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Susan Edmunds
Susan Edmunds
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Milford suspension appropriate: NZSF

Friday 1st of May 2015

Last month, Milford had a $281 million mandate New Zealand active equity mandate suspended while it is investigated for alleged market manipulation.

NZ Super Fund has been managing the funds internally since.

Spokeswoman Catherine Etheredge said the investment management agreement would remain in place with Milford. “We continue to monitor the situation and update our view of the manager and underlying investment opportunity over time. The manager does not receive fees during the suspension. We like to have the flexibility to dial our investment mandates up and down, while keeping the contractual arrangements and relationship ‘infrastructure’ in place. This means we can respond quickly to changing circumstances, such as a deterioration in a underlying investment opportunity.”

She said suspensions were agreed on after considering what the Guardians of New Zealand Superannuation thought of the manager, the investment opportunity, how the opportunity should be accessed and the flexibility of the contract.

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Paul Flood: The danger is that the 'goalposts' (regarding what is acceptable or unacceptable adviser conduct) may be susceptible to change. Our 'Principles based' legal/regulatory environment lends itself to “prevalence-induced concept change” over time, perhaps not so much in the written laws and Code, as in the interpretation of the prescribed principles.
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Just a tip, if you use more than six, six letter words in a sentence you lose most Kiwi's. So avoid client/adviser confusion when writing your post or article if you would like it read and understood. Ironically, my last sentence was not likely read.
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FMA outlines its latest expectations for advisers
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