By RICHARD BRADDELL
Tower Managed Funds expects to cut the 40 or so funds it offers to about 20.
Managing director Stuart Fish said a targeted $3 million in savings had been achieved from merging Tower's other savings product arm, Tower Investment Savings, with Tower Managed Funds.
But the drive to improve product quality had to continue in an ever-competitive market.
Mr Fish confessed that Tower had been slow in bringing a master trust to the market, but said that in the month one had been available it had attracted $30 million from investors.
Master trusts' structure enables them to invest in a broad range of funds, which may be managed by global or third parties.
Tower's own tied agents had lined up alongside independent financial advisers in wanting a master trust investment because it gave access to third-party fund managers, said Mr Fish.
Tower Managed Funds is the product "manufacturer," distribution manager and administrator, while Tower Asset Management is a separate division responsible for investment management.
In the past year, funds under management have grown 15.4 per cent and the group leads in retail funds management with the $2 billion under management accounting for 12 per cent of the market.
In total, Tower has $3.8 billion under management, including the traditional life and corporate superannuation funds.
In the past year, returns on international funds have ranged between 20 and 30 per cent, with big help from the declining New Zealand dollar.
Mr Fish said the funds management industry overall, like Tower, was likely to consolidate, offering fewer investment vehicles.
With 38 fund managers, and only 10 recording positive inflows, he thought it likely many would disappear. Some had less than $1 million under management.
Tower might be interested in taking some over, or it might form an alliance. But the target would have to be of reasonable size to be worthwhile, and Mr Fish said that Tower had not been willing to pay the price for assets previously on offer in New Zealand.
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