BT Investment Management funds fall

Wealth management has been a source of high growth for Westpac in recent years, due to the strong performance of BT Financial Group, but interim results for the spin-off BT Investment Management announced yesterday signal a slowdown in the sector.

BT Investment Management, which was listed on the ASX last December but is still 60 per cent owned by Westpac, reported an eight per cent fall in funds under management over the six months to March.

The company said the reduction from $41.9 billion in September to $38.2 billion at the end of March was due to an 11 per cent fall in the market value of its assets. This was offset by a three per cent increase in net inflow.

The company earns an average 35 basis points margin on its assets. This is considered a low margin book and BTIM chief executive Dirk Morris has made it one of his goals to move the company into higher margin business.

The company earned a net profit of $9.5 million for the half, on revenue of $71.2 million.

The company is ungeared and has $47.8 million in cash and plans to use it to develop its "house of boutiques" strategy.