The Boutique Advisers Alliance (BAA) is reaching the scale required to negotiate sharper deals with service providers across the fund value chain, according to Nick Stewart, chair of the group’s investment committee.
Stewart, who heads up the Hastings-based advisory firm Stewart Group, said with $350 million of “committed funds”, BAA, which aggregates investments and other services on behalf of four member firms, aimed to develop institutional-level clout with suppliers.
He said the scale benefits that would be passed down to member firms and clients.
The four BAA member firms – five including the Wellington-based Red Wealth purchased by Stewart Group earlier this month – are typically devotees of the US passive ‘factor investment’ giant, Dimensional Fund Advisors.
Stewart said the current $350 million in BAA funds includes the approximately $40 million managed by Red Wealth as well as $45 million invested in the ‘Asset Class’ KiwiSaver funds (managed by Dimensional), launched by the Stewart Group under the auspices of the Fidelity (now Grosvenor) scheme.
According to the BAA website, the group offers advisers model portfolio solutions (as discretionary investment management services or otherwise), compliance support and “discounted third-party rates”.
As at August 2015, the BAA reported funds under management of $235 million. Stewart told Investment News NZ at the time that the group was targeting about 20 member firms.
Last week, the Stewart Group also beefed up its investment committee, which advises the BAA portfolios, with the appointment of University of Auckland finance academic, Alastair Marsden.
In a statement, the Stewart Group said Marsden, associate professor of accounting and finance at the Auckland University Business School “teaches risk corporate finance and finance for start-up entities”.
“Alastair’s research interests are in corporate valuation, cost of capital, impact of regulation on financial markets and equity issues,” the statement says. “… [his] involvement provides independent scrutiny of the Stewart Group’s investment and allocation decisions.”
Marsden joins Stewart, Aaron Drew, Glen Trillo and Brad MacDonald on the investment committee.
Drew, former NZ Superannuation Fund head of macro strategy, took on the role of Stewart Group chief investment officer last December.