Colonial First State Global Asset Management float inches forward

The Commonwealth Bank could be inching forward on a Colonial First State Global Asset Management float, with meetings held in the past week with major fund managers overseas.

The bank, Australia’s largest by market capitalisation, flagged in September that CFSGAM was officially on the block, ending months of speculation.

A review is being carried out of CFSGAM to evaluate whether a float or trade sale of the business would be the best option for CBA.

CBA’s decision to offload CFSGAM followed the quick sale of its CommInsure business to AIA, and the expectation was that the CFSGAM transaction could also be speedy.

However, the process had started to quieten down in the lead-up to the end of the year.

DataRoom understands that CFSGAM executives were in London last week and then travelled to New York for meetings with fund managers.

There was speculation yesterday the briefings could have been a warm-up act for the start of more official meetings in a deal roadshow next year.

CFSGAM has $219 billion worth of assets under its control and a float next year is expected to be a highlight for the domestic capital markets.

One aspect that CBA is expected to use to its advantage is its strong retail shareholder support base, and the expectation is that a retail offer anywhere between $1bn and $1.5bn would be part of any IPO.

CFSGAM’s funds management income for the 2017 financial year was $837 million, slightly down from the previous year, and any float is expected to involve a selldown of half of the business or less.

Some bankers believed CBA would not float CFSGAM until the second half of 2018, but the overseas meetings last week could bring that timetable forward.

CBA was also expected to have appointed joint lead managers before now to oversee the float. There is some expectation that CBA will hold off doing that until the last minute.

Meanwhile, it is understood that Macquarie has been bought on board to help Transurban raise up to $2 billion capital possibly next week.

The transport operator is awaiting approval from the Victorian government to develop the West Gate Tunnel, which would require a major capital raising.

Morgan Stanley and UBS had been on the deal but DataRoom understands that Macquarie has also been brought in to help.

The capital raising could be $2bn and the prospect of a deal of that value has prompted major competition among the banks for a slice of the action.