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EW realigning investment mix and managers

Environment Waikato’s council has endorsed a new mix of investments for its $66 million investment fund.

The new investment mix and fund manager arrangements follow on from a new investment strategy decided on last year by the council.

Councillors have adopted recommendations from EW’s independent advisers Mercer NZ Ltd to have four different fund managers manage its portfolio.

· Brook Asset Management will manage investments in Trans-Tasman shares.

· Global share investments will be managed by Russell Investments, whose Global Opportunities Fund has been returning 2.5 per cent more than the industry benchmark (Russell previously managed all of EW’s investments).

· International fixed interest investments will be managed by two active managers through Tower Investments.

· Investments in interest-bearing cash investments in New Zealand will be managed by AMP Capital NZ.

Investments will be allocated on the following basis:

Global bonds (fixed interest investments)

32 per cent

NZ cash

30 per cent

Global equities

18 per cent

NZ bonds (fixed interest investments)

8 per cent

NZ equities

7 per cent

Property

5 per cent

"After extensive consultation with Mercer, and detailed discussion amongst

councillors, it is felt this mix of investments and managers will continue to allow us to build the investment fund as an asset for current and future generations in the Waikato," said finance group manager Mike Garrett.

The council also received a report from the finance committee which said that to February returns from fund investments were $5.6 million ahead of budget for the financial year, which meant 75 per cent of 2008-09’s losses during the global financial crisis had been recovered. Since then further gains have been recorded.

Mr Garrett said it was pleasing to see returns tracking above expectations for this year. "In conjunction with Mercers and our financial managers, we will continue to keep a very close eye on the fund’s performance to ensure we get the best results possible."

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