AMP will have to find a new home for over $760 million held on behalf of KiwiSaver and superannuation scheme members by the end of August after ANZ scrapped its wholesale business last week.
ANZ is the most popular among the four third-party managers contracted under wholesale terms to offer funds to AMP super and KiwiSaver clients.
The bank-owned investment manager has accrued more than $760 million through the AMP relationship across both the KiwiSaver scheme and the employer-based NZ Retirement Trust (NZRT), ranking as the largest ANZ wholesale client.
But the shock ANZ move to close its wholesale arm creates a dilemma for AMP, which must find similar investment solutions for the affected members.
“As AMP Wealth Management NZ is the licensed [managed investment scheme] MIS manager, we have the responsibility to appoint the appropriate investment managers for the funds offered in our schemes, in accordance with the trust deeds,” Aaron Klee, AMP general manager investment management and services, said in a statement.
“AMP will work through what this means in the next few weeks for customers invested in the funds currently managed by ANZ to ensure the right outcome for our customers.”
The AMP mandate represents perhaps up to a quarter of the ANZ wholesale book of well over $3 billion.
Dozens of super schemes, charities, iwi and other wholesale investors will also be scrambling over the next four months to find suitable replacements ahead of the targeted ANZ wholesale closure deadline of August 31.
In a statement last week, ANZ funds management head, Fiona Mackenzie said: “We believe these investors will be best served by a fund manager that is dedicated to supporting Wholesale customers and we’ll work closely with each of our Wholesale clients to ensure the transition is as smooth as possible.”
After discarding the wholesale money ANZ will remain the largest retail funds manager in NZ with over $30 billion management including $20 billion across its three KiwiSaver schemes.
“Our focus is on investment to enhance and grow our funds management business and delivering better outcomes for New Zealanders,” Mackenzie said.
ANZ engaged with both Mercer and BlackRock last year to explore ways to revamp the bank’s investment offering that has historically relied on a large in-house team for local assets and relationships with several offshore managers including MFS, Vontobel, Resolution Capital, Franklin Templeton, LSV, Northern Trust and Maple-Brown Abbott.
BlackRock is the main underlying manager for the AMP NZ funds that totaled about $12.3 billion at the end of March, comprising about $6.6 billion in the KiwiSaver scheme, $3.4 billion in the NZRT and the remainder in other retail products.
Aside from ANZ, the AMP schemes also offer funds from Mercer, Milford and SuperLife – the group closed off access to a couple of Nikko products earlier this year.