Strategic Report

Our strategy remains focused on building a global asset management business that delivers exceptional investment returns to clients.

We continued our building-out of the US business and added to our capabilities with new investment teams and strategies. In the face of a varied and more difficult investment climate our revenues and margins have continued to grow as a result of a diverse portfolio of assets that have created a more resilient business. We continued to invest in talent; strengthened our distribution and operations; and have added management bandwidth, to manage a substantially larger business and drive growth whilst maintaining investment excellence.

We have achieved record financial results, growing Cash NPAT to $156.0 million, up 18 percent on last year. Consequently, we have increased returns to our shareholders, distributing 83 percent of Cash NPAT in dividends in line with our policy and paying a total dividend of 42 cents per share, up 14 percent on last year.

The table on the right details our strategic priorities, our achievements and progress during the 2016 Financial Year and focus for the year ahead.

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Grow in new and existing markets

Build our business in the US

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Purpose

  • BTIM has significant presence in the Australian and UK/European markets. These markets together represent approximately 35 percent of the global asset management industry.
  • BTIM is expanding its business in the US. The North American markets represent approximately half the global asset management industry.
  • The Asian market is a fast growing and sizeable market which presents opportunities for BTIM’s participation in the future.

FY16 Achievement

  • Continued to build out our US business.
  • Added management resources in the US and extended expertise in regulatory and legal with key appointments.
  • Attracted net flows of USD1.2 billion into US pooled funds. FUM now USD6.2 billion.
  • Launched new strategies, including International Opportunities Fund.

FY17 Focus

  • Continue ongoing discussions with investment talent that will add complementary investment strategies for the Group.
  • Target key platforms looking for high alpha funds.
  • Use strength of existing relationships to broaden our investment offerings.
  • Explore and understand Asian market opportunities and how best to participate.

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Build effective distribution channels

Utilise our distribution channels to drive sales

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Purpose

  • Sales and distribution is critical to driving demand for our products and attracting inflows.
  • We build effective distribution channels by:
    • increasing awareness of our investment teams and products
    • strengthening client relationships
    • developing new and existing distributor relationships
    • tailoring our service and products for markets and clients.

FY16 Achievement

  • Extended the availability of our products on a number of platforms globally.
  • Funded new mandates in equities and fixed interest asset classes.
  • Further built on the High Net Worth and private client channel strategy with the addition of new SMAs.
  • Increased investment in technology and marketing application to better target clients.
  • Achieved net flows of $4.4 billion, with significant contribution from the institutional channel of $3.6 billion.

FY17 Focus

  • Leverage growth through existing platforms.
  • Broaden distribution footprint geographically:
    • In Europe, further penetrate into existing markets and new markets such as in southern Europe.
    • In the US, continue to expand distribution footprint and target platforms seeking high alpha funds.
  • Build on strong UK relationships to maintain assets and extend product sales.
  • Build on success in the High Net Worth distribution channel and strengthen team with additional resources.
  • Greater focus on client head office as model portfolios gain prominence.

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Expand investment capabilities

Identify new investment capabilities to diversify and provide for future growth

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Purpose

  • We maintain a diverse and attractive product range for existing and new clients.
  • Develop opportunities for growth by expanding our investment capabilities that provides for future growth.

FY16 Achievement

  • Established Sydney‑based global equities team with the launch of a global investment strategy for the Australian market.
  • Launched new extension strategy, the International Opportunities Fund in the US.

FY17 Focus

  • Continue to identify new investment strategies and teams that will complement our existing investment strategies.

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Organisational structure

Operationalise the Group’s organisational structure to execute on strategy

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Purpose

  • As a growing business ensure there is clarity around strategic objectives and allocation of resources for efficient use of capital to maximise returns.

FY16 Achievement

  • Established the Global Executive Committee with the addition of new executives. This includes
    • New executive position to focus on international growth of the business
    • New CEOs for Australia and JOHCM, focused on delivering business strategy and
    • Creation of Group finance and risk functions.

FY17 Focus

  • Implement governance structure that reflects growth in the business globally.
  • Add offshore Director onto BTIM Group main Board.