CBA to float global asset management arm

  • By Elizabeth Fry
Asset_management

The Commonwealth Bank is eyeing a $4 billion ASX listing of its global funds management unit in a bid to further shrink its wealth business.

After carrying out a strategic review of Colonial First State Global Asset Management CBA has decided an IPO is the best option.

The global fund manager has $219 billion under management. Last year, it earned $837 million in funds management income.

"In making our assessment, we examined long-term Commonwealth Bank shareholder value and also considered the ability of CFSGAM to serve the interests of its clients, attract and retain key personnel and better grow its business," CBA said in a statement.

"While CFSGAM has achieved significant growth, scale and diversification under the current ownership structure, the strategic review determined that an independent ownership model would provide greater benefits."

The lender is aiming to compete the spin off and float of the fund manager by the end of this year.

At the same time as announcing the strategic review last September, CBA also announced the sale of its life insurance business to AIA for $3.8 billion.

Board members

Ahead of the potential listing of CFSGAM, CBA said it had already secured agreement from several candidates to form a board of the new company.

The proposed chairman is John Mulcahy, the chairman of Mirvac and a former chief executive of Suncorp Group.

Other members of the board include Susan Doyle, James Millar, Gail Pemberton and Richard Wastcoat.

CBA said Colonial's current chief executive Mark Lazberger would continue in the role and be appointed to the board.