BT Investment Management’s vision is to be the leading funds management business in Australia by delivering long-term outperformance for a variety of clients across a broad range of products. We aim to achieve this vision by attracting and retaining first class investment managers through profit share and equity participation, diversifying revenues through the addition of new boutiques and investment teams, strengthening relationships with clients, developing new specialised products in higher margin segments, and making further investments in efficient scalable operating systems and processes. These strategies are designed to drive superior returns for shareholders through growth in funds under management, diversified revenue, higher margins and increased operational scale.

Brian Scullin
Chairman

On behalf of the Board, I am pleased to present BT Investment Management’s inaugural Annual Report.

Our 2008 financial year has been a significant one. On 19 October 2007, the investment management business formally separated from Westpac and its operating division, BT Financial Group. This was followed by the listing process and our debut on the Australian Securities Exchange on 10 December 2007. Despite having these two significant milestones to achieve in a short space of time, the Board and management, with the support of Westpac, successfully transitioned the Company to a separate listed entity.

Since the listing, we have had to confront one of the most turbulent periods in the history of global debt and equity markets. As a funds manager, our performance is strongly linked to these markets and we have inevitably found conditions tough this year. However, with the agility of a boutique structure, the strength of the BT brand and the support of Westpac, we have fared relatively well. We have achieved a cash net profit after tax (NPAT) of $40 million, a 10% increase on 2007. This result is a reflection of the strength of our management and investment teams and of the underlying business.

The directors declared a final dividend for the year of 5.4 cents per share, taking our total dividend for the year to 8.9 cents per share. In the Prospectus, the Board expressed an intention of paying out 80% to 90% of cash NPAT earned from the date of listing, which would have required a capital return, and it maintains that view. However, given uncertain market conditions, the Board has decided not to recommend a capital return at this time. It will therefore not put this proposal to the forthcoming Annual General Meeting, but will keep this matter under review over the coming months and seek the necessary shareholder approval when it is prudent to do so.

Our newly formed Board has worked extremely well together to provide the right amount of active support to management during this first year. I believe the Board’s composition in terms of its size, experience and diversity of backgrounds is ideal. The Board is fully committed to moving the Company forward, supporting management and delivering on our growth strategy.

Corporate governance, sustainability and ethics are key areas of responsibility which we take very seriously. We understand that we are in the business of managing other people’s money and with that comes the duty to protect our investors. This responsibility is discharged by ensuring appropriate controls and risk processes are implemented and monitored.

We have also taken a leading role in relation to ethical and sustainability funds and in the disclosures by Australian listed corporations around environmental, social and governance matters, by being a shareholder with board representation in Regnan-Governance Research and Engagement Pty Limited.

There is no doubt that the 2009 financial year will again be a challenging year for us given the current climate. However, I believe BT Investment Management’s operating model is well advanced and provides a solid foundation for the next stage of our growth strategy.

Brian Scullin
Chairman

Brian Scullin