The NZ Superannuation Fund (NZS) has dropped Devon as an external local shares manager, ending a 13-year relationship with the boutique.
In a statement this morning, NZS confirmed “it had terminated Devon Funds Management’s New Zealand active equities mandate”.
Market sources suggest the move reflected overall capacity issues across the entire NZS local shares portfolio.
As at the end of June, Devon managed just over $200 million for the now $80 billion plus fund in a NZ equities mandate, down from a high at one point of almost $400 million.
Following the change, only Mint Asset Management remains as a third-party local shares manager for the NZS. Mint managed almost $720 million for the sovereign wealth fund as at June 30.
However, NZS also runs a significant portfolio of perhaps $1 billion plus of NZX equities in-house in a mix of both passive and active styles.
The NZS internal actively managed local equities mandate ended under-index as a whole for the year, according to its 2024 annual report.
But the report says a further $150 million or so had been earmarked for allocation to the fund’s recently launched machine-learning local shares portfolio, Keorangi.
Keorangi “continued to outperform targets and has now grown to over NZ$100 million, with internal approval being granted in January to increase capacity to NZ$250 million”, the report says.
Since establishment in 2003, NZS has outsourced local share portfolios to several managers over time including AMP Capital, Fisher Funds and Milford Asset Management.
Devon has about $2 billion under management across wholesale and retail clients.