Milford Asset Management has yet to formally launch a search for a new CEO following the surprise exit of incumbent Troy Swann last December.
But whoever eventually fills Swann’s shoes would be charged with maintaining Milford’s “organic growth” model rather than embarking on a shopping spree or prepping the now $6.3 billion boutique for an IPO, according to chair, Mark Cross.
“We have no plans to list or grow by acquisition,” Cross said. “At this stage we are focused on continuing our organic growth. There’s opportunities for us in NZ – around KiwiSaver, for example – and also in Australia.”
Swann, who joined Milford in October 2016 after a 15-year career at various National Australia Bank wealth entities, abruptly left the Auckland firm just before Christmas.
Cross said Swann’s return to his native Australia, announced at the bottom of an end-of-year newsletter, was “unfortunate” but down to family reasons not performance issues.
“You never know what family circumstances might come up,” he said. “It’s a shame he leaves some unfinished business but we have the succession planning and talent in place to manage.”
Milford head of product and operations, Mark Ryland, has stepped in as interim CEO – and will be a likely candidate for the permanent role. Ryland was also appointed to the Milford board late in December last year.
During his two-year tenure Swann had overseen a number of behind-the-scenes renovations including an internal organisational restructure and a revamp of Milford’s IT capability, Cross said.
Last year Milford completed the transition of its registry system from Trustees Executors to MMC, which underpinned a digital client services revamp.
“Previously, Milford was probably behind the 8-ball with our online client-facing services – now I’d say we’re one of the leaders,” he said. “Financial services clients now expect the kind of on-demand experience they get from firms like Uber. Clients expect to be able to access their financial information when and how they want to.”
However, the shiny new IT platform and corporate gloss accumulated during Swann’s watch has not obscured the core Milford investment proposition.
And any prospective new chief would have to bear that in mind, Cross said.
“We are looking for some with strong leadership skills,” he said. “But we also want someone who appreciates the Milford investment culture – they will have to enhance and grow the business without undermining our traditional cultural strengths.”
Milford has had a charmed life since debuting the first of its funds in 2007: the manager has topped performance charts across many risk profiles including with its now $1 billion plus KiwiSaver scheme.
Indeed, even a high-profile run-in with the regulator in 2015 – that ultimately saw it cop a $1.5 million fine and former portfolio manager, Mark Warminger, found to have contravened market manipulation laws – hardly deflected Milford’s growth trajectory. Just after the Financial Markets Authority action Milford reported about $3.6 billion under management with the group piling on almost $3 billion in the ensuing three years.
Cross said while there was still some growth potential in NZ, Milford was looking to Australia for its next leg up. Milford has maintained a Sydney office for years but late in 2017 it established an Australian-domiciled product modeled on the firm’s flagship Active Growth Fund.
Last year Milford also appointed Regan van Berlo (an ex-pat Kiwi working for Morningstar Australia) to spearhead its distribution push among financial advisory groups across the Tasman.
“We want to grow in Australia,” Cross said. “We’ve done it in a patient way to date. But we now have a strong team there [including overall Milford chief investment officer, Wayne Gentle] and we will look to open up the business further soon.”
He said there is, though, one Australian trend that Milford won’t emulate with a listing – à la Magellan or Platinum – off the agenda.
“There are a few listed fund managers in Australia,” Cross said. “But it’s really tricky when you are a listed manager because you get competitors crawling through your business, accounts and staff…
“The only reason to list is if you need capital or liquidity.”