Treasury closed off bids last week for the plum role of grilling the NZ Superannuation Fund (NZS) in the fifth statutory review of the $62 billion plus entity.
In request for proposal (RFP) documents, Treasury says the successful candidate must meet the standard review requirements to assess the fund’s investment processes and performance against its governing law.
“The reviewer is also asked to complete a ‘deeper dive’ including a comprehensive assessment of the Guardians’ appropriate use of internal vs external management and respective governance, ethical and sustainable frameworks, along with an in-depth evaluation of how effectively the Guardians is optimizing its endowments and managing liquidity and risk,” Treasury says in the RFP.
And the underwater surveillance will include a preview of whether the NZS is set up properly to manage more direct control of companies in its portfolio once, or if, a new enabling legislation comes into force.
The New Zealand Superannuation and Retirement (Controlling Interests) Amendment Bill passed committee stage last August with a report backing the legal change empowering the fund to own companies outright.
According to the Treasury RFP, the winning bidder will have to “assess the [NZS] processes for managing controlled entities against what other sovereign wealth funds do in managing their controlled entities” as part of the review.
To date, government has spread the NZS reviews around different players, starting with EriksensGlobal in 2004 followed by Mercer (2009), Promontory Financial Group (2014) and Willis Towers Watson (now WTW) in the most recent report in 2019.
“The review provides the opportunity for a supplier to undertake a high-quality piece of work which, given the standing of the Fund, will gain considerable attention not just in the SWF community, but across the international Investment Management and Pension Fund landscape,” the RFP says.
“In addition, the Independent Performance Review provides the opportunity for the supplier to make a significant contribution to the continued success of the Guardians; helping the Fund meet its intended purpose – helping to contribute to the increasing cost of providing universal superannuation by making sustainable investments and delivering strong returns for all New Zealanders.”
The deadine for bids closed on November 2 with the result due by late January 2024 ahead of a February start date and a final report expected by July 1.