From the time it was the tiny First State Fund Managers in 1988 (it reached its first billion in 1991) within State Bank of NSW, until shortly after the purchase of Colonial by CBA in 2002, Chris Cuffe and his colleagues built a wealth management powerhouse. A few years after Chris left, Colonial First State was divided in two: the retail platform and distribution business and the funds management business.
The latter was called Colonial First State Global Asset Management (CFSGAM), and CBA completed the sale for $4.1 billion last month to Mitsubishi UFJ Trust and Banking Corporation (MUFG).
The retail business of Colonial First State (CFS) remains within CBA, with plans for its divestment put on hold following the problems with financial advice.
The need for a complete rebrand
Under new owners and signifying both the end of an era and a complete fresh start, CFSGAM has announced the rebrand to First Sentier Investors (First Sentier).
First Sentier will operate as a standalone business governed by a Board of Directors with assets under management of $223 billion as at 30 June 2019. Its clients extend globally across Asia, Australasia, Europe and North America.
Outside Australia, the business was known as First State Investments or FSI. It gives a hint to the choice of the 'Sentier' name, given the value of retaining the FSI identity in some markets. CFSGAM made most of its revenue overseas due to the higher-fee funds, although asset levels are higher in Australia.
First Sentier CEO Mark Steinberg said the rebrand represents a coming of age.
“We want to come together under one global brand name for the interests of our clients and our employees, and we want a name that allows the business to maintain a link to our origins, while also signalling our vision for the future. We are a global business and we require a global brand name.
“The word ‘First’ provides a link to our heritage, and ‘Sentier’ is a word of French origin meaning ‘path’. Our new brand name reflects our commitment to follow our own path, investing responsibly to create a better future for our clients, employees and the communities in which we invest,” he added.
Stewart Investors, FSSA Investment Managers and Realindex teams will operate under their current brand names.
In Sydney, the rebrand coincides with the business’ physical separation from CBA’s Darling Park building as it relocates to Tower Three, International Towers in Barangaroo, a 5-star NABERS Energy Base Building with a 6-Star Green rating. It aligns to First Sentier’s Responsible Investment and business principles.
Other elements of the separation
MUFG operates a substantial wealth management business in Japan, and although owning First Sentier now gives it a global footprint, the new business will comprise only about 20% of all MUFG's assets under management.
Through the close relationship with CFS, First Sentier funds are prominent on the FirstChoice and FirstWrap platforms, although for many years, arm's length negotiations have brought competitive fee tension. As well, First Sentier funds feature on many other retail platforms, and now begins the process of familiarising the market with the new name. The main empahsis will be into adviser and institutional channels, but the importance of retail branding is not underestimated. A series of videos featuring their senior fund managers appears under www.curiousfirst.com.au to assist in the new identification.
Previously, within the CBA Group, centralised services such as finance, legal, compliance and HR influenced management and decisions. The complete break allows First Sentier to take complete responsibility for these functions and forge an independent path.
Why 'Sentier'?
As part of the deal between CBA and MUFG, the 'Colonial First State' brand was retained by CBA and a new identity was required for the fund manager. In any case, the division between CFSGAM and CFS in Australia was confusing and a fresh name was welcome.
Anyone who tries to rebrand a business and acquire the company name, url and trade mark soon finds out that many names in English are already taken (I was delighted when choosing the new name for Cuffelinks that Firstlinks was available because it was the name we wanted).
Mark Steinberg says this encourages companies to look at other languages, and hence 'sentier' or path in French, signifying taking a unique pathway in its strategy.