The Netherlands-headquartered investment performance attribution firm, Ortec Finance, has completed the NZ double after landing the Accident Compensation Corporation (ACC) fund as a client.
In a deal confirmed late in June, the ACC will use the Ortec PEARL platform to evaluate investment attribution across the $44 billion fund, joining the same-sized NZ Superannuation Fund (NZS) as the group’s second NZ client.
NZS adopted the PEARL system about seven years ago, marking the first client win for Ortec in the Asia-Pacific region.
More recently, the specialist firm secured two of the largest ‘asset owner’ clients across the Tasman with both the government-owned Future Fund and AustralianSuper on the PEARL platform, according to Stefano Lee, Ortec Pacific managing director.
The Future Fund and AustralianSuper currently manage about A$170 billion apiece.
“We now have the two largest players in NZ and the biggest Australian sovereign and superannuation funds as clients,” Lee said. “And we’re close to finalising a deal with another Australian super fund.”
Established in Rotterdam in 1981 (and rebooted under its current structure in 2007 following a management buyout), Ortec only opened its first Australian office in Melbourne this January.
Lee, who spent eight years with rival financial software firm FactSet, said the region held significant growth potential for Ortec.
He said Ortec was one of the few providers that analysed performance attribution from an asset owner point of view.
“Most other vendors created investment performance attribution for fund managers with a bottom-up view of assets while ours was built with a top-down perspective,” Lee said.
Prior to signing with Ortec, the ACC fund calculated performance attribution measures all in-house.
In a statement, Jonathan Williams, ACC investment risks manager, said:
“We undertook a comprehensive RFP process to select the right solution for our investment process which resulted in us selecting Ortec Finance’s PEARL. The ease of use, quality of analytics and capabilities of PEARL made Ortec Finance the obvious partner for ACC.
“PEARL will improve the quality and transparency of our performance reporting, adding greater ability to analyse the performance and risk of our investment decisions.”
It is understood, Ortec was competing with the usual range of investment attribution firms including FactSet for the ACC prize.
The ACC fund, which is heavily weighted to fixed income assets, has outperformed its home-built ‘composite’ investment benchmarks for all but two of the last 24 years. Over the financial year ending June 30, 2019, the fund recorded one of those rare benchmark misses despite returning $3.5 billion above budget in nominal terms.
And after over 25 years of stability at the top, the ACC chief investment officer, Nicholas Bagnall, resigned late last year to establish a new wholesale boutique fund business, Te Ahumairangi Investment Management (TAIM). However, in a 12-month exclusive deal, TAIM’s first mandate is running an approximately $1.6 billion global equities portfolio for the ACC fund. TAIM should formally take over the ACC global shares portfolio next month.
The ACC portfolio is also facing a shake-up under new climate change and ‘carbon intensity’ targets announced last month.
Lee said Ortec also offers carbon and climate-related portfolio analysis tools.
The firm provides performance attribution services in over 20 jurisdictions to more than 500 clients who collectively manage about NZ$5.2 trillion.