Salt Funds Management has established a new range of products that will see the Auckland-based boutique branch out into global asset classes for the first time.
In deals with inked with two high-profile international investment firms – Morgan Stanley and, Cohen and Steers – Salt has built three offshore equities products while also laying the legal groundwork for two diversified funds.
All five new Salt funds carry the ‘sustainable’ tagline, reflecting the high environmental, social and governance (ESG) content of the underlying strategies.
Salt will invest into an underlying concentrated international shares portfolio (of between 25 to 50 stocks) managed by Morgan Stanley and two funds operated by real assets specialist firm, Cohen and Steers, covering global listed property and listed infrastructure, respectively.
Paul Harrison, Salt co-founder, said in a statement: “A move into global equities is a logical next step for Salt and has been part of our strategical thinking for some time.
“To be able to bring two high quality, active fund managers in Morgan Stanley Investment Management and Cohen and Steers, to the New Zealand market is exciting. Our new sustainable investment funds integrate ESG and have a high focus on company engagement. This stems from a bottom up fundamental research approach.”
According to product documents, the Morgan Stanley fund has a low carbon exposure relative to its benchmark along with strong ESG integration including an exclusion list covering “Tobacco; Brewers; Distillers & Vintners; Casinos & Gambling; Energy; Metals & Mining and Utilities (excluding Renewable Electricity & Water Utilities)” among others.
The Cohen and Steers funds also feature ESG analysis as an “integral part of the investment process with distinct ESG factors relevant to each sector analysed in an effort to identify potential value and mitigate risks”.
“Further insight is gained and positive change is driven though active engagement,” the document says.
The growth and income diversified funds, due to go live in the second half of this year, will mix the new global portfolios with other Salt strategies.
The US-based Morgan Stanley boasts about US$715 billion in assets under management while the New York Stock Exchange-listed Cohen and Steers reported US$71.2 billion in funds as at the end of last October.
Founded in 2013 by the former BT Funds Management NZ local equities portfolio managers, Harrison and Matthew Goodson, Salt has until now limited its investment palette to Australasian shares despite ongoing client requests for a global equities solution.
It is understood the new batch of global products have been in planning for some time with a launch hinging on staff resources.
Late last year Salt hired former AMP Capital NZ chief and head of sales – respectively, Bevan Graham and Greg McMaster – in part to drive the new global funds.
“Our diversified offerings will come later in 2021,” Harrison said. “We invested into our team last year, including bringing on an ESG adviser, Sonya Fynmore, head of client partnerships, Greg McMaster, and have Bevan Graham, economist joining the team in early February. We are striving to provide the best possible investment outcomes for our clients.”
The global products roll-out follows the release of the Salt Core NZ Shares Fund in September 2020, its first unlisted offer in more than five years. However, the group listed the Carbon Fund on the NZX in 2018.
In total, Salt now has 10 products including the Carbon Fund. The manager is currently taking ‘expressions of interest’ in the new global equities funds with the diversified funds still under construction.