Ethical fund manager sets ambitious FUM target

A leading ethical investment manager says it is aiming for a target of $20 - $25 billion in assets under management, and has strengthened its adviser sales, distribution, and investment teams.

Australian Ethical has hired Keenan Bunning and Jeannie Bredberg as senior managers - adviser relationship, and Sara Wakefield as B2B marketing manager.

The leading ethical fund manager is focusing on adviser relationships and B2B distribution due to strong demand in those channels, driving record numbers of new customers as the fund manager topped $5 billion in funds under management by the end of 2020.

"Investors are expecting more from companies and investment managers, particularly around the accountability of social and environmental issues," said Leah Willis, head of distribution at Australian Ethical. "We have seen significant consumer demand, and adviser demand is catching up. It is a strategic goal for us to extend our reach into the adviser channel, and we are responding to that growing demand from advisers who are seeking more answers about how they reply to investors questions about ethical investments."

In the 2019-2020 financial year, Australian Ethical's customer base grew by 20%, with managed fund customers increasing by 16% and super members by 20%, according to their annual report.

Recent research sponsored by Australian Ethical found that 86% of Australians believe that it's important their adviser asks them about their values in relation to their investments. Nine in 10 respondents also believed it was important that their adviser provided responsible or ethical investment options.

Australian Ethical also noted that feedback from advisers led Australian Ethical to launch its first Separately Managed Account (SMA) portfolio in April 2020 which has since seen returns of 41.1% to 31 December 2020.  The SMA is now available on Hub24 and Praemium, according to the annual report, and Willis confirmed that it will be on more platforms in the near future.

Bunning and Bredberg will focus on adviser outreach, dealer group APLs and other models, while Wakefield will also work with advisers, as well as the high net worth, charity, foundation and family office sectors, Willis said.

Australian Ethical has set its sight on its next target for funds under management, although Willis didn't name the timeline for hitting that goal.

"We feel we can be a significant player in the Australian marketplace, at $20-25 billion in funds under management with the performance that we've had as well in terms of investment return," she said.

Australian Ethical has also reported that managed fund performance has been strong with 12-month returns of 21.0% for the Australian Shares Fund (ASF), and 35.1% for the Emerging Companies Fund (ECF) to 31 December 2020.

Australian Ethical has promoted Mike Murray to head of domestic equities and will be responsible for overseeing the award-winning active equities team and processes. There is no change to the roles of portfolio managers Andy Gracey and Ray Gin.

"In promoting Mike Murray to head of domestic equities,  that's certainly a strategic goal that we're geared up from the investment expertise as well as the distribution side," Willis said. "We would like to make ethical investing available to all Australians, we believe in that positive force."

Sister publication Financial Standard recently profiled Australian Ethical CEO John McMurdo on how his passion for mountain biking supports his love for challenges in other arenas, such as wealth management.

Read more: Australian EthicalMike MurrayLeah WillisJohn McMurdoJeannie BredbergKeenan BunningSara Wakefield
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