Monday 21st May 2012
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Tyndall Investment Management New Zealand has dumped its boutique New York-based fixed interest portfolio manager in favour of Goldman Sachs' global reach, citing in part fears about the quality of European bond issuance.
Peter Lynn, managing director of Nikko Asset Management-owned fund manager Tyndall, said the volatility of global financial markets and the deterioration in the quality of government bonds as an asset class favoured Global Sachs Asset Management to take over its Global Fixed Interest Fund.
The fund has $160 million out of $3.3 billion of funds under management by Tyndall, of which some $650 million is managed offshore, with the remainder overseen by Tyndall's in-house fixed interest and equities teams in New Zealand.
Since its inception in March 2002, the global fixed interest fund had been managed by Fisher Francis Trees and Watts, a New York-based firm with two international offices, in Singapore and London. "Where we see the benefits of Goldman Sachs is they are very much a global outfit," said Lynn. FFTW's performance had not been at issue, but its lack of presence in Europe, Australia and emerging Asian markets was a handicap, he said.
"We think it's important, in this environment, with European bond issues being so prevalent, to have people on the ground there," Lynn told BusinessDesk. "Emerging market debt is a very small part of our portfolio and the index, but it's a growing area. It's important to have analysts in places like that."
The main attraction was GSAM’s focus on risk management, with the construction of a risk budget as the first stage in the process to ensure the fund retained its traditional place as an investment offering "a safe, steady, ‘no surprises’ part of a diversified portfolio." The mandate is GSAM's first in New Zealand and the New York-based firm will be remunerated on a "simple basis points on the assets" basis, although the rate was commercially sensitive.
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