The Future Fund Management Agency (FFMA) has put out an RFP for a custodian and hopes to appoint funds managers by the end of the year now it has secured the services of NZ Superannuation Fund chief Paul Costello as its general manager.
“If we’re lucky we might be able to achieve manager appointments by year-end,” Rob Barnes, FFMA interim head, said. The FFMA will now begin the process of appointing a chief investment officer. “The process is complex because we look broadly in the first instance. It’s a process that has to abide by the Commonwealth regulations,” Barnes said. The fund was seeded with $18 billion on May 5, 2006 and is scheduled to receive an additional $8 billion from the proceeds of the Telstra sale. It is expected that Costello will be heavily involved with the appointment of the CIO, and the custodian and asset consultants, although his departure date from the NZ Super Fund has not yet been finalised. Asset consultants have until today to submit their proposals and custodians until September 8, 2006. “Obviously we want the maximum amount of input from the people who are going to deal with the asset consultants/custodians,” Barnes said. “We have to develop an investment policy and investment strategy and then we’ll work towards portfolio allocation…It’s a process that has to be undertaken with great care. It’s a bit different to a normal fund.” Barnes said the FFMA was currently determining exactly what type of custodial services the fund would require. “The base services of custodians are pretty uniform but there is a capacity in terms of value-add and that’s what were looking at,” he said. The remainder of the Government’s share in Telstra will be transferred to the Future Fund which will be subject to an escrow period of approximately 24 months after which the fund will be free to sell down its shareholding as it sees fit. Barnes did not expect there to be any specific custodial issues relating to the large parcel of Telstra stocks that the fund would be required to hold.
The brunt of losses from the LA wildfires are expected to be borne by primary insurers and high-risk reinsurance programs, but super funds are nevertheless closely monitoring the possible impact of the fires on catastrophe bond and insurance-linked securities exposures.
Simon HoyleJanuary 17, 2025
