The New Zealand Superannuation Fund has suspended Milford Asset Management's mandate as one of its money mangers until a Financial Markets Authority (FMA) investigation into Milford is completed.
In the interim, the funds will be managed internally by the NZ Super Fund.
Milford Asset Management was appointed to a Super Fund New Zealand active equity mandate in 2009.
The value of the mandate is NZ$281 million.
Milford's managing director Anthony Quirk says he's surprised the Super Fund has decided to suspend Milford's investment mandate before the FMA investigation is completed.
"As the FMA confirmed in a statement today, its investigation does not raise concerns about the security or safety of Milford client funds or assets. The FMA expects to conclude the final investigation steps in the next few weeks and hopes to make a public announcement at that time or shortly thereafter," says Quirk.
He says Milford hasn't commented on the specifics of the investigation due to respect for the due process of the FMA investigation, and a confidentiality order imposed by the FMA.
"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," Quirk says.
In the FMA's statement spokesman Andrew Park says the Milford investigation concerns complex matters, is subject to a rigorous process, and is almost complete.
"We expect to conclude the final investigation steps in the next few weeks at which point we will continue our engagement with all the parties based on our findings. We hope to make a public announcement at that time or shortly thereafter. Our investigation does not relate to, or raise concerns about, the security or safety of Milford’s client funds or assets," says Park.