FTSE Russell, the London Stock Exchange-owned (LSE) index business, has canned the New Zealand shares benchmark it inherited following the purchase of the Frank Russell Company in 2014.
The demise of the Russell New Zealand Domestic Index leaves the S&P/NZX as the sole provider of local equities benchmarks for NZ fund managers.
It is understood FTSE Russell attempted to spark interest among NZ managers in its local shares index last year in the wake of the NZX shift to, more expensive, S&P-managed indices.
Research house Morningstar has also floated the idea of creating “commodity” priced indexes to New Zealand earlier this year.
But while the NZX faced considerable manager backlash to the pricier S&P indices most of the local funds industry has since transitioned to the new benchmarks – helped along, according to some sources, by discounting on the part of the stock exchange operator.
Only a handful of NZ funds – including, of course, Russell Investments, and Harbour Asset Management – used the Russell NZ shares index. The affected funds are in the midst of back-office tinkering to align their processes with the S&P/NZX local equities index.
Meanwhile, Russell Investments has published its new corporate ownership structure on the NZ Companies Office website. The LSE spun-off Russell Investments (keeping the index business) last October in a US$1.15 billion sale to two US private equity firms – TA Associates and Reverence Capital Partners.
The Companies Office lists Russell Investments UK Midco as the sole shareholder of the NZ business, naming the ultimate holding company as Emerald Acquisitions.
Emerald Acquisitions was established last October with directors listed as TA Associates executives, Todd Crockett and Roger Kafker, along with Reverence managing partner, Milton Berlinski, and Russell Investments chief, Len Brennan.
Following the confirmation of the purchase earlier this month, Russell Investments said senior staff would invest in the company along with the new private equity owners.