Russell gets multi with NZ shares

Russell Investments has doubled the number of underlying managers in its NZ shares fund.

The NZ shares fund is one of the five Russell-managed portfolio investment entity (PIE) products marketed by Wellington-based Implemented Investment Solutions (IIS).

A note to Russell Investments NZ Shares Fund clients says Devon Funds Management had been awarded a mandate that would eventually see it split duties evenly with incumbent Harbour Asset Management.

“Devon meshes well with the fund’s existing manager, Harbour Asset Management Limited, offering a complementary investment style,” Edmonds said. “Harbour favours a growth style of investing, while Devon is more of a value manager.”

According to the client note, both Devon and Harbour manage the Russell funds to strict mandates with the requirement to hold only NZ shares (including dual-listed stocks).

“This means that the portfolios held by each manager may be quite different to their own funds,” the note says, “… for example, within their own funds these managers might hold quite high levels of Australian shares, whereas within the Russell Investments NZ Shares Fund we are focused on providing clients with exposure to NZ shares.”

The note says Russell’s implementation management team helped transition the funds to Devon with the intention to move from an initial 20 per cent weighting to equal allocations between the two managers over time.

Devon was given the full Russell treatment, including an operational due diligence (ODD) analysis, prior to its appointment, the client note says.

“[ODD] looks beyond the manager’s investment capability, and focuses on operational, risk and compliance factors,” IIS says in the note.

Harbour had been sole manager for the Russell NZ shares product since inception in 2013. At latest count, the NZ shares product had funds under management of almost $120 million, up from just under $90 million at the end of March 2015.

According to the recently-released January 2016 Aon Investment Update, the Russell Investments NZ Shares Fund was ranked 9th out of 21 similar funds for the last year.

Last year, IIS also reported total FUM across the Russell products it promoted had breached the $1 billion mark.

In October 2015 the London Stock Exchange sold Russell Investments to a consortium of two US private equity firms, TA Associates and Reverence Capital Partners, for about US$1.15 billion.

This January Russell named Vernon Barback as president.

“Barback will focus on leading strategic infrastructure initiatives, including building and operating a comprehensive shared services model and advancing Russell Investments’ technology strategy for its multi-asset solutions business,” Russell said in a statement.

Barback joined Russell from the firm he co-founded, Altß Partners, which was previously a TA Associates investment.

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