The New Zealand Government Superannuation Fund (GSF) has dumped plans to use an implemented consulting approach for its $2 billion international equities component, following a Chant West review.
Last year the GSF hired Sydney-based Chant West to investigate implemented consulting solutions for the $2 billion which it was about to transition from passive to active management. Alan Langford, GSF chief executive, said while it was a “line-ball decision” the fund opted to appoint managers directly rather than select an implemented consultant. Langford said the costs of keeping the international equities management in-house were about the same as outsourcing to an implemented consultant. “We’ve given implemented consulting serious thought,” he said. Following tax changes in New Zealand last year that removed favourable treatment for passive equity investment strategies, the GSF decided to move approximately NZ$2 billion to active managers. Previously, the passive international equities mandate was split between AMP and Axa. From October 1 last year the GSF has been gradually transitioning the international equities to a number of managers – seven global share managers have already been appointed with at least one more expected to be named soon. The seven managers appointed so far are: Altrinsic Global Advisers; Arrowstreet; Barclays Global Investors Australia (enhanced index); Marathon; PanAgora Asset Management; State Street Global Advisors (enhanced index); and, T Rowe Price. “We had about 12-15 RFPs out there during the process,” Langford said. He also said the GSF has reappointed JP Morgan as custodian after a review conducted by Mercer Sentinel last year. The $4 billion GSF is a defined benefit fund which partially funds New Zealand’s public sector retirement liabilities.
There is one investment area where Insignia’s $180 billion super arm has not lost money for the past 17 years, which is what it calls the insurance-related investments. The alternatives strategy is gaining popularity among asset owners due to its diversification benefit, but Insignia’s super and asset management investment chief Dan Farmer warns it is a space where investors can suffer if they “stumble in without doing the homework”.
Darcy SongJanuary 23, 2025
