Milford Asset Management suspended from Super Fund

NZ Herald

1 Apr, 2015 11:10 PM2 mins to read

The investigation into Milford Asset Management followed a referral from sharemarket operator NZX.

The New Zealand Superannuation Fund has suspended Milford Asset Management's $281 million active equities mandate until a Financial Markets Authority investigation into alleged market manipulation at the Auckland-based fund manager is completed.

In a separate statement, the FMA said it expected to complete the final steps the investigation in the next few weeks.

"The Milford investigation concerns complex matters and is subject to a rigorous process, and is almost complete," the FMA said.

"Our investigation does not relate to, or raise concerns about, the security or safety of Milford's client funds or assets."

Milford has held the external management mandate since 2009.

The funds would be managed internally in the interim, the Super Fund said.

"We appreciate that the FMA has rigorous processes to go through and that market investigations can be complex and take time," a Super Fund spokeswoman said.

"Given the passage of time since the investigation was confirmed, however, we have decided to put the mandate on hold until the investigation is complete."

Milford said it was surprised by the Super Fund's decision to suspend the mandate.

"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," said managing director Anthony Quirk.

"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."