NZ Super fund awards 35th mandate

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The New Zealand Superannuation Fund has appointed AXA Rosenberg to manage a global equity market neutral strategy mandate.

Thursday, November 9th 2006, 6:47AM

Excess returns (above cash) from the strategy are designed to come entirely from AXA Rosenberg's stock selection skills rather than equity market movements. In an equity market neutral strategy, the manager holds both long positions and short positions.

For a manager that has some predictive skill for stocks expected to decline in value, this allows the best expression of their stock selection skill. The fund will also obtain market exposure, so as to match its target strategic asset allocation. This market exposure will be obtained synthetically, and is independent of the AXA Rosenberg mandate.

The global market neutral strategy allows for efficient access to AXA Rosenberg's stock selection and risk management skills.

They have already established market neutral strategies covering Europe, US and Japan. The global strategy essentially combines the three regional strategies.

"In funding this mandate the fund is continuing its pattern of funding efficient strategies in managers in whom the fund has high conviction. AXA Rosenberg already manages a conventional long-only EAFE equity mandate for us," NZ Super Fund acting chief executive Paul Dyer said.

The appointment of AXA Rosenberg brings the total number of external investment mandates to 35. The value of the fund at 30 September was $10.8 billion.

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