Mercer and Harbour will share an almost $450 million mandate from the local government superannuation and KiwiSaver schemes as part of the ANZ exodus from the wholesale market.
ANZ managed more than $366 million for the Supereasy KiwiSaver and a further $81 million for the related Local Government Superannuation Scheme as of March 31 this year in a broad mandate covering global assets as well as NZ fixed income and cash.
Under the post-ANZ arrangement, the local two government schemes have hired Mercer to look after global equities index-style (UK firm Legal & General serves as underlying manager) while Harbour takes on cash as well as NZ and international (via the Hunter/PIMCO fund) fixed income duties.
Harbour is the incumbent manager for Australasian equities and listed property in a combined portfolio valued at about $145 million across both the KiwiSaver and legacy super scheme at the end of the financial year.
The local government schemes adopt a passive investment style for equities and manage other asset classes “on an active basis”, according to disclosure documents.
In May this year ANZ gave notice it would quit wholesale investment services by the end of August this year, triggering a rush of clients looking for replacements.
ANZ “has a transitional role in managing underlying funds of the Schemes”, the local government schemes disclosure says.
“The funds managed by ANZI in which the Schemes previously invested were replaced from July 2024, with ANZI’s involvement limited to transitioning the Schemes’ assets across to replacement funds. That involvement is expected to be completed by 31 July 2024.”
Supereasy, now the largest restricted KiwiSaver scheme after MAS (previously, Medical Assurance Society) went full retail in 2021, reported over $480 million under management with a further $105 million in the legacy superannuation scheme as at March 31.
Melville Jessup Weaver acts as investment adviser to the schemes.
The local government money is likely the second-largest ANZ wholesale mandate behind the approximately $780 million managed inside the AMP KiwiSaver and employer superannuation master trust.
Supereasy, already one of the lowest-cost KiwiSaver providers on the market, recently knocked off 2 basis points of its base management fee that now stands at 0.33 per cent.
In a July update to members, Charlie Howe, Supereasy chief, says “we are a restricted scheme and it isn’t easy to measure our performance against some of the bigger retail KiwiSaver providers”.
“We keep reminding members that KiwiSaver is a long-term investment and our investment philosophy remains framed around a passive investment strategy.”
Almost 70 per cent of Supereasy money is invested through the ‘Automatic’ fund, a lifecycle-type option that regularly rebalances member asset allocation based on age.
Former AMP Capital NZ head, Grant Hassell, is the independent licensed investment trustee for the local government schemes.