Colonial First State

Australian wealth management group

This article is about the wealth management company. For the former division formerly known as Global Asset Management, see First Sentier Investors. For the former client formerly known as CFS Retail Property Trust, see Novion Property Group.

Colonial First State

Formerly| First State Fund Management (1988–1994)
State Bank (1994–1996)
Colonial State Bank (1996–2000)
Company type| Subsidiary
Industry| Financial Services
Founded| August 1988 (First State)
23 November 1994 (Bank)
23 September 1996 (CFS)
Headquarters|

Sydney, New South Wales

Australia

Key people

| Clive van Horen - CEO
Products| Investment, Superannuation and Retirement
AUM| AU$147.4 billion (July 2023) [1]
Parent| KKR (55%)
Commonwealth Bank (45%)
Website| www.cfs.com.au

Colonial First State (CFS), is an Australian wealth management group that provides investment, superannuation and retirement products to individuals as well as corporate and superannuation fund investors.[2]

## History

[edit]

The company was established in 1988 when the State Bank of New South Wales created First State Fund Management as a subsidiary. In 1994, Colonial Mutual acquired the State Bank of New South Wales from the NSW Government, and on 23 September 1996 the merged entity was rebranded as Colonial State Bank, with First State Fund Management being branded as "Colonial First State" (CFS).[3][4][5] CFS demutualised in 1997 and in 2000, it was acquired by the Commonwealth Bank, with the Colonial State Bank division being merged into the Commonwealth Bank.

In May 2020, owner Commonwealth Bank announced that, subject to gaining approval from the Australian Prudential Regulation Authority and Foreign Investment Review Board, it would sell a 55% interest in the business to KKR.[6][7] The transaction was completed in November 2021.[8] On 1 December 2021, CFS became a standalone company.[citation needed]

CFS announced its commitment on climate change, aligning CFS to the goals of the Paris Agreement and committing to net zero emissions by 2050 and to a 30 per cent reduction in Greenhouse Gas emissions from 2019 levels for its investment portfolios.[9]

## Controversies

[edit]

In 2020, the Australian Securities and Investments Commission (ASIC) commended legal proceedings against Commonwealth Bank and CFS in relation to alleged conflicted remuneration of $22 million paid by CFS to Commonwealth Bank for the distribution of a super product issued by CFS. In 2022, the Federal Court of Australia dismissed the case and in 2023 dismissed an appeal by ASIC.[10]

In 2021, the Federal Court of Australia fined CFS $20 million for misleading superannuation members, resulting in CFS paying $67 million to remediate losses to 5,815 members. The court found that:

* CFS had told its members that legislative changes required CFS to contact them to obtain an investment direction to stay in the FirstChoice Fund when that was not the case
* CFS failed to tell members that if Colonial did not receive an investment direction from the member, it was required to transfer the member's superannuation contributions into a MySuper product.[11]

In 2022, CFS settled a $56.3 million class action lawsuit with Maurice Blackburn for allegedly failing to transfer beneficiaries’ accrued default amounts to a MySuper as soon as reasonably practicable, however, the settlement came with no admission of liability or wrongdoing by CFS.[12]

In 2023, CFS settled a $100 million class action lawsuit with Slater & Gordon for allegedly raising fees on superannuation members to fund ongoing commissions to financial advisers, however, the settlement came with no admission of liability or wrongdoing by CFS.[13]

## References

[edit]

1. ^ "Colonial First State delivers double-digit returns for MySuper members in FY23". Colonial First State. 20 July 2023. Archived from the original on 9 November 2023. Retrieved 29 March 2024.
2. ^ "CBA ASX announcement: Divestment of global asset management business" (PDF). firststateinvestments.com. 31 October 2018. Retrieved 19 March 2019.
3. ^ Flint, Jeremy (30 August 1996). "Colonial's State Bank gets ready for a new name". The Sydney Morning Herald. p. 23.
4. ^ Verrender, Ian (23 September 1996). "Change of name for the State Bank lacks note". The Sydney Morning Herald. p. 3.
5. ^ Hornery, Andrew. "Yawns all round for bank revamp". The Sydney Morning Herald. p. 2.
6. ^ "CBA announces agreement to sell 55% stake in Colonial First State to KKR". www.commbank.com.au. Retrieved 28 March 2024.
7. ^ "Colonial First State Leadership Team Update :: Colonial First State". 5 July 2021. Archived from the original on 19 July 2021. Retrieved 28 March 2024.
8. ^ "Completion of sale of 55% interest in Colonial First State to KKR". www.commbank.com.au. Retrieved 28 March 2024.
9. ^ "Colonial First State commits to net zero by 2050". Colonial First State. 28 October 2021. Archived from the original on 5 November 2023. Retrieved 28 March 2024.
10. ^ "23-222MR Full Federal Court dismisses ASIC appeal but clarifies conflicted remuneration provisions". asic.gov.au. Retrieved 28 March 2024.
11. ^ "21-276MR Colonial First State to pay $20 million penalty for misleading superannuation members". asic.gov.au. Retrieved 28 March 2024.
12. ^ "NOTICE OF PROPOSED SETTLEMENT" (PDF). Maurice Blackburn. 2 May 2022. Retrieved 29 March 2024.
13. ^ "CBA's former wealth arm settles class action for $100m". Australian Financial Review. 14 July 2023. Retrieved 28 March 2024.

## External links

[edit]

* Company website

* v
* t
* e

Commonwealth Bank

Subsidiaries|

* ASB
* Bankwest
* Commonwealth Bank
* Colonial First State (45%)
* CommSec
* Sovereign Limited

Former subsidiaries|

* CBHS Health Fund
* Colonial First State Global Asset Management

Notable people|

* Catherine Livingstone (Chairman)
* Matt Comyn (CEO)
* Craig James (CommSec Chief Economist)

Former notable people|

See Former executive leadership of the Commonwealth Bank

Related|

Bank of Hangzhou

* v
* t
* e

Kohlberg Kravis Roberts

Founders|

* Jerome Kohlberg Jr.
* Henry Kravis
* George R. Roberts

Investments|

* Bharti Enterprises
* Café Coffee Day
* Capsugel
* Laureate Education
* Nielsen Holdings
* ProSiebenSat.1 Media
* Sealy Corporation
* Seven West Media
* TDC A/S
* Toys "R" Us
* Visma

Subsidiaries|

| Food|

* Arnott's Group
* Borden Dairy
* Del Monte Foods
* Dollar General
* Flora Food Group
* US Foods
* Wild

|

Electronics|

* Alludo
* BMC Software
* DZS
* Leonine Holding
* Northgate Public Services
* OverDrive
* Trainline
* Yageo

Financial|

* CICC
* Colonial First State (55%)
* First Data

Health & retail|

* Academy Sports + Outdoors
* America's Best Contacts & Eyeglasses
* Hospital Corporation of America
* Oasis Shopping Centre (60%)
* Pets at Home

Industrial manufacture|

* Colonial Pipeline
* Energy Future Holdings
* KION Group
* Legrand
* Marelli Holdings
* Marelli Europe
* Maxeda
* NXP Semiconductors
* Oriental Brewery

Infastructure|

* John Laing Group

Simon & Schuster|

* Aladdin
* Atheneum
* Atria Publishing Group
* Scribner
* Gallery Publishing Group
* Pimsleur
* 37 INK
* Howard
* Pocket
* Threshold
* Free Press
* Veen Bosch & Keuning
* Van Dale

Former|

* Aricent
* Borden
* El Paso Corp
* Legg Mason
* RJR Nabisco

Related|

* Kohlberg & Company
* Barbarians at the Gate (film)

* Category

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