Arcus runs portfolios of balanced funds for a number of clients including Spicers Portfolio Management, New Zealand Financial Planning, and AXA Wealth Management.
Under this arrangement Milford will be one of the underlying managers it uses. The company also uses Brook Asset Management, which was formed by former Arcus people, and AXA-owned Alliance Capital for New Zealand shares.
Arcus chief investment officer Mark Brighouse says the three managers allow them to blend various styles. Brook is a value-based manager, Alliance has a growth bias and Milford is a total return manager.
Milford will be initially used in Spicers’ portfolios. New Zealand Financial Planning has decided not to use them at this stage.
“Our investment committee made the decision not to include Milford in our portfolios at this stage,” NZFP general manager Craig Dealey says. “It was felt that there was little value to be had in including another manager in an investment pool that already has limited scale.”
“That is not to say that we will not include Milford at a later date. The inclusion or exclusion of managers is under regular review, and the matter will be up for discussion at future committee meetings. “
Milford was established two years ago by a group of senior industry executives. The former head of Salomon Smith Barney, Neville Todd, heads up the group, which includes Graeme Thomas, who was the head of advisory services at ANZ Private Bank, and high-profile commentator Brian Gaynor.
Originally it was set up to offer asset management services to high net worth individuals and charitable trusts, however it is expanding its services and products.
Milford was to be the manager of the Colville Equities listed investment trust, however that vehicle failed to get off the ground. Since then it has developed its business and now has $150 million under management.
Thomas says Milford is moving into funds management and will soon be launching a New Zealand share fund. He says the new fund won’t be a reincarnation of Colville.
As for the Arcus deal he describes it as an “outstanding move forward for us.”
“You couldn’t get a better start to the New Year.”
Brighouse says this decision is a result of their belief in the importance of in-depth research in selecting New Zealand equities, given the challenges now facing many New Zealand companies.
The portfolio will be a concentrated selection of the best local equity investments that Milford identifies.
"We need to utilise the best investment ideas from a wide range of sources. Arcus’ clients, some of the largest financial planning networks in New Zealand, are strong believers in the active management of investment portfolios and will have access to the Milford process when building portfolios,” Brighouse says.
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