Mercer has added Nikko and Smart to an Australasian equities strategy previously run with Harbour as the single underlying manager.
In a note last week, Mercer says following a review “it has been decided to replace the underlying investment portfolio for the Fund with the Mercer Socially Responsible Trans-Tasman Portfolio”.
“This MITNZ Portfolio invests in socially responsible Trans-Tasman shares using a multi-manager approach.”
The change will “remove single manager risk” for the fund, Mercer says, while the maximum exposure to Australian shares will increase to 25 per cent from the existing limit of 15 per cent.
Under the revised model, Harbour and Nikko will run active portions of the portfolio with Smart managing the remainder passive-style.
“Combining Nikko’s core/intrinsic value approach with Harbour’s growth strategy will increase Fund diversification and help streamline the investment management process,” the note says.
“A combined Trans-Tasman shares investment portfolio will also be more efficient to operate and will allow economies of scale to be achieved going forward.”
But the now $34 million fund will also see an increase in annual administration charges from the current 0.15 per cent to 0.19 per cent post transition: the investment management fee remains at 0.75 per cent.
“However, without the change, the estimated administration charges would need to be revised up to 0.24% for the coming year,” Mercer says in the note. “This is due to the decline in the size of the fund and reduced opportunity for economies of scale.”
Mercer took over the strategy formerly known as the Ethical Leaders NZ Shares Fund early in 2023 after assuming control of the Macquarie NZ retail product suite that the Australian firm had, in turn, bought from AMP Capital 12 months prior.
Several of the Mercer-run funds are still co-branded with Macquarie including some potentially affected as the Australian asset manager sells out of its mainstream investment business in North America and Europe.
In an agreement inked last month, the Japanese financial behemoth, Nomura, will pay A$2.8 billion in cash for the Macquarie “North American and European focused public investments business comprising equities, fixed income and multi-asset strategies, with approximately $A285 billion of AUM”, according to a release at the time.
The deal is expected to close by the end of 2025.
A Mercer NZ spokesperson said: “We understand that there will be minimal impact to local investors [from the Nomura purchase] as there is very little expected change to investment strategies.
“Our global research team has long-term relationships with both Macquarie Asset Management and Nomura. We have increased monitoring of relevant strategies as the transaction progresses.”
In particular, the Mercer-Macquarie Global Listed Property and Global Listed Infrastructure funds would likely be renamed once the sale finalises.