The recently-reformulated S&P/NZX index business could face renewed competition in New Zealand with FTSE Russell understood to be making a play for disgruntled local fund managers.
Recently-hired FTSE head of Australasia Justin Walsh, was in New Zealand last week on client visits with potential fund manager demand for a rival local index on the agenda, industry sources told Investment News NZ (IN NZ).
In February this year, the NZX struck a deal with global index firm S&P Dow Jones Indices (S&P), to outsource production of local market benchmarks.
As well as seeing some technical changes in how the NZX market indices were calculated, the S&P agreement also resulted in steep price increases for clients who license the data.
In particular, some local fund managers baulked at the price hikes that sources said could rise from the previous annual fee of about $1,500 to as much as $17,000.
Managers use the index data for benchmarking, performance attribution and client-reporting purposes.
While the NZX/S&P has a stranglehold on the local index business, Russell Investments previously offered a bespoke market benchmark in New Zealand.
Last year the London Stock Exchange (LSE) bought the global Frank Russell business, subsequently folding the Russell index unit into its own FTSE arm – rebranding the merged operation as FTSE Russell in May this year.
Alister van der Maas, head of Russell Investments NZ, said FTSE now has responsibility for the NZ index.
FTSE was not available for comment.