The number of licensed managed investment scheme (MIS) managers is crawling closer to 70 after a new firm joined the Financial Markets Authority (FMA) fray this March.
Dunedin-based Obsidian Group earned its MIS badge last month – freshening up the FMA list which has been static almost since the Financial Markets Conduct Act (FMC) regime kicked off in December 2016.
At the time the FMA reported 66 MIS licensees were complete with three in the offing. According to the FMA list, the addition of Obsidian brings the MIS count to 68.
However, Obsidian joins the 20 or so MIS managers constrained to specialised asset classes such as property or forestry.
“Obsidian’s non-standard licence condition [states] that its licensed service is restricted to being the licensed managed investment scheme manager for the Obsidian Contributory Mortgage Scheme, which invests primarily in loans over real property in New Zealand secured by registered mortgages,” the FMA says.
The group’s MIS licence also hangs on another ‘non-standard’ obligation to maintain “the same or better standard of capability, governance and compliance as was the case when the FMA assessed its application”.
Obsidian, which has yet to file scheme documents, is run out of the office of Dunedin legal firm Albert Alloo and Sons. Both Albert and Howard Alloo feature as Obsidian directors along with California-based Paul Jenkinson. The Alloo family hold a majority stake in Obsidian while Jenkinson owns a token 0.01 per cent of the company.
While specialist property, forestry and ‘other’ asset managers represent about a third of the MIS world, the subset more than makes up for it in product multiplication. The ‘other MIS’ sector has spawned over 280 schemes compared to 140 or so financial asset investment schemes (excluding the 86 workplace savings entities).
Prior to the introduction of the FMC, the FMA was expecting to licence more than 100 MIS managers. Liam Mason, FMA director of regulation, said in November 2016 the shortfall was due to some industry consolidation, several super schemes choosing to wind-up or amalgamate and “a small number have decided to go wholesale”.