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FILE PHOTO: People are seen at a booth of Vanguard Group at a fair during the INCLUSION fintech conference in Shanghai, China September 24, 2020. REUTERS/Cheng Leng

SYDNEY (Reuters) – Vanguard Group Inc said on Wednesday it will close most of its business managing money for institutional investors and large pension funds in Australia and New Zealand, and focus on serving retail clients.

The U.S. investments giant, which has roughly A$164 billion ($118 billion) in assets under management in Australia, will stop offering customised products called segregated mandated accounts (SMA) to large institutional investors.

The exit comes as Australia’s pension funds, which make up the world’s third-largest pool of pension assets, have moved towards managing a larger portion of their investments internally to lower costs. This has intensified competition for investment mandates and forced the closures of several funds.

The Pennsylvania-headquartered manager will continue to offer some investment products that

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