The NZX-owned SuperLife has landed another Pacific Island client after winning a new mandate from the NZ$100 million plus Tongan Retirement Fund.
Under the just-inked agreement, SuperLife will manage the Tongan government employee pension fund money via purpose-built active multi-manager investment vehicles.
The win follows a similar deal late last year where SuperLife picked up the gig to run a rebooted Nauru retirement savings scheme.
SuperLife has appointed the Auckland-based Castle Point Funds Management, Schroders Australia and T Rowe Price as underlying managers for the Tonga fund.
Specifically, SuperLife invests via the Castle Point 5 Oceans fund, the Schroders Australian equities fund and T Rowe Price global shares growth fund. The 5 Oceans fund is itself a multi-manager with allocations to global equities fund, Acadian; AMP Capital’s Short Duration; the Kohinoor Pacific Fund – run by former NZ-based alternative investment firm, 36 South (now headquartered in London); and, Castle Point’s own Ranger Fund.
SuperLife set up new structures for the actively-managed funds including NZ dollar-denominated multi-asset class and US dollar-linked Australian and US equities wrappers.
Last December the NZX fund subsidiary established an Australian currency-based investment vehicle to house the Nauru money. The Nauru scheme now boasts more than 3,000 members.
The Tongan pa-anga (TOP) is pegged to a basket of US, Australian, NZ and Japanese currencies.
According to the latest annual report, the Tongan retirement fund holds about TOP160 million (or NZ$104 million) investment mainly in bank deposits and local fixed income instruments.
“The Fund Board has identified the investment environment challenges in the short term and intends to carry out a strategic and gradual diversification plan into domestic equity and offshore investments in the coming financial year 2018/2019,” the Tongan retirement fund report says.
Both the Nauru and Tongan funds fall under the SuperLife ‘Pacific Series’ banner, that include two foreign investor portfolio investment entity (PIE) structures providing tax efficiencies for offshore clients.
SuperLife is known primarily as an index fund manager – including through the NZX-owned Smartshares exchange-traded fund (ETF) – but has exposure to some active strategies including through PIMCO, Nikko and Dimensional Fund Advisors.
Hugh Stevens, NZX head of funds management, said very few Financial Market Conduct-regulated products are denominated in foreign currencies.
“We’ve had to be innovative,” Stevens said.
He said other Pacific Island investors have shown interest in the new SuperLife products with some – aside from the Tongan scheme – due to invest in the funds “from day one”.
“We remain committed to building and growing our presence in the Pacific and will continue to develop product and services where these are consistent with our strategy,” Stevens said.
The Auckland-headquartered EriksensGlobal provides investment advice to both the Tongan and Nauru funds through its Pacific arm.