Morrison & Co makes big move into wholesale world Investment News | Investment News NZ

Wellington-founded infrastructure investor, Morrison & Co, has claims as the most important privately owned NZ fund supervisor, rating at 402 on the 2023 Pondering Forward Institute (TAI) high 500 listing.

Morrison is the one NZ entry within the desk, though it will get the pavlova therapy with TAI labelling the supervisor as Australian.

Boasting about US$24 billion beneath administration (or NZ$46 billion), Morrison is effectively forward of the $33 billion plus ANZ Investments and near par with the Accident Compensation Company fund by asset dimension.

With about 200 workers scattered throughout numerous world areas, the supervisor employs virtually as many individuals because the NZ Superannuation Fund.

In some methods, nevertheless, Morrison nonetheless flies beneath the radar given its virtually unique give attention to the institutional investor market.

Retail buyers can get a style of the Morrison infrastructure type because the underlying supervisor of the NZX-listed Infratil however the agency has saved direct entry to funds purely on a separate account foundation for giant mandates.

Till now.

Final week Morrison opened its first unitised product with the launch of the Excessive Conviction Fund (HCF), providing wholesale buyers entry to the supervisor’s world listed infrastructure portfolio.

Tim Skerman, the Australia-based head of listed investments for Morrison, mentioned the fund marks a step into unfamiliar distribution territory for the group.

However Skerman mentioned suggestions up to now from an early cohort of wholesale buyers in NZ – the place the fund is being promoted first – has been optimistic with about $30 million within the kitty already (together with some workers cash).

He mentioned the primary question from buyers has centred on the distinction between the HCF and Infratil.

“Infratil is a listed automobile that invests primarily in unlisted infrastructure whereas the HCF is an unlisted fund that invests solely in world listed infrastructure shares,” Skerman mentioned.

Morrison established a worldwide listed fund construction greater than three years in the past earlier than the formal launch to make sure the product functioned effectively – reminiscent of managing the every day liquidity necessities – whereas additionally racking up a efficiency monitor document.

The proto-HCF has outperformed the benchmark FTSE Developed Core Infrastructure 50/50 Index over the three-and-a-half 12 months interval, he mentioned.

Domiciled in Luxembourg, the Morrison fund is constructed to European specs as a UCITS (Undertakings for the Collective Funding in Transferable Securities) product. The supervisor has additionally constructed an Australian unit belief model that feeds into the UCITS automobile – out there as hedged or unhedged to each the NZ and Aussie currencies.

“Some buyers just like the Australian unit belief construction,” Skerman mentioned whereas the pure UCITS provides different forex choices.

He mentioned there have been no plans but to launch the fund as a portfolio funding entity (PIE),

In the end, Morrison plans to market the funds in different jurisdictions with tentative talks already underway in Europe.

The Luxembourg arms of FundRock and father or mother firm, Apex, present respective internet hosting and administration companies for the Morrison fund whereas SEB – the department of Skandinavinska Enskilda Banken primarily based within the European city-state – is custodian.

With a minimal $50,000 preliminary funding, the HCF annual charges vary between 0.5 to 0.9 per cent in a tiered pricing construction.

The UCITS guidelines additionally set just a few danger administration limits on fund holdings reminiscent of a ten per cent most place in anyone inventory.

Skerman mentioned the HCF will usually maintain 20 to 30 shares chosen in line with the Morrison course of that follows a thematic evaluation of infrastructure traits mixed with valuation metrics and an “fairness market overlay”.

“We see demand for infrastructure rising in lots of developed economies, fuelled by lengthy durations of public under-investment, the necessity to decarbonise, technological adoption, the demand for larger home infrastructure safety within the face of heightened world safety and provide dangers, and the necessity to meet inhabitants development and demographic adjustments,” he mentioned in a launch.

In apply, the HCF invests about 90 per cent of the portfolio in US and European markets – in roughly equal measure – with the rest housed in different OECD areas together with NZ (however not at the moment in Australia).

International listed infrastructure has been a well-liked asset class for NZ buyers with a number of merchandise now out there from companies reminiscent of Maple-Brown Abbott, First Sentier Traders, Magellan and Salt (that includes Cohen & Steers as underlying supervisor).

Nevertheless, Skerman mentioned Morrison has a point-of-difference as a pure-play infrastructure supervisor with 30 years of institutional information in each listed and unlisted markets to lean on.

He mentioned the Morrison title, too, has some cachet amongst native buyers – even when many don’t realize it’s the 402nd largest fund supervisor on this planet.