Russell Investments has struck a deal with a local partner in New Zealand to launch a new range of funds targeting both institutional and retail clients.
According to Sasha Mandich, Russell NZ head of investor services, the group has inked a partnership agreement with Implemented Investment Solutions (IIS) – a firm run by former AMP Capital NZ head of sales, Anthony Edmonds – to create a number of products structured as portfolio investment entities (PIE).
Under the arrangement IIS will act as the issuer and promoter of the PIE products, to be known as the Russell Investment Funds, while Russell will supply investment management and advice services.
The New Zealand PIE regime, launched in 2007, allows investors to be taxed at their own marginal rate rather than at the fund level.
Mandich said Russell would release its existing global fund-of-funds – currently sold to New Zealand institutional clients – under PIE structures but was also planning to launch a new domestic multi-manager PIE accessing local fund managers.
“We want to offer domestic investment solutions to local clients,” he said.
As well as meeting demand from some institutional clients for PIE funds, Mandich said the Russell Investment Funds would also be marketed to retail clients via investment platforms and financial advisory firms, a sector Russell NZ has struggled to break into.
According to Mandich, Russell currently manages about $1.7 billion of New Zealand money, most of it sourced from institutional clients with a tiny retail contribution chiefly from its Aon-administered KiwiSaver funds.
“We’re excited about the opportunities to grow our client base,” he said.
Edmonds said there was a strong gap in the market for a New Zealand-centric investment business.
“We see ourselves as a boutique New Zealand business,” he said. “All the key client decisions will be made here in New Zealand and that’s an important point of difference.”
Andrew Brockway, former AMP Capital NZ head of business solutions, has also joined IIS.
Edmonds said IIS would outsource fund administration and unit pricing duties to an independent supplier.
Mandich said the first Russell Investment Funds were scheduled for a June release.