Mercer has landed a $200 million mandate with AMP as a balanced fund option on the group’s KiwiSaver and NZ Retirement Trust (NZRT) platforms.
Under the deal, due to take effect on June 25, Mercer will replace Fisher Funds in the AMP line-up that also includes ANZ, ASB and Nikko as well as a range of in-house options (managed by AMP Capital).
According to an AMP spokesperson, the product swap came after a regular review of the underlying KiwiSaver and NZRT offerings highlighted recent ownership and portfolio management staff changes at Fisher Funds.
Last year Fisher Funds sold down its remaining 51 per cent of staff-held shares to long-standing joint venture partner TSB (via the TSB Community Trust) and US private equity firm TA Associates. TA also is a part-owner of Russell Investments.
The AMP spokesperson said the NZRT (a $4 billion plus master trust vehicle comprising both traditional employer super clients and individual investors – including UK pension transfers) and the $5 billion or so KiwiSaver schemes offer access to 27 underlying funds.
Fisher has sourced about $160 million through the NZRT and $40 million in the AMP KiwiSaver scheme, the latest disclosure documents show.
“We regularly assess the fund managers offered within these schemes and following the most recent review in respect of changes at Fisher Funds, we have appointed Mercer as a new underlying fund manager within KiwiSaver and NZRT,” the spokesperson said. “The Mercer Balanced Fund will replace the Fisher Balanced Fund, with assets being transferred from 25 June. We believe adding Mercer gives our members access to a manager with global scale and a strong track record in creating diversified portfolios, and complements the range of investment options available through AMP.”
Like AMP, Mercer is also a default KiwiSaver provider – with about $1.8 billion under management – and serves as underlying manager to the NZ Defence Force KiwiSaver scheme.
Mercer, through its consulting arm, also acts as investment adviser to AMP both in NZ and Australia.
However, the AMP spokesperson said the group would not be using Mercer to assess the Mercer balanced fund in the NZRT and KiwiSaver schemes.
“We’re currently determining the best approach, but at this stage it’s likely that an independent assessment of the fund will be based on several factors, including ratings data from Morningstar and other external insights alongside input from AMP’s in-house investment specialists, for consideration by AMP’s Investment Committee,” the spokesperson said.
Frank Jasper, Fisher Funds chief investment officer, said while the AMP decision was “disappointing” the $7 billion plus manager remained committed to the institutional market.
“We continue to have a focused offer to the wholesale market,” Jasper said.
Fisher, which manages over $4 billion across its two KiwiSaver schemes, is predominately a retail firm but retains some institutional clients including the former Tower life insurance business (now owned by Fidelity). The Auckland-based manager also offers property and global bond funds (managed by Wellington and PIMCO) to wholesale investors in NZ.