Russell Investments has won the consulting gig for the A$260 million of sovereign funds owned by the tiny Pacific archipelago of Tuvalu.
Despite its ranking as the smallest GDP (about US$40 million) in the world, the Pacific nation – a group of nine atolls and reef islands – has built up a comparatively large pot of investment money held mainly in the Tuvalu Trust Fund.
The government has also established the Consolidated Investment Fund, the Tuvalu Survival Fund and the Falekaupule Trust Fund to “meet specific investment goals”, Russell says in a release.
Matt Arnold, Russell NZ director institutional, said in the statement: “We will bring the global capabilities of Russell Investments to serve these funds which are of vital importance to the ongoing development of Tuvalu and to current and future generations of Tuvaluans.’
Russell has been involved in the Pacific for some time, most notably as investment consultant for the almost NZ$200 million Cook Islands National Superannuation Fund.
Guy Fisher, Russell NZ senior consultant (and point man for the Cook Island fund), said in the release that the firm was pleased to be taking on the Tuvalu investment responsibilities.
Fisher said Russell would “ensure the funds build on their long record of success and continue to be managed in a way that serves the interests of the people of Tuvalu”.
Previously, the Auckland-headquartered consulting firm, EriksensGlobal, was investment adviser to the Tuvalu funds. According to the latest published annual report (2017), the Tuvalu Trust Fund split its assets equally between the AMP Capital Extended Multi-Asset Fund and the Schroders Real Return Fund.
Only 200 metres across at its widest point, the Pacific state comprising nine small atolls and reef islands derives most of its income from selling fishing rights as well as generating a substantial economic boost from its internet domain handle of .tv – reportedly worth up to 10 per cent of the government’s annual revenue.
Tuvalu – population about 12,000 – is also at the pointy end of climate change with rising oceans threatening to swamp the low-lying region (averaging about 3 metres above sea level) within the next 50 to 100 years, according to some scenarios.
Dotted with various government funds, the Pacific Islands has emerged as a competitive space for NZ and Australian-based investment advisers.
Over the last couple of years, for example, the NZX-owned SuperLife has won two mandates from a restructured Nauru investment vehicle and the Tongan Retirement Fund, respectively.
The Pacific Provident Fund and Social Security Forum – a collective of regional government investment vehicles – lists 18 members, a figure that includes the NZ Superannuation Fund and the Ngati Awa group.
