in acquisitions after significant activity in 2022 and early 2023.
Watch this space and questions moving forward.
The big question is when will the market rebound? This is always hard to anticipate however we have some optimism that we’ll see some improvement in the next 6 months. We are seeing some early signs but we’re not willing to call it yet. Tight job markets are often followed by a sharp turnaround.
Listed Investment Managers are currently navigating fees being squeezed, high interest rates and more internalisation with Super Funds. As a result, are we poised to see some further consolidation as some of these businesses seek out synergies and scale?
With the momentum of superannuation mergers slowing down, it appears that funds are better able to navigate the Your Future Your Super. However, many industry experts are still expecting some acquisitions as some of the smaller fund’s grapple with increasing regulatory costs and the need for economies of scale.
If you would like to discuss any of the above or would like to have a general discussion about the market, please call Steve Ash on 0439 441 758.
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