Milford has reported a $2.7 million drop in net profit in the latest financial year despite a 20 per cent rise in revenue to more than $73.6 million over the annual period.
Like fellow NZ boutique Pie Funds, which also posted a year-on-year profit fall on rising income, Milford has been in an expansionary mood of late, in particular with a serious tilt at the Australian market and a prime-time NZ advertising campaign for its KiwiSaver scheme.
According to the latest Milford Funds annual report published last week, the $7 billion plus manager pulled in management fees of almost $55.8 million ($43.8 million in 2018) and performance fees of $17.7 million ($17.3 million last year).
During the 2018/19 period overall expenses jumped almost a third from $50 million in the previous tax year to about $66.3 million.
Fund costs represent roughly $6.6 million of the firm’s expenses with $59 million (up from $42.8 million last year) paid as ‘management services fees’ to the operating entity, Milford Asset Management.
It is understood Milford now has close to 100 employees including a private wealth team of 26 and a similar number of investment specialists.
The funds management outfit has continued to attract retail money into its KiwiSaver scheme (now over $1.5 billion) and broader product range. According to the latest Melville Jessup Weaver (MJW) quarterly investment survey, Milford has also sustained performance with its KiwiSaver funds ranked number one over five years in the growth, balanced and conservative sectors.
Since establishing a base in Sydney some years ago, Milford now boasts an investment team of seven across the Tasman (including group CIO, Wayne Gentle) along with a recently-appointed head of distribution, Regan van Berlo.
In 2017 the firm launched an Australian-domiciled vehicle – the Milford Absolute Growth Fund – hoping to replicate the success enjoyed by its flagship Active Growth strategy back home. According to the latest update, the Milford Australian fund has garnered just under $100 million. Unlike NZ, where Milford has built primarily through direct investors, the group’s Australian distribution strategy hinges on independent financial advisory networks.
In March this year Milford co-founder and former chief, Brian Gaynor, stepped back from executive duties to focus on the firm’s private equity strategies. He remains on the Milford board, however.
At the same time, Milford confirmed Mark Ryland as CEO, replacing Troy Swann who departed the firm last December.
The Milford Funds entity (wholly-owned by Milford Asset Management) also paid a dividend of $10 million in 2019, the accounts show, up from nothing last year.
Milford Asset lists 41 shareholders with just one exit this year so far: former portfolio manager, Mark Warminger, sold down his stake this April.