It will take more than a brewing social media storm to unseat Fisher Investments from its NZ mandate, according to Booster principal, David Beattie.
Booster now has roughly $140 million invested with the embattled US manager after seeding the active global equities strategy with about $40 million in 2017.
As reported here, Fisher Investments founder, Ken Fisher, sparked a ‘me too’ moment last month after delivering a sexually-explicit analogy at a supposedly private industry talk-fest.
Breaking with tradition at the event, several attendees went public with their concerns about Fisher’s comments, triggering the state of Michigan to almost immediately cut a US$600 million mandate with the long-established manager. In the weeks since, Fisher has lost an estimated US$3 billion as various institutional investors – mainly US public sector funds – followed the Michigan lead, according to a Reuters report.
Fisher manages over US$100 billion.
Last week Reuters reported that global investment consultant, Mercer, told clients it had put Fisher on watch in the wake of the “remarks that critics have said were sexist”.
“Mercer did not suggest clients terminate the firm as rival pension adviser NEPC has done, however,” the Reuters report says.
But in a note to clients, Mercer reclassified its rating on Fisher as ‘provisional’ – or a short-term concern, according to Reuters.
The report quoted the Mercer client note as advising: “We remain mindful that concerns regarding potential AUM [assets under management] loss and staff turnover may take time to play out.”
While Fisher is on the firm’s recommended list, local investors have no exposure to the manager, a spokesperson for Mercer NZ said.
However, Beattie said Booster was “not inclined to follow the kneejerk reaction” of offshore investors by dropping Fisher on the basis of his reported comments.
“Fisher has supplied us with lots of further information that put [Ken Fisher’s] comments in broader context than has been reported,” he said. “While he may have been taken out of context, clearly, in today’s world people have to be more selective in how they express their views.”
Booster would consider the issue at its next full investment committee meeting, Beattie said.
The $3 billion plus Wellington-based investment house has upped its exposure to Fisher since seeding the strategy both through regular fund flows and a higher asset allocation.
Booster has active international share investments with Fisher, Rothschild and Magellan combined with a passive allocation managed by Vanguard.
Beattie said over the last couple of years, Booster had shifted the global equities weighting slightly away from Vanguard to the active strategies.
Booster holds its annual conference this Friday in Wellington.