IFM gives 7.5% fee rebate to clients and challenges rivals to follow suit

Institutional clients will receive ‘tens of millions’ of dollars as the majority of the fund manager’s investments meet or outperform objectives.

Melbourne-based fund manager IFM Investors will issue a 7.5 percent fee rebate to its clients and has challenged rivals to do the same.

Chief executive Brett Himbury said the rebate is equivalent to 7.5 percent of annual net recurring investment management fees paid by IFM’s 312 institutional investors in the year ending 30 June 2018 and is in lieu of a dividend to its 27 not-for-profit superannuation fund owners.

It is not clear how much the rebate is worth to IFM, but a spokesman said it would be “tens of millions” of dollars.

Himbury said 89 percent of IFM’s products and mandates across its four asset classes of infrastructure, debt, listed equities and private equity were meeting or outperforming client objectives on a rolling five-year basis, after fees and taxes.

He added that IFM’s ownership model and structure enabled the rebate and challenged fellow investment managers to follow suit.

“While other fund managers are looking to preserve margins in increasingly competitive markets, IFM Investors continues to innovate as it builds its position as a leading provider of net returns to institutional investors globally,” Himbury said.

“Our unique ownership structure and the strength of our performance provides us the flexibility to implement a capital management programme that can rebate fees to investors, invest in scale and provide the flexibility to retain funds to seed new investment capabilities.”

IFM’s funds under management stood at A$107 billion ($76.8 billion; €66.4 billion) on 30 June, an increase of 15 percent on the previous year.

Its pre-tax profit margin grew to 25 percent, which the company described at the time as “remaining deliberately and substantially below peers globally given our alignment with investors and the nature of the business model”.

IFM has not yet filed its full accounts for 2017-18.