Why Is Clime Bringing Back John Abernethy to Lead Investments Now?

Leadership Realignment to Strengthen Investment Philosophy

Clime Investment Management Limited has announced a significant operational change with the return of John Abernethy to a direct, hands-on role as Director of Investments. Abernethy, a veteran with over 40 years in the Australian financial markets, had stepped back from operational duties in 2018. His return is seen as a strategic move to realign the company’s investment approach with his proven philosophy, which has historically challenged market consensus and delivered sought-after insights.

Managing Director Michael Baragwanath emphasised that embedding Abernethy’s methodology across portfolio construction and client engagement is critical for Clime’s next growth phase. Alongside Chief Investment Officer Leo Economides, Abernethy’s operational involvement aims to enhance decision-making and investment outcomes.

Strategic Divestments and Fund Closures Impact FUM

During the December quarter, Clime sold a portion of its retail financial advice business, comprising $99 million of advised funds under management (FUM), generating an expected book profit exceeding $1 million. This divestment aligns with the company’s strategy to focus on high-net-worth clients and differentiated product offerings.

However, the quarter also saw the closure of two funds; the Clime Australian Income Fund and the Clime Smaller Companies Fund; following regulatory challenges linked to adverse media coverage involving ASIC statements. Although the article triggering the controversy was withdrawn, the fallout led to a 7.2% decline in total FUM and funds under advice (FUA), reflecting the return of significant capital to investors.

Improved Fund Performance and Financial Outlook

Despite these disruptions, Clime’s core investment vehicles have demonstrated tangible improvement. Clime Capital Limited notably outperformed its benchmark, resulting in the company provisioning a performance fee for the first half of fiscal 2026. The fund’s strategy, which includes a distinctive blend of listed and unlisted credit instruments, has delivered high yield and differentiated returns compared to traditional equity portfolios.

Looking ahead, Clime expects to report an interim profit after amortisation, a marked turnaround from the prior year’s loss. The company is progressing its product roadmap and operational transformation, aiming to simplify its business model and enhance long-term value creation for shareholders and clients alike.

Navigating Regulatory Challenges and Market Positioning

The regulatory and reputational impact from the ASIC-related media episode remains a cautionary backdrop. Yet, Clime’s decisive actions to wind up affected funds in investors’ best interests and return capital swiftly have mitigated direct investment losses. The company’s focus now is on rebuilding momentum through improved leadership alignment and portfolio management.

With a strengthened leadership team and a clear strategic focus, Clime is positioning itself to deliver consistent client outcomes and capitalise on its unique investment insights. The next six months will be critical as the company implements its refined product strategy and continues to navigate the evolving regulatory landscape.