The Auckland Future Fund (AFF) has hired Mapua Wealth as an independent investment adviser as the $1.3 billion council-owned vehicle rolls out a new search for underlying managers.
In a statement, AFF chair, Christopher Swasbrook, said the embryonic perpetual fund has contracted Mapua – formerly known as MyFiduciary – for one year while it allocates the $1.3 billion raised from the sale of the city council’s remaining Auckland Airport shares to external managers.
At the same time, Swasbrook said the AFF board would publish a new request-for-proposal (RFP) document for prospective investment managers after the original Auckland Council-authored tender from last year closed with no contract awarded.
“The council-initiated RFP was retired last year,” he said. “The Auckland Future Fund board will be initiating its own investment manager RFP this month, but it has not yet been submitted. Any other appointments will commence after the investment manager is appointed.”
In the interim, most of the AFF assets have been parked in term deposits spread across “multiple banks” to fund the inaugural annual distribution to the Auckland Council.
“A small portion of the funds have been placed in an on-call bank account,” Swasbrook said. “All bank accounts and term deposits are held by the Auckland Future Fund, rather than Auckland Council.”
The Elevation Capital founder and Financial Markets Authority (FMA) director was named to the AFF board last year along with current FMA chair, Craig Stobo, and Public Trust general manager corporate trustee services, David Callanan.
Under the arrangement, the AFF board has signed a fund administration services agreement with the council “to provide company support and also uses Auckland Council’s Group Shared Services”, Swasbrook said.
However, the AFF itself would not have any staff.
The perpetual was a key policy of Auckland mayor, Wayne Brown, with an aim to deliver long-term returns higher than the airport share parcel via a diversified portfolio: the ouncil budgeted for annualised AFF returns of 7.24 per cent.
Brown said in a release last year: “The fund is a way for us to deliver greater physical and financial resilience for Auckland, protect the value of council’s intergenerational assets and enhance cash returns.”
From the 2025/26 financial year, the AFF is forecast to distribution $40 million annually to the Auckland Council.
Over time the AFF could be topped up with further capital.
Last year the Wellington City Council scuppered a plan to establish a similar fund from a proposed sale of its local airport shares. But Napier City Council laid the groundwork for a diversified fund last year after transferring its airport shares and other property assets into a new entity – Ahuriri Investment Management – that is due to begin operations this July.