The Guardians of New Zealand Superannuation, the Crown entity that manages the New Zealand Superannuation Fund, has been praised for its professionalism in a recent independent review.

The 2014 review was conducted by the Promontory Financial Group.

“Promontory’s overall assessment is that the Guardians run a very professional operation,” the report says. “We believe many aspects of the Guardians’ operations are ‘best in class’.”

The report notes that the Guardians are among a minority of global professional fund managers who have been successful in adding substantial value above their benchmarks over a sustained period of time.

The Fund has exceeded its passive Reference Portfolio benchmark by 1.22% p.a. ($3.2 billion) since investing began in September 2003.

Describing the Guardians’ approach to investing the Fund as “intellectually sophisticated, consistent and disciplined,” Promontory confirm that the Guardians “have implemented appropriate investment strategies, as well as sound systems and controls to manage risk and reduce costs”.  They describe the quality of the Guardians’ staff as “impressive”.

Guardians’ Chairman Gavin Walker welcomed the report’s findings. “It is pleasing to get independent confirmation from Promontory that the Guardians’ overall investment approach is consistent with best practice by international sovereign wealth funds.”

“It is also good to receive recognition of the progress that has been made by the Guardians since the last independent review in 2009,” Mr Walker said. “We are committed to ensuring that we are investing and managing the Fund in line with global best practice.”

Chief Executive Officer Adrian Orr said Promontory had made some useful recommendations and suggestions.  “Many of these recommendations we had already identified and are working on, as the report acknowledges,” Mr Orr said.

An independent review of how effectively and efficiently the Guardians are performing their function is carried out every five years, as required by the New Zealand Superannuation and Retirement Income Act 2001. Reviews were previously carried out in 2009 and 2004.

The terms of reference for the review were set by the Minister of Finance. The Minister of Finance also appointed Promontory to undertake the review.

ENDS

Copies of Promontory’s report and the Guardians’ response are available on www.nzsuperfund.co.nz.  Copies of 2009 and 2004 reviews of the Guardians are also available on the website.

The $26 billion New Zealand Superannuation Fund invests globally in order to help pre-fund New Zealanders’ future retirement entitlements. Since inception in September 2003 the Fund has returned 9.86% p.a. after costs and before tax (as at 30 September 2014).

Media contact: Catherine Etheredge, Head of Communications, cetheredge@nzsuperfund.co.nz, 0274 777 501