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Is a lack of activist shareholders hurting KiwiSaver?

Published on 06/01/2021

KiwiSaver returns

Fund managers now manage more than $200 billion of ordinary New Zealanders’ savings, in KiwiSaver and other investment funds. By 2030 it should be well over $400b.

With that much saved by New Zealanders, you would think that the fund managers investing it would be pretty vocal on their behalf. Yet there is virtual silence.

For example, during Covid, some listed companies made questionable decisions in laying off staff and keeping wage subsidies, while senior managers received low, or no, pay cuts. Yet fund managers, who owned large chunks of these companies on behalf of 3 million KiwiSaver investors, were absent from the debate. 

There are other key long-term issues where KiwiSaver managers, as representatives of shareholders, should be activists. Diversity, sustainability and executive pay are three obvious ones.

To have KiwiSaver managers so passive and silent on issues we care about feels like a bad deal for KiwiSavers, and it is hurting future returns.

In this latest article on Stuff, Sam Stubbs argues it’s time for most asset managers to realise who they are really working for – their members.