Win for Bank of Montreal’s REO engagement overlay service as New Zealanders sign up

The rebranded F&C service signs up NZ Super and other crown institutions

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The New Zealand Superannuation Fund and two other ‘crown financial institutions’ in the country have appointed BMO Global Asset Management to provide responsible investment engagement services globally.

NZ Super and the Accident Compensation Corporation and Government Superannuation Fund manage more than NZ$60bn (€36.2bn) combined and the award represents a major win for the long established REO [Responsible Equity Overlay] offering originally developed by F&C, the UK based fund manager acquired by the Bank of Montreal last year and which is being re-branded.

As at the end of last year, REO – which was launched in 2000 – had £68.3bn (€88bn) under advice so the new assets provide a significant boost. Rival Hermes Equity Ownership Services, ultimately owned by the BT Pension Fund, has some £124bn under advice.

In February Archbishop of Canterbury Justin Welby was named as President of the revamped Responsible Investment Advisory Council at the then-F&C.
The Accident Compensation Corporation provides personal injury cover for all New Zealand residents andvisitors while the Government Superannuation Fund Authority runs a state employees fund that was closed to new entrants in 1992.

NZ Super provides responsible investment resources to both of them. BMO will engage with companies on a range of environmental, social and governance issues on their behalf. NZ Super said the move would enable its in-house team to increase their focus on domestic company engagements and “other priorities”, adding the team would retain strategic oversight of international engagements.

NZ Super has a commitment to engagement while excluding a range of activities from its investment universe, including cluster munitions, nuclear explosive devices, anti-personnel mines, tobacco and whale meat.

Paul Bevin, General Manager Investments for the Government Superannuation Fund, said: “Collaborative engagement by multiple investors is more effective than acting alone in influencing company behaviour. BMO will facilitate this collaboration by the crown financial institutions and other like-minded global investors.” The financial terms of the deal weren’t disclosed. Link