The mystery suspension of Milford

Milford Asset Management has been suspended from its role as asset manager by The Guardians of New Zealand Superannuation, the manager of the New Zealand Superannuation Fund, until a Financial Markets Authority (FMA) investigation into Milford is completed.

Catherine Etheredge, media spokeswoman for the Guardians, elaborated briefly upon the official announcement, saying: “Given the passage of time since the investigation was confirmed we have decided to put Milford’s mandate on hold until the investigation is complete. We have reduced Milford’s mandate to zero and control of the funds managed by Milford will revert to the Guardians. The investment management agreement with Milford remains in place. We will continue to monitor the situation and update our view of the manager.”

Milford Asset Management was appointed to a New Zealand active equity mandate by the Guardians in 2009. The value of the mandate is NZ$281 million.

In a formal statement, Milford Asset Management says it is surprised by the decision.

“As the FMA confirmed in a statement today, its investigation does not raise concerns about the security or safety of Milford client funds or assets,” the boutique active investor firm says.

“The FMA expects to conclude the final investigation steps in the next few weeks and hopes to make a public announcement at that time or shortly thereafter.”

Managing director Anthony Quirk says: “We have not commented on the specifics of the investigation because we respect the due process of the FMA investigation and are bound by a confidentiality order imposed by the FMA.”

“We will continue to refrain from any comment that could be seen as undermining the investigation process or pre-empting the outcome. In the meantime we look forward to completion of the investigation and release of any findings.”

Milford has won the INFINZ Equities Fund Manager of the year for 2010, 2011, 2012, 2013 and 2014.