Global players flag expansion

12 April 2006

| By Mike |

After a period of general consolidation in Australia, the custody and investment administration markets appear set for new competition with two global players signalling a desire to expand their interests in the region.

Both Mellon Global Investments and BNP Paribas have indicated that they will look to grow their Australian presence if the right opportunities arise.

vice-chairman used a visit to Australia last month to announce that assets under management by Mellon in Australia had broken through the $10 billion barrier and at the same time suggested the company was positioned for further growth.

“Custody is the market we’d be interested in,” he said, suggesting that Mellon might be prepared to look at an acquisition or a joint venture in circumstances where it felt it was under-represented in the region.

O’Hanley’s visit to Australia came a few weeks ahead of that of BNP Paribas global head of coverage . He also indicated that the company would be looking to grow beyond its initial investment in Australia, more than two and a half years after acquiring AMP’s investment administration business, Cogent.

Cock said that the first challenge to have confronted BNP Paribas had been to diversify beyond the pre-existing AMP client base, with the second challenge being to look to external growth.

“We have always said that if the right opportunities were to arise then we would look at them with great interest,” Cock said.

Looking at the broader security services sector, Cock said that sooner or later companies needed to review their positions and determine the level of investment required and whether they wanted to stay in the market.

“You need global capability and global clout to stay in the game,” he said.

While Mellon is regarded as a major player in terms of global custody it has played only a limited role in the region, providing platform services to other companies active in the Australian market.

However, O’Hanley regards Australasia as being a strong growth region for Mellon.