Harbour Asset Management has won a $180 million fixed income mandate replacing AMP Capital in a range of Westpac-distributed funds.
According to the respective prospectuses for the BT Private Selection and Westpac Active Series funds, Harbour was due to replace AMP Capital as NZ fixed income manager for the products within six months of the documents’ September publication.
Matthew Goldsack, BT Funds head of investment solutions, said the Harbour handover was completed in September.
Goldsack said the change reflected the Westpac/BT preference to work with boutique managers in NZ that “offer sustainable long term business models”.
“Our sub manager relationships with [NZ equity managers] Devon, Salt and Harbour are examples of this,” he said.
Goldsack said with fixed income markets required a “nimble and dynamic approach” as the sector headed into a challenging period driven by “divergence in monetary policy globally and increased volatility”.
“Regarding Harbour, we consider their fixed interest offering one of the most capable in New Zealand with a strong team and deep experience in capital markets,” he said.
Christian Hawkesby, Harbour head of fixed income, said the Westpac/BT mandate evolved out of a long-standing relationship.
“[Westpac/BT] got to know Harbour through the equity mandate,” Hawkesby said. “Over time that has built trust while Westpac developed an understanding of our fixed income investment process.”
He said Harbour was engaged in “two or three other conversations in that spirit”.
The Westpac win helped Harbour lift its NZ fixed funds under management from $400 million at the start of 2015 to the current $665 million. As at the end of November AMP Capital reported about $9.2 billion in its fixed income and cash funds.
As well as big-ticket institutional interest, Hawkesby said Harbour had also seen strong retail growth for its fixed income funds.
“There’s a growing use of funds by financial advisers – partly for regulatory reasons but also access to fixed income assets,” he said. “There’s a recognition [post the finance company collapses], too, that fixed income is an asset class you want to be able to rely on in times of stress.”
Excluding its $3.5 billion KiwiSaver scheme, Westpac/BT manages more than $1.5 billion in its range of funds. The Harbour mandate does not apply to the Westpac KiwiSaver scheme where NZ fixed income is managed in-house.