Salt Funds Management could have more deals in the pipeline after scooping up $690 million of AMP Capital NZ’s leftovers in what was one of, if not the, largest New Zealand equities mandate on record.
Following the deal, Salt, spun out of BT Funds Management NZ in 2013, will have funds under management of about $1.4 billion.
Paul Harrison, Salt director, said the AMP mandate provided scale for the firm, whose only other client is former employer, BT Westpac.
“This provides further credibility for us,” he said.
Harrison said Salt still had capacity for further NZ equities mandates with a couple of potential wholesale deals lined up already.
He said with capital growth and new listings the NZ stock market is “30-40 per cent bigger” than when Salt launched, implying capacity constraints have loosened.
“There’s plenty of headroom,” Harrison said.
Salt would certainly be interested in the $260 million ex-AMP local equities New Zealand Superannuation Fund mandate, he said.
However, the AMP deal is quite a coup for Salt, which was one of the pre-match favourites to secure the mandate.
Harrison said the terms of the AMP mandate are “reasonably broad” with Salt already taking a similar “core manager” investment style as the team it replaces.
He also said Westpac/BT – Salt’s foundation client and AMP KiwiSaver competitor – had okayed the new arrangement.
Westpac/BT has outsourced some of its NZ equities management to Harbour (as has AMP).
AMP Capital had been searching for a replacement NZ shares manager after sacking its in-house local shares team, headed by Guy Eliffe, last December.
The moved followed months of staff instability at the marquee funds management house with senior money managers John Phipps, Douglas Lau and John Middleton exiting AMP Capital over the last year or so.
Just before dissolving its in-house NZ equities team, AMP managed about $1 billion in local shares.
However, in November 2014 AMP lost a $260 million local equities New Zealand Superannuation Fund (NZS) mandate, prompting the group to review its operations.
As at February year, AMP Capital reported collective funds under management of about $690 million in its three main NZ equity products: the NZ Shares Fund; the Strategic NZ Shares Fund, and; the Responsible Investment Leaders NZ Shares Fund.
While it is understood AMP lost a handful of other NZ equity mandates during the upheaval, Harrison said Salt would pick up the full $690 million by March 31 – the date set for transition earlier this year.
In the interim AMP Capital’s Australian equities operation, headed by Michael Price, has been managing the New Zealand shares portfolio.
