Just two months after its official launch the Hunter Global Fixed Interest Fund has shot through the $400 million mark, more than doubling its debut target.
Tony Hildyard, Hunter chief, said the NZ-domiciled fund – a PIMCO-managed global fixed income product structured as a portfolio investment entity (PIE) – was on track for $465 million under management by the end of May after hitting $400 million last week.
In February Hildyard, previously PIMCO representative in NZ, told Investment News NZ (IN NZ) the Hunter global fixed income fund needed at least $200 million at launch to be viable.
“We have had just about 100 per cent success rate in terms of the clients we have talked to,” he said. “People love that we are providing them access to PIMCO’s core global fixed interest offering, as a PIE.”
Hildyard said the fund, open to both retail and wholesale clients, had clearly hit a nerve with a range of investors including KiwiSaver schemes, superannuation funds, community trusts and charities.
“It’s pleasing to see retail investors have also invested in the fund [available on the InvestNow platform],” he said. “We’re keen to engage further with financial advisers, too, on how the fund may fit their client needs.”
While the Hunter fund closely tracks the PIMCO flagship global fixed income strategy, the NZ version screens out a number of controversial sectors such as cluster munitions manufacturers and tobacco firms.
“PIMCO modeling showed that these exclusions, which we’ve followed to comply with NZ law and based on client demand, would not have any meaningful impact on returns,” Hildyard said.
According to the Disclose website, the Hunter product reported funds under management of about $175 million as at March 31 with a total fee of 0.63 per cent.
Wellington firm Implemented Investment Solutions (IIS) provides the legal and tax structure around the Hunter product under a fund-hosting agreement.
As fund-host, IIS is the licensed manager and issuer of the Hunter fund, with Public Trust serving as supervisor and BNP Paribas supplying custody.
IIS managing director, Anthony Edmonds, said the rapid growth of the Hunter fund set a new benchmark for the NZ market.
“In all my years in the NZ industry, I have never seen a fund grow this fast,” Edmond said.
He said investors were attracted by having access to the world’s largest fixed income manager via a NZ-regulated and tax-effective PIE wrapper.
“They also like the fact that Tony will be working with them on the ground in NZ,” Edmonds said.
Prior to launching Hunter, Hildyard spent about eight years representing PIMCO in the NZ institutional market before a 2015 restructure at the Australian arm of the global fixed income giant.
In 2007 he resigned as head of Tower Investments after an almost 20-year career with the firm. At Tower, Hildyard also oversaw the group’s PIMCO funds, which now reside in the same form under the Fisher brand.
As well as Fisher Funds, ANZ also offers a version of PIMCO to the NZ institutional market.
It is understood most of the Hunter investors transferred from existing PIMCO allocations with a smattering of new money also joining the flow.
Hildyard told IN NZ in February Hunter hoped to ultimately roll out a suite of other global products aimed primarily at the institutional market.
“We are continuing to weigh up whether we launch additional funds,” he said. “For now my focus is on continuing to grow Hunter.”