Brutal competition for asset management
LEHMAN BROTHERS’ PURCHASE of Australian investment and advisory house Grange Securities in March was a milestone for the market: the last remaining global investment bank to be absent from the country had belatedly decided to take it seriously.
Now all the big world players have a meaningful presence in the country, and pretty well all of them are talking about expanding their businesses there. Australia has a low population – just 20 million – but boasts the fourth-largest asset management market in the world, is a focal point for private equity, and has an increasing roster of globally competitive and fund-hungry domestic companies. Underpinning it all is an uncommon economic resilience: it is now into its 16th consecutive year of GDP growth in excess of 3%.
International banks’ approach to the Australian opportunity has varied but in almost all cases has involved them buying their way into franchises, often bolting on more and more small acquisitions along the way over a period of a decade or more. So it is that UBS, widely considered the leading foreign investment bank in the country, traces its heritage not only to the legacy businesses of Swiss Bank, Warburg and UBS, but the local Potter Partners retail stockbroking business.
