Plug for Kiwi fund managers
By ALAN WOOD - The Press | Monday, 18 February 2008
New Zealand's financial sector would be stronger if more superannuation savings went to fund managers based here rather than offshore, Christchurch's George Bayley says.
Kiwi fund administrators, custodians, brokers, research houses, lawyers and accountants would be immediate beneficiaries, he said.
The idea did not preclude the New Zealand-based fund managers investing in overseas shares or assets to keep a diverse portfolio for clients.
Rival Australia, for example, had more than $A1 trillion ($NZ1.15t) of assets under management in super funds, providing a sound capital base to Australian markets and thousands of jobs for Australians.
Bayley has set up a new business based around sourcing more funds for boutique fund managers so they can get to the $4 million-plus size that is probably necessary for survival.
TGN Fund Distributors was set up by Bayley to promote New Zealand-based fund managers to New Zealand investors and help keep fees they derive from management from flowing out of the country.
"A lot of it (seemingly) does stay here, but it gets shipped off to overseas managers ... there's so much going on people aren't aware of."
Bayley gets a retainer fee and other payments for his efforts to persuade superannuation managers to support his clients.
There was a trend for fund managers to move out from employment with a large bank or institution and set up on their own.
There were around 8000 small boutique funds globally, and a dozen or more in New Zealand, including his client, Socrates Fund Management -- run by Charles Drace.
The smaller operators found it hard to gain traction in terms of total funds under management.
"The industry will not grow domestically if there is not a pool of talented experienced fund managers, who are provided with the opportunity to establish their businesses here in New Zealand rather than migrating to, or remaining in the traditional global financial centres ... If New Zealand allocators are prepared to back these people and help them establish and grow their businesses in NZ there will be the flow-on effect of creating high-skill, high-value employment."
His role with TGN was to work with intermediaries like brokers, financial planners and influential groups such as Mercer to encourage allocation of superannuation funds to Kiwi boutique fund managers.
Bayley was born in the United Kingdom, and has recently moved to Christchurch from Wanaka -- where he was based with Logic Fund Management with which chief executive Gregory Marshall works with established funds around energy, water and carbon credit assets.
Drace said he agreed with Bayley's efforts to keep fund management within New Zealand.
"A lot of New Zealand-based fund managers have been sold overseas, or taken over by the banks."
Work on this needed to be done with financial planners and charities, who made the choice of a retail fund manager on behalf of clients.
Industry advisers such as Mercer, Russell and consulting actuary Melville Jessup Weaver were also influential in terms of where superannuation flows from groups such as the police or Fire Service were directed, he said.
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