A new Australian firm is contemplating a move into New Zealand to plug the gap left by the exit of FundSource from the retail funds qualitative research market.
It is understood mfund Research, founded by former Lonsec research manager, Darren Howlin, is in talks with local fund managers to supply qualitative reports in New Zealand.
As part of the move, mfund could potentially provide the NZX-owned FundSource with the qualitative research it recently cut from its own offering.
Industry sources told Investment New NZ (IN NZ) mfund Research was in talks with the NZX regarding its qualitative research options.
In its release announcing FundSource’s new partnership with UK financial data and analytics firm Financial Express (FE), the NZX said following the deal, which kicks in at the end of this month, it would “no longer provide qualitative research in-house via FundSource”.
While that might leave the door open for FundSource to outsource qualitative fund research, neither Howlin nor the departing NZX head of product, Sam Stanley, could confirm a deal was on the table.
However, FundSource’s abdication from qualitative research has highlighted the dearth of such analysis in New Zealand’s retail funds market. Only Australian-based firm Morningstar now carries out qualitative research on NZ funds managers for retail investors and financial advisers.
In the spate of a few years, two other Australian research houses – Lonsec and van Eyk – have come and gone from the New Zealand market. Both firms crossed the Tasman expecting the post 2008 regulation of the NZ financial advisory industry would generate demand for independent research that, hitherto, has failed to materialise.
Despite bailing out of the NZ retail fund research business, Lonsec is sticking with its KiwiSaver analysis (based on the model of associated Australian firm SuperRatings), publishing its first report this February.
Howlin, who was originally driving the KiwiSaver initiative, left Lonsec last year following a management clean-out. His mfund Research firm intends to offer “affordable access” to a range of financial product research.
According to the mfund website, the company “does not provide an overall rating”.
“In a post financial crisis and ever changing environment, the relationships between products and the reliability of an overall rating has been broken.”