Auckland-headquartered investment firm Generate is to double its risk-weighted KiwiSaver fund suite to allow members to adopt more fine-tuned strategies in the coming 12 months.
Generate chief, Henry Tongue, told the group’s online KiwiSaver conference last week that the $3 billion plus manager would launch three new funds to fill the risk gaps between the current conservative, growth and focused growth strategies.
Tongue said Generate would add to the range of both the KiwiSaver and retail trust products (the latter currently limited to the more aggressive ‘focused growth’) to facilitate more flexible member investment choices.
Under the planned product roll-out, the KiwiSaver scheme would offer defensive, moderate and balanced funds to complement the existing three strategies.
The move would enable first home-buyer Generate KiwiSaver members, for example, to dial-down risk via the defensive fund in anticipation of a house purchase.
Meanwhile, Tongue said the manager would bring on conservative and balanced funds to build out the retail unit trust range where the current single product holds about $20 million.
Since launch in 2014, the Generate KiwiSaver scheme has grown rapidly to reach almost 100,000 members and $2.7 billion under management as at the end of March this year.
The firm has built a loyal distribution base among third-party financial advisers numbering over 1,000, Tongue told the conference last week.
“We see advisers as both customers and business partners,” he said.
But given the increasingly competitive landscape, Tongue said Generate was committed to investing further in its investment capabilities as well as adviser tools and support services.
“Just about all of our free cash-flow is invested in making improvements to the business,” he said.
Over the last 12 months, Generate has doubled the size of its investment team with further appointments to come, portfolio manager Sam Goldwater told the conference digital delegates.
On an investment panel that discussed – among other topics – responsible investing, active-v-passive, private equity and cryptocurrencies, Goldwater said Generate had been able to lower fees of late by bringing more asset management in-house.
While Generate is a one of the higher-fee KiwiSaver providers, he said the scheme does not charge performance fees that can skew investment costs significantly higher in some years.
Over 240 advisers tuned-in to the Generate conference, Tongue said.