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The Northland Regional Council (NRC) has put management of its almost $70 million investment fund in play after calling for expressions of interest last week.
In a proposal document, the NRC says applicants must “have the professional skills and expertise that can be reasonably expected of a professional investment advisory service”.
Auckland-based actuarial consulting firm, EriksensGlobal, serves as incumbent adviser to the Northland fund with the Council flagging a similar arrangement in its search for alternatives.
“Previously these services have been provided by an independent investment consultant/advisory firm,” the Council proposal application says. “Going forward we wish to procure a contract with an independent investment consultant/advisory firm.”
The NRC is also not looking for a radical portfolio overhaul, noting all candidates for the consulting gig must manage the fund in “accordance with a Statement of Investment Policy and Objectives [SIPO]”.
“We don’t want proposals that seek to diverge management of the fund away from the investment policies and objectives as described in the SIPO,” the registration of interest document says.
Somewhat unusually, however, applicants must also submit fee schedules for all of the current NRC fund manager line-up.
In reply to a query, the Council notes: “The intention is for respondents to provide the fee structures of the current (existing) underlying investment managers as listed in the SIPO.”
But the stipulation may turn off potential candidates given consulting firms often negotiate bespoke wholesale fees with favoured managers.
Applicants must also confirm they don’t receive commissions or other incentives from managers in the portfolio.
The SIPO names almost 20 underlying investment firms – including mainstream asset managers Castle Point, Mint, Milford, Harbour, Nanuk, Schroders and BlackRock and a diverse private equity palette featuring names such as Continuity Capital, Direct Capital, Federation and Oriens.
NRC established the fund “to promote business development in Northland and stabilise the impact of large irregular infrastructure projects on the Council’s income and capital requirements”.
Interested parties will have until July 28 to lodge an application with a short-list due by August 11 ahead of a short request for proposal period starting on August 14: the winner starts the contract, valued at under $100,000 per year, on September 1.
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