Charity-focused fund shop, Trust Management, is readying to compete more widely as an ethical investment specialist after inking an outsourcing deal with FundRock NZ last week.
Under the arrangement due to take effect on July 1, the $1.7 billion Trust will hand over licensing duties to the fund-host while also shifting the remainder of its current in-house administration to the FundRock sister company in the Apex NZ group.
Matthew Goldsack, Trust general manager investments, said the moves bring administrative efficiencies as well as the ability to “size-up the business”.
“It will help us become a true competitive force in the ethical investment market,” Goldsack said.
For instance, he said the group would now more easily be able to create new products to meet client demand.
In April the manager appointed Nuveen to a global ‘green bond’ mandate, replacing BlackRock, with the intention to distribute the fund beyond the existing Trust client-base.
Trust, which currently runs six portfolio investment entity (PIE) funds, would eventually relinquish its own retail fund licence after completing formalities with the regulator.
Goldsack said Trust would operate as an underlying wholesale investment manager under the FundRock legal framework.
Other upgrades such as unit-pricing frequency (currently monthly) and an investor portal would bring the manager into line as a “modern fund business”, he said, after outsourcing all previously in-house-managed admin functions to Apex.
Trust already used Apex for registry and custody but post-transition the third-party administrator would take over both unit-pricing and fund-accounting.
Guardian Trust is the supervisor.
While the fund-hosting and administration switch comes with some upfront expenses, Goldsack said the “benefits outweigh any costs”.
“And there’s no fee impact on existing clients,” he said.
“The feedback from clients has been overwhelmingly positive.”
Total Trust annual fund charges range from 0.4 per cent for the new Nuveen-run global bond strategy to 0.86 per cent for the property product.
FundRock (formerly known as Implemented Investment Solutions) now fronts more than 25 managers with collective assets of over $10 billion.
The Trust deal also marks the first local investment manager client for FundRock: the Wellington-based operation has to date served as a PIE-wrapper for global managers (mostly Australian).
However, in 2019 the fund-host packaged some PIEs for advisory network, Hobson Wealth. Following the sale of Hobson to Forsyth Barr at the end of 2023, the FundRock PIEs were wound-up last July.