CBA mulls First State sale

The Australian bank said it would consider a range of options, including an IPO, for the global asset management business, which manages around $12bn in listed and unlisted infra. 

Commonwealth Bank of Australia said it is undertaking a strategic review of its global asset management arm, Colonial First State Global Asset Management, which manages close to $12 billion of listed and unlisted infrastructure, hinting at a potential sale or an IPO of the business.

The asset manager, known as First State Investments outside of Australia, manages A$219 billion ($174 billion; €147 billion) in assets and has achieved “significant growth, scale and diversification under CBA’s ownership,” the Australian bank noted. 

“The strategic review will consider a range of options, including an IPO,” said CBA. The bank noted the review will take long-term shareholder value into account and consider whether “a separately listed First State would be better able to grow its business, serve the interests of its clients and attract and retain key personnel”. 

First State manages $5.4 billion in unlisted and $6.4 billion in listed infrastructure across the world, in addition to a range of other asset classes. As we reported last week, Philippe Taillardat, co-head of infrastructure investments in Europe, has just left the company. 

The departure comes as the firm is getting ready to begin fundraising for the second series of its European Diversified Infrastructure Fund this month. The European unlisted vehicle raised €700 million for during its first series in April and is targeting a total of €2 billion. 

A First State spokesperson said it is business as usual at the firm, and declined to comment on the strategic review.

In July, another Australian bank, Westpac, was in exclusive discussions with local property group Charter Hall on a potential sale of Hastings Funds Management, its second attempt to sell the Australian infrastructure business. The talks broke down in August after Charter Hall decided not to proceed with further due diligence on Hastings, which manages about A$12.8 billion across debt and equity for its clients. 

In a separate announcement, CBA said that Annabel Spring, group executive of wealth management, will leave the group in December, but continue to lead the wealth management businesses, the divestiture of life insurance businesses in Australia and New Zealand, as well as First State’s strategic review until end of this year.