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NZ Super tops-up top ranks, buys low as market tanks

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The NZ Superannuation Fund (NZS) has confirmed a trio of senior appointments, luring two overseas candidates to assume the plum positions.

In an update last week, the NZS named Kathryn Kerner, Kevin Wong and Rachael Le Mesurier as respective head of data analytics, senior investment strategist and head of diversity, equity and inclusion. Both Kerner and Le Mesurier move into newly created roles at the fund.

Kerner, who is married to a New Zealander, joins the NZS from the Federal Reserve in Chicago where she was a data analyst for the wholesale credit risk division. She told the New York University Stern school of plans to move to the Asia-Pacific region at some point to use her data analytical skills in a government or consultancy setting.

“Public sector data has significant value and when used effectively it has the potential to improve efficiency, shape policy, and save taxpayer money,” she says in the Stern article.

Le Mesurier was executive director of poverty-focused charity, Oxfam NZ since 2014 while Wong comes to the NZS from the A$230 billion Australian Retirement Trust where he served as dynamic asset allocation portfolio manager.

Wong will work alongside the recently appointed NZS head of asset allocation, Charles Hyde (photo at top). He replaces Chris Worthington, who was named head of quantitative analysis and risk at Australian consulting firm, JANA, this February.

“The asset allocation team is responsible for the key investment decisions in the fund, including the design of the reference portfolio as well as the allocation of active risk across the fund,” Hyde said in a statement. “We’re pleased to be able to attract someone of Kevin’s calibre to come and work with us in New Zealand.”

And the fund is applying some its asset allocation chops to take advantage of recent market volatility, the NZS update says.

“As in previous market downturns, we are looking to make the most of our long-term horizon, investing in a contrarian style and buying assets when we consider them to be cheap,” the release says.

Last year NZS cut its direct holdings of global shares in half while maintaining full market exposure via a derivative overlay. Nonetheless, the sovereign wealth fund has taken a hit during the 2022 market shake-out, which has seen both equities and bonds dive.

After flirting with $60 billion a few months ago, the NZS reported funds under management of about $57 billion at the time of its release last week: by Friday the running valuation published on the fund’s website clocked in at just over $55 billion.

“Recent market conditions have seen the value of the NZ Super Fund drop, and [specialist publication] Global SWF expect fund performance figures generally to deteriorate next year,” the release says. “This year is certainly proving to be a challenging one for markets.”

For the 12 months to the end of March, however, the NZS expects to report after-cost returns of more than 10 per cent, keeping up a generally high performance stand that saw it top the Global SWF return tables for the six years to December 31, 2021.

According to the Global SWF rankings, the NZS returned an annualised 11.79 per cent for the six-year period, well ahead of the second-placed Alaska fund on 10 per cent: the Australian Future Fund (returning about 9 per cent per year) was sixth on the list of 20 top-performing SWFs. NZS also beat all but two of the separately ranked public pension funds in the Global SWF analysis.

The update confirms a new manager on the NZS roster with a commitment to US-based infrastructure manager, Stonepeak. Under the agreement, NZS will invest into a Stonepeak diversified infrastructure fund, which plays largely in the US market.

At the same time, the fund tipped in a further €70 million to a European property portfolio managed by Slate Asset Management.




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