Why fundies are looking across the ditch to NZ market
Three fund managers have shared why they opted to expand their distribution to the New Zealand market, with adviser engagement rather than platforms crucial to achieving success in the wholesale market.
In March, Pella Funds Management announced it had expanded its fund offering to allow direct access to its Global Generations Fund in New Zealand as a portfolio investment entity (PIE). While Pella is already registered in New Zealand, this is the first time it has used a PIE structure that allows New Zealand investors to directly access the fund.
This was closely followed by GSFM and its fund manager partner Munro Partners, which launched an investment fund for New Zealand wholesale investors. Its distribution capability in the New Zealand market will give local investors access to the Munro Global Growth Climate Leaders PIE Fund.
Speaking to Money Management, Pella’s head of distribution Joy Yacoub said the decision to enter New Zealand stemmed from the country’s focus on responsible investment practices. For example, the country’s KiwiSaver default schemes are already required to exclude fossil fuels and controversial weapons.
“Pella’s investment philosophy, with a zero-tolerance policy for these sectors, is very well-aligned with these standards. This, combined with our performance-driven mindset, made New Zealand a logical and exciting market for us.”
Meanwhile, GSFM chief executive Damien McIntyre said the firm had already had an institutional presence in New Zealand for the past 10 years which had helped inform its understanding of the market.
"Our commitment to New Zealand is solid – and the decision was made to launch as a PIE, rather than as a feeder fund. The PIE gives New Zealand investors the most efficient structure for their investment.
“Every market has its own nuances, but they are very similar overall. You have to respect that NZ investors prefer a PIE structure and the tax considerations, but we felt we had sufficient market interest to launch it,” he told Money Management.
“We absolutely intend to launch more. This is the first, and we think we can launch more in the market.”
For Bennelong chief executive, John Burke, the firm has offered funds in New Zealand for several years and was the first market it entered outside of Australia.
“With the NZ market’s growing KiwiSaver scheme, along with a growing high-net-worth segment, we see opportunities to support investors there for the long term. We also see our investment strategies being well-suited to NZ institutional clients, family offices, and financial advisers.”
He said the main difference between the two markets was the lack of a self-funded pension scheme, which Bennelong felt limited the opportunities for NZ investors to access innovative investment strategies.
As of September 2024, the KiwiSaver scheme had NZ$111.8 billion ($102 billion) in funds under management, with over 3.3 million members. Unlike Australia’s superannuation scheme, which is compulsory for every working Australian and is almost $4 trillion in size, KiwiSaver is only voluntary and employees can opt out of the scheme.
“Wholly off the back of the maturation of our superannuation sector, Australian investors have access to a world-class range of investment managers and product types, and with it access to all large and emerging asset classes,” Burke said.
“The relative size of the NZ market and the relative maturity of the KiwiSaver scheme has meant achieving the same level of fund choices has not been available for NZ investors, and therefore there is the potential that investments will have less diversification than in Australia.”
ESG focus
Both of these funds launched by GSFM and Pella have a focus on responsible investing, and it is understood New Zealand is further down the ESG path than Australia.
Research by the Responsible Investment Association Australasia (RIAA) in February 2025 found three-quarters of NZ respondents expect their KiwiSaver and managed funds to be invested ethically and responsibly. Half were concerned about greenwashing, and 66 per cent said they wanted to know the companies held in their portfolios.
Some 49 per cent of respondents said they would consider investing in an ethical fund in the next five years.
Yacoub said: “While Australia has made significant strides towards a clearer regulatory framework in the RI space, the European market is further along that path, and we see New Zealand as having followed a similar direction, with notable progress and firm expectations around responsible investing.”
Commenting on the report’s findings, Dean Hegarty, co-CEO of RIAA, said: “The message from Kiwis is clear, they expect their investments to align with their values and the demand for responsible products will continue to grow. Investment providers and financial advisers must take this seriously.
“This presents a significant opportunity for investment providers who can authentically demonstrate how they’re contributing to positive social and environmental outcomes."
Adviser distribution
There are also differences in how funds are distributed and close engagement with financial advisers is critical in New Zealand, Yacoub said. In contrast, the Australian market is much more driven by fund platforms.
There are 8,472 financial advisers in New Zealand as of 30 September 2024, compared to around 15,500 in Australia. Looking at financial advice providers, there are 1,410 providers in New Zealand, with 406 working as a sole adviser or one providing digital advice. A further 942 are providers who may engage several advisers providing advice to retail clients and/or have authorised bodies under their licence and/or digital means, with the remainder providing financial advice to retail clients via nominated representatives.
Earlier this year, the Financial Markets Authority (FMA), which is responsible for New Zealand’s financial regulation, announced it will conduct an advice review on the opportunities and challenges in financial advice.
The four proposed areas for consideration in the FMA terms of reference are:
- Consumer preferences and demographics.
- Remuneration structure and advice business models.
- Digital advice and innovation.
- Ease of provision of financial advice.
Yacoub said: “In New Zealand, KiwiSaver is central to the investment landscape, our seed investor for the PIE fund launch, with close engagement with financial advisers and direct-to-investor channels proving highly effective.
“In Australia, the market has evolved to be more platform-driven, with strong adviser relationships remaining important, alongside significant growth in managed accounts (SMAs) and closer collaboration with investment consultants. We see both markets as offering excellent opportunities, each with their own distinct characteristics.”
Burke added: “There are less financial advisers per capita in NZ, and larger individual clients are often advised by private client stockbroking firms and accountants. However, an ageing population looking to downsize property and diversify their assets, coupled with the growth of the KiwiSaver scheme, means there is a sizeable market for the growing financial advice sector.
“A small number of wealth platforms are also establishing a presence, recognising the future growth from KiwiSaver and the financial advice sector.”
AUTHOR
Laura Dew
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