Mercer NZ has joined the double-digit billionaire fund manager club after scoring $1 billion in mandates during 2021 to date.
In a release last week, Mercer says it pushed through the $10 billion threshold as rising client demand coupled with bull markets saw the multi-manager’s funds under management (FUM) soar by 60 per cent over the last three years.
Ronan McCabe, Mercer NZ chief investment officer, said investors of all stripes were seeking more diversified strategies in efforts to bolster returns and protect against inflation amid increasing uncertainty.
“Investors – including institutional asset owners, iwi and foundation clients, family offices and retail members – are coming to us for greater support in navigating the challenges of a difficult economic outlook. They’re looking for expertise in implementing their investment strategies, with a keen interest in our suite of equity funds, socially responsible global equities in particular,” McCabe said.
“We’ve also seen growing demand for single sector funds, with clients seeking dedicated allocations to sectors like emerging markets and listed infrastructure, in addition to global equities. Our private markets capabilities is also attracting investors, including Private Debt where we recently won a mandate in New Zealand to invest in our Global Private Debt fund.”
He said institutional and retail investors were also demanding portfolios that reflect environmental, social and governance (ESG) standards.
According to McCabe, ESG is now a “primary focus” for many NZ investors as “they seek to align their portfolios with their values, while still securing sustainable returns”.
Mercer recently expanded an enhanced responsible investment strategy across all its KiwiSaver portfolios after first implementing the approach to default fund late last year.
In April the year, the manager said in a release that the ESG change goes “beyond exclusions to positively include a greater impact investing approach across Mercer’s KiwiSaver funds, working with managers to invest actively in industries that generate positive and measurable social and environmental impacts”.
However, Mercer failed to gain reappointment as a default provider in the May decision by government and stands to lose a portion of its KiwiSaver FUM in December.
But Mercer, which is still skewed to the institutional market, joins just a handful of NZ managers with more than $10 billion in FUM including ANZ Investments, ASB and AMP Capital, Fisher Funds and Milford Asset Management.
According to the Reserve Bank of NZ (RBNZ), as at the end of March this year, the local funds management sector (covering institutional and retail but excluding government-owned funds) hit almost $240 billion.
Currently based in Sydney (pending a move across the ditch), McCabe, was named Mercer NZ CIO in January this year, cementing the role he held in an interim capacity since last September. He also retains the Mercer Pacific head of portfolio management job.
McCabe should not be confused with the other Ronan Mc Cabe in the Mercer group, who serves as a relationship manager with the firm in Atlanta, USA.