$4b funds manager to leave NZ

The local funds management industry got even smaller yesterday with $4 billion-firm Alliance Bernstein confirming it is "relocating" out of New Zealand.

The company, half owned by takeover target Axa Asia Pacific, has a lineage in this country that stretches back to National Mutual.

After days of speculation about the firm's future here, a market source told the Business Herald Alliance Bernstein's staff had not logged on to Bloomberg terminals yesterday.

The Business Herald called the firm's Wellington office which referred us to Alliance Bernstein's Australian managing director, Michael Bargholz, who confirmed the company was to close down its New Zealand-based operations and service local clients out of Sydney and Melbourne.

Alliance Bernstein manages $4 billion in New Zealand client funds.

Bargholz was adamant that "we are not leaving New Zealand".

But he said that after a "comprehensive review of New Zealand operations and consultation with staff" the firm had decided to run a combined Australasian equities operation based in Sydney and a combined fixed-interest team based in Melbourne.

Client servicing for New Zealand institutional clients with individually managed accounts would be conducted out of Australia.

Alliance Bernstein's Wellington office, where most of its dozen or so local staff are based, would be closed.

"We intend to continue serving New Zealand clients in international equity services in domestic equities and international and domestic fixed income," said Bargholz.

Alliance Bernstein entered the New Zealand market in early 2001 and its clients include 50 per cent owner Axa Asia Pacific, which is itself subject to a takeover bid from its French parent Axa SA and Australia's AMP. Other clients include the New Zealand Government Superannuation Fund which manages public servants' retirement savings.

Alliance Bernstein assumed responsibility for managing Axa's investments while Axa itself took over National Mutual in 1995.

Bargholz, who was Axa Investment Management chief executive in New Zealand between 1997 and 2000, said he had "great respect for the New Zealand marketplace and for the heritage of investment management for New Zealand clients".

"We think we can serve clients best by making this move."

However, NZX head of markets Geoff Brown said: "Anything for us in the context of changes to participants whether they be brokers or fund managers is something you'd never regard as being good news."

Brown expected most of the money managed by Alliance Bernstein would end up managed by somebody else or managed by the same firm out of Australia.

MOVING ON

* Fund manager Alliance Bernstein has confirmed it is to close its New Zealand operations.

* It will continue to manage New Zealand clients' money but out of its Sydney and Melbourne offices.

* The company has $4 billion in New Zealand funds under management.