The $200 million plus Community Trust of Southland (CTOS) has dumped its long-time investment consultant.
Industry sources told Investment News NZ (IN NZ) that CTOS hired Aon Hewitt as its new investment adviser, replacing MCA, the Michael Chamberlain-headed consultancy firm that had filled the role for more than a decade.
The move represents a rare change of guard in the community trust world where investment advisory relationships tend to be tightly-held.
John Prendergast, CTOS chief, was unavailable for comment prior to IN NZ deadline.
However, Guy Fisher, Aon investment consultant, confirmed the group would assume the CTOS advisory duties as at April this year.
“We are really pleased to be awarded this mandate. It was a very competitive and thorough selection process and we see the trustees’ decision to appoint Aon Hewitt as an endorsement of our capabilities and our commitment to this sector,” Fisher said.
“We are looking forward to working with the trustees to ensure that the Trust’s investment assets are best managed for the long-term benefit of the Southland community.”
As at March 31 last year, CTOS reported total net assets of $201 million, the bulk of which was invested in managed funds. According to the latest accounts, the community trust invests via six underlying managers, covering: a roughly $100 million Australasian and global shares mandate with Auckland-based Elevation Capital; an almost $50 million NZ fixed/unlisted unit trust investment via Nikko Asset Management, and; just over $40 million in global bonds with PIMCO.
CTOS also reported investments of $910,000 in private equity, managed by Direct Capital, a $720,000 Australasian equities mandate with Pioneer Capital, and a minor cash holding with First NZ Capital.
While CTOS implemented a manager change in 2014 – axing equity managers AMP Capital, Capital International and Franklin Templeton as Elevation and Pioneer were appointed – the hiring of a new consultant typically heralds a review of underlying managers.
Aon’s appointment marks its first consultancy gig in the approximately $3 billion community trust space. MCA also acts as investment consultant for the $160 million Eastern and Central Community Trust and the $52 million Mid & South Canterbury Community Trust.
Other investment advisers currently employed by one or more of the 12 community trusts include Russell, Melville Jessup Weaver, Craigs Investment Partners, Jana, Mercer, and Cambridge Associates.
