NEW ZEALAND - The NZ$5.75bn (e3.2bn) New Zealand Supernnuation Fund has awarded Vanguard Investments Australia a global listed property securities mandate.
The brief has an initial allocation of NZ$100m and represents the fund’s first commitment to property.
The fund said Vanguard would manage the mandate on a passive basis, with the UBS Global Real Estate Investors Index – in New Zealand dollars – as the benchmark. The index represents about 200 companies with revenue predominantly driven by property rental income.
Paul Costello, New Zealand Supernnuation Fund chief executive, said property was an important part of the fund’s long term investment strategy.
“Looking ahead, we will turn our attention to unlisted property, both within New Zealand and overseas and to further considering the role of active management in the listed market.”
The fund recently announced plans to increase its allocation to alternative assets and property to 20% by June 2007, and eventually to 35%. The change, announced as part of the new strategic asset allocation, will be achieved by reducing the fund’s allocation to global listed equities.
Vanguard already manages an international government bond mandate on behalf of the fund.
Commenting on the appointment, Vanguard’s chief investment officer Eric Smith, said: “We are delighted to have been chosen to manage additional assets for the New Zealand Superannuation Fund. Global property securities are a rapidly evolving asset class attracting a lot of attention from investors in the region.”
The New Zealand Supernnuation Fund was set up to smooth the impact on government finances of funding the superannuation payments of an ageing population. The cost of providing benefits is expected to double over the next 50 years. The government is allocating around NZ$2.2bn a year to the fund over the next 20 years.
Mark Evans has been appointed as a director at Independent Trustee Services (ITS) to lead trustee appointments in London.
The Pension Protection Fund (PPF) is consulting on changes to the actuarial assumptions it uses in valuations in a bid to better reflect the bulk annuity market, with schemes set to move into surplus on aggregate.
Private sector defined benefit (DB) schemes were 96.3% funded on a Pension Protection Fund (PPF) compensation basis at the end of July, according to the lifeboat fund's monthly index.
Conduent has completed the sale of its actuarial and human resource consulting business to private equity investor, H.I.G. Capital.