Dumb time to close fund management business
Thursday, June 5th 2003, 5:40PM
by Philip Macalister
Australian-based fund manager Challenger International is closing down its New Zealand office at a time when it is starting to generate good funds flow in the market place.
The decision is consistent with Challenger’s desire to focus on its core operations in Australia, however it hasn’t been well-received by local staff.
"It's just a dumb decision,” Challenger’s New Zealand chief executive John Rowley says.
"If you're going to be in the New Zealand market you have to be in it now. There's a huge opportunity."
He says the business is starting to make good progress in the market pulling in nearly $70 million in the past year, and the majority of that in the last couple of months.
While Challenger has tried a number of new products in the past three years including endowment warrants and an ethical fund, its latest two, a hi-yield fund and an Australian share one have been real winners.
He says these funds have been performing very well.
Rowley says the timing of the move is dumb because many other fund managers are struggling at various levels, the New Zealand Superannuation Fund money is going to be invested soon and the government is keen to encourage workplace savings.
The office will close on June 30 resulting in six people losing their jobs.
The end of Challenger also spells the end of the Coronet Asset Management business which the company acquired a number of years ago. No plans for what will happen to these funds has been decided yet.
Rowley is resolute about staying in the industry, and is keen to find a company "who is determined to be in New Zealand."
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