Milford Asset Management has pushed aside Westpac/BT to claim third spot in the NZ retail fund charts at the end of September after another bumper quarter.
Mark Ryland, Milford chief, said the trans-Tasman firm reported more than $16.5 billion under management as at the end of September – most of that NZ-sourced retail money.
Figures from Australian research house, Zenith Investment Partners, put Milford hit net quarterly inflows of almost $1.3 billion over the three months to September 30, reprising a similar result in the June quarter.
The Melbourne-based researcher Plan for Life (PFL) shows Milford total funds under management grew about $1.8 billion during the three months to June 30 in a confluence of flows and strong performance.
According to PFL data, Milford FUM expanded by almost 60 per cent over the 12 months to June 30 from $8.5 billion to reach a total of close to $13.3 billion.
Just six years ago, and amid a brewing regulatory crisis, the Auckland-headquartered manager held about $3 billion.
But Ryland said the extraordinary growth of the business in recent years was a “20-year overnight success story”.
Milford was founded in 2003 by a group of local investment luminaries including Brian Gaynor before launching as full retail fund house four years later at the birth of the portfolio investment entity (PIE) era.
The manager tacked on a KiwiSaver scheme in 2010 that is now the eighth-largest in the market.
While consistently strong investment performance was important in sustaining growth, Ryland said Milford had also invested heavily in client service capabilities – both in technology and human resources.
The business has well over 100 employees including 35 investment specialists (spread across NZ and Australia), more than 30 financial advisers as well as a large client services team.
Over the last few years Milford has also upgraded its back- and front-end technology to create a smooth client engagement experience, he said, including a robo-advice service.
For example, the manager rolled out a new retail investment version of its earlier KiwiSaver digital advice system a couple of weeks ago that has already seen over 2,000 users log-in.
“We’re also going to add new smart investor tools such as behavioural finance solutions,” Ryland said.
The focus on omni-channel client engagement has paid-off, he said, with more than 5,000 KiwiSaver clients clocking-in to view the recent Milford webinars that aired between 7-8 pm.
“We got hundreds of questions – too many to answer,” Ryland said.
Along with the rapid asset growth, Milford has had to diversify its investment mix, morphing from an Australasian equities house to a multi-asset manager.
“About 30 per cent of the portfolio is now in global equities,” Ryland said – now all managed in-house by an international shares team of eight.
If Milford today now out-does all but two Australian bank-owned NZ fund managers in the retail market, the group’s foray across the Tasman has been a tougher slog.
Since establishing an Australian fund business late in 2017 the manager has accrued about $50 million in products domiciled there.
(Milford had much earlier opened a Sydney office for portfolio management purposes, supporting the NZ-based products.)
Ryland said while Australia was a “very different market” from NZ, Milford had done much of the necessary “foundational” work, building up relationships with financial advisers, research houses and investors.
“There’s a long incubation period in Australia,” he said.
Nonetheless, Milford had invested further in Australian distribution, recently hiring industry veteran, Kristine Brooks, to lead the charge.
The firm also plans to release six more Australian unit trusts this year, Ryland said, and will list three on the ASX next year.
And in addition to courting Australian financial advisers, he said Milford expected further growth in the direct retail market across the ditch.
“About a third of our Australian funds under management has come from direct investors,” Ryland said. “We’re keen to roll out our technology portal there.”