Aaron Drew, head of the Auckland New Zealand Institute of Economic Research (NZIER) business, has joined the Hastings financial advisory firm, Stewart Group, as chief investment officer.
Drew, who will continue to act as an NZIER associate, takes up the newly-created position in January 2016 in a role that includes advising on Stewart Group’s $265 million plus portfolio.
While the Stewart Group – and a handful of associated firms operating under the Boutique Advisers’ Alliance (BAA) banner – invest primarily into passive-style funds offered by US-based Dimensional Funds Advisors (DFA), Drew said the CIO job would encompass a range of responsibilities.
“For example, I’ll be looking at ways to add value around portfolio rebalancing,” he said. “And I’ll be helping out those firms that use the Stewart Group systems with things like risk reporting and regulatory obligations…. there’s an internal market within the BAA for asset consulting.”
In 2014Drew joined the Stewart Group investment committee, which he now chairs.
As well, the Stewart Group set up and advises on the roughly $40 million Asset Class KiwiSaver funds (managed by DFA) previously housed under the Fidelity scheme but now resident with Grosvenor.
Drew said he would also look at building an institutional offering for the Stewart Group funds.
“I’d like to take the portfolio management up to the next level,” he said. “If we can scale it up further [the Stewart Group investment offering] can be quite competitive for institutions.”
Nick Stewart, Stewart Group direct, said getting someone of Drew’s stature on board was a major coup for the Hawke’s Bay firm.
“For both KiwiSaver and the BAA, this appointment adds a phenomenal depth of knowledge and mana to the engine of those two businesses. Advisers can have more confidence in the funds and service provided,” Stewart said.
Prior to joining NZIER in 2014, Drew spent over six years as head of macro strategy for the New Zealand Superannuation Fund. He also held various positions with the Reserve Bank of New Zealand and the Organisation for Economic Cooperation and Development as well as a consultancy gig with the International Monetary Fund.
In addition to his Stewart Group responsibilities, Drew said he would continue with some NZIER projects from a new home base in Hawke’s Bay, including the recently-launched asset consulting business and ‘NZ Investment Quarterly’ (NZIQ) newsletter.
The latest NZIQ, published early in December, suggests investors should increase allocations to growth assets.
“Higher medium-term risk-adjusted returns are expected for broad international equities exposures versus government bonds and we are relatively confident on this assessment,” the December NZIQ says. “…Another key asset allocation message of the NZIQ is to be prepared for much lower returns from broad market exposures than what has been enjoyed over recent years.”
Meanwhile, earlier this year the Stewart Group appointed Australian financial adviser, Peter Mancell, to its advisory board.
Nick Stewart, Stewart Group director, said Mancell’s role as head of Australian dealer group, FYG – which oversees 35 advisory firms – would be invaluable in New Zealand’s changing regulatory environment.
“The advent of DIMS [discretionary investment management service], which is the closest thing we have to the Australian dealer group model, starts to align the two jurisdictions,” Stewart said. “Thus working with an Australian veteran is most helpful.”
Mancell, along with Stewart, is also involved in the Australian and New Zealand Asset Class Investors Association. In 2014 he was invited to chair the Global Association of Independent Advisers.