Fund Product, Company and Regulatory Updates as at 27 August 2019


Product Updates

Zurich Investments signs retail distribution agreement with boutique

A small caps boutique running out of Sydney has signed a deal with Zurich Investments and will be managing Zurich’s $60 million small companies fund. Zurich Investments is now the sole distributor of the Frank Villante and Paul Biddle’s small caps boutique Celeste Funds Management. So far the 21-year-old fund has done its retail distribution in-house, but Zurich will now take over the task in Australia.


Company Updates

Super Life for women to launch

Founded by chief executive, Pascale Helyar-Moray, Super Life is a superannuation fund for women to help women achieve economic equality. Helyar-Moray was previously the head of Human Super, but is now leading the way for women to have better retirement outcomes and financial wellbeing at Super Life. Super Life aims to invest in female-friendly companies, with financial education a primary focus.

Superannuation was not built for women; it was built for working men, like almost everything from furniture to car design.

AMP Capital restructuring real estate arm

Leadership at AMP Capital has undergone change with the real estate business split into two specialist sectors, retail, and office and logistics. Brett Williams and Luke Briscoe will be the managing directors (Williams of the retail arm, Briscoe of the office and logistics arm), reporting to Carmel Hourigan. Williams is currently the fund manager for AMP Capital’s Diversified Property Fund (ADPF), while Briscoe’s role has been expanded from simply the office and industrial managing director.

Head of international strategy, real estate, Merran Edwards, is the new chief financial officer of the real estate division. Kylie O’Connor is moving from chief operating officer to an extra role as managing director of separate accounts as well.

John Dynon, current global head of real estate separate accounts and specialist funds, is the new head of origination and capital.

The role of head of real estate funds management has been cut, leaving Chris Judd, an AMP Capital veteran, a director of Precinct Properties until early 2020, and helping with the transition team.


Regulatory Updates

Westpac wins ASIC ‘test case’

The Australian Securities and Investment Commission (ASIC) commenced Federal Court proceedings against Westpac as a ‘test case’ for responsible lending provisions of the National Consumer Credit Protection Act 2009 (Cth), with the matter heard in May 2019. A decision was reached by the judge. The matter concerns allegations of Westpac providing people with unsuitable loans. The Act requires lenders to assess customers to ensure they are suitable for certain loans. ASIC alleges that Westpac’s automated assessment system used a benchmark for consumer expenses, instead of real customer expenses, thus breaching its obligations. When assessing home loans with an interest-only period, ASIC alleged that Westpac was supposed to have regard to the higher repayments at the end of the interest-only period, however did not do so.

The judge, Justice Perram, found that a lender may do what it wants during the assessment period, and that other provisions of the Act result in penalties if lenders offer consumers unsuitable loans after that process. Westpac was found by Justice Perram to have taken declared living expenses under consideration, since another of Westpac’s system rules compared declared living expenses to income (but left out other expenses including the repayments of the loan). This was decided to be a measure of suitability.

ASIC is reviewing its responsible lending guidance.