The $150 million Rotorua Energy Charitable Trust (RECT) is beginning the transition from in-house investment management to a Mercer implemented consulting solution this month.
Grahame Hall, RECT chairman, said the decision to swap its in-house funds management for a Mercer offering was “difficult … but definitely the right one”.
“We wanted a wider spread of people [managing the funds] with greater global experience,” Hall said.
Following the official handover date of April 1, Mercer will assume full control of the Trust’s diversified portfolio, which has been managed in-house for 20 years under a wholly-owned subsidiary Perpetual Capital Management (PCM).
Hall said PCM has invested in a wide range of assets including direct equities, fixed income instruments, property, private equity funds and hedge funds. According to the RECT 2014 annual report, the fund also boasts a $2.3 million art portfolio.
PCM, chief investment officer Peter Halligan and analyst Aaron Gabbie, have been made redundant, however, the Trust has offered an alternative role to one of them.
Sole remaining PCM board member, Falcon Clouston, will exit once PCM winds up. PCM chair, Sandy Maier, plus fellow board members, John Dell and Martin Goldfinch, resigned last December.
Coincidentally, Maier resigned as independent director of Taranaki Investment Management Limited (TIML) last October. TIML, a New Plymouth District Council-owned entity. TIML and its investment vehicle, the Perpetual Investment Fund (PIF), have come under pressure recently to sell down its 100 per cent interest in Tasmanian dairy farming company – Tasman Farms.
Tasman Farms constitutes about 70 per cent of the PIF.
In its June financial report, TIML said a “full or partial sale of Tasman Farms” would be needed to meet the target portfolio. As at June 2014 PIF also reported zero allocation to Australian and NZ equities but planned to include these asset classes over the following 12 months.
The fund uses exchange-traded funds (ETFs) to invest in other global equities.
Former Development West Coast chief, Michael Trousselot, heads TIML.