Implemented Investment Solutions (IIS) – PIE and chips: a uniquely Kiwi investment story

InvestNow had a cracking inaugural year.

The online managed funds shop – fresh to market in March 2017 – has since built a following among many thousands of savvy direct clients who collectively have invested well over $150 million.

But InvestNow didn’t just pop out of the ether into the internet. Behind the retail front stands a well-regarded investment operation with decades of baked-in industry experience to call on.

Launched in 2011 by NZ managed funds veteran, Anthony Edmonds, Implemented Investment Solutions Limited (IIS) – the InvestNow parent company – occupies a unique niche in the local industry.

IIS is one of the 68 entities that fall under the Financial Markets Conduct Act (FMC) ‘licensed managed investment scheme manager’ legal umbrella. However, IIS is the only regulator-approved business to offer what is known as ‘fund hosting’ services in NZ.

To put it formally, as a ‘fund host’ IIS provides the FMC-compliant packaging that allows a number of international managers to offer their products in NZ under tax-effective portfolio investment entity (PIE) structures.

“But that’s quite a mouthful,” Edmonds says. “Really, if you can imagine a managed fund as pack of salt-and-vinegar potato chips then what we do is more simply explained as akin to putting the chippies in bags.”

He says the chippie ‘value chain’ has three key components: cooking; bagging; and, selling.

“Investment management is much the same,” Edmonds says. “The fund managers – in our case the offshore investment firms – are the chip-cooks: making sure the underlying assets don’t burn, and seasoning to taste.

“IIS’ role is to put a PIE fund wrapper around the underlying investment portfolio, and produce the disclosure material for the fund – or bagging and labelling in the potato chip world.”

Edmonds says very few investors would probably realise that under NZ law ‘bagging and labelling’ – or ‘issuing and managing’ in FMC-speak – is the licensed activity rather than chip-cooking itself.

“IIS issues and manages funds for the global investment managers we work with,” he says. “This enables the investment managers to focus on their area of expertise – that is, managing portfolios in line with their specific investment philosophies and processes.”

To date IIS has ‘bagged up’ more than $3 billion of ‘chippies’ across a variety of offshore managers on behalf of NZ investor groups covering corporate superannuation schemes, KiwiSaver funds, charities, family trusts, and individuals.

“When we started IIS in 2011 we worked exclusively with US-headquartered Russell Investments – globally renown as a ‘manager-of-manager’ provider,” Edmonds says. “Since 2016 we have added a few more to the stable including: Hunter Investment Management (which invests with high-profile international fixed interest specialist PIMCO); Australian listed property fund, APN; and, our latest partner, the multi-brand global investment giant, Legg Mason.”

Many of the IIS-hosted funds are also available via the InvestNow platform, which Edmonds says has put a range of high-end ‘chippie’ brands on retail shelves for the first time in NZ.

InvestNow is a natural extension of the IIS fund manufacturing capability but Edmonds says it was never intended to offer just home-brand products.

“In addition we have included funds from other investment managers like Vanguard, Devon, Fisher Funds, Nikko and Harbour Asset Management,” he says, among a full list of about 16 managers and almost 90 underlying products.

“We know investors have different tastes and needs: InvestNow allows them to package it up their own way.”

By |2018-03-28T13:40:58+00:00March 28th, 2018|Uncategorised|0 Comments