Northern Trust Asset Management has been selected by The Guardians of New Zealand Superannuation, the manager of the NZ$30bn New Zealand Superannuation Fund, to manage two new factor investing mandates.
The mandates, namely NZD300m low volatility strategy and NZD300m value investing strategy, will use funds Northern Trust already invests passively in global equities on behalf of NZ Super.
The mandates will utilise a factor investing approach that builds an alternative portfolio based on pre-determined factors, with an aim to provide risk-adjusted returns over the long-term, NZ Super said in a statement.
The new deal between the two parties extends a relationship that first started in 2007.
NZ Super Fund CIO Matt Whineray said: “We have worked closely with Northern Trust Asset Management over a number of years, and are delighted to continue to deepen our partnership with them through these mandates.
“Value and low-volatility factor strategies are well suited to our beliefs and advantages as a long-term investor.”
In 2007, Northern Trust first set up its Australia office to serve institutional investors in Australia and New Zealand, and from 2015 began offering asset management solutions directly from its Melbourne office. The firm snapped up Aviate Global this year and set up its Sydney office.
Northern Trust Asset Management head of Australia and New Zealand Bert Rebelo said: “We continue to see an increasing interest in factor investing strategies as asset owners look to exploit investment opportunities most efficiently in a low return environment. When appropriately selected, adopting factor tilts can result in greater returns and outperformance.”