The almost $1.5 billion Foundation North has put its investment adviser role up for review with incumbent Cambridge Associates set to face competitive bids later this year.
A Foundation North spokesperson confirmed the charitable fund had hired Fidato Advisory – headed by former Russell Investments NZ chief, Ed Schuck – to conduct the review.
However, the “final decision is for the trustees”, the spokesperson said.
“[The investment adviser review] is a regular part of the governance process and has been in our governance plan for some time,” the Foundation North spokesperson said.
Cambridge replaced Russell as Foundation North (then known as the ASB Community Trust) investment adviser in 2010.
Foundation North was an early consulting win in NZ for Cambridge, which has since acquired about 10 clients here including BayTrust in 2018 and a handful of iwi funds.
The Boston-headquartered global investment consultant is renown for its focus on alternative investments such as private equity and hedge funds.
As at the end of March last year, Foundation North had committed about $440 million to private equity or venture capital funds, including almost $310 million to US managers.
According to the Foundation North 2019 annual financial statements, the fund (worth some $1.3 billion at March 31 last year) returned 6.7 per cent after fees for the 12-month period against 5.3 per cent for a composite benchmark.
“As a long term investor however, the Foundation also considers long term performance and the five year performance was 7.8%, favourable to the five year benchmark of 7.2%…,” the financial report says.
During the year to March 31, 2019, Foundation North reported total expenses of almost $47.5 million, down $10 million on the previous year after slashing community grants by a similar amount.
Administration, ‘activity’ and investment management costs all rose year-on-year, the Foundation North figures show: fund management, custodian and investment advisory fees totaled close to $2 million over the 2019 fiscal year compared to $1.6 million in the previous annual period.
The Auckland community trust currently has over 30 employees, bumping up staff numbers over the last couple of years following an “organisational change”, the Foundation North 2019 annual report says.
During the last 12 months the charitable fund has also seen the departure of long-time CEO, Jennifer Gill – replaced by Peter Tynan last August – and a slew of new trustee appointments.
Foundation North grew funds under management to $1.44 billion by the end of last year, keeping asset allocation steady over the period, the spokesperson said.
The investment adviser review will conclude this year.
“We will use a closed [request for information] RFI process to develop a short-list and then move to an RFP [request for proposal] process,” the spokesperson said.
Foundation North is the largest charitable trust in NZ.