Written: 31 August 2022

Author: Jono O’Grady

4 min read

One of the most prominent names in asset management in New Zealand is Harbour Asset Management. They are a home-grown, New Zealand success story – a trusted business with over $7B in funds under management. So, what about Harbour makes them unique in such a crowded industry, and why might a DIY investor consider investing in a Harbour fund? In this article we unpack the ethos and company which make up Harbour.

Background

Harbour was founded in Wellington in 2009 and has become one of New Zealand’s most highly rated investment managers. The company has over 30 staff – a significant business in an industry made up of many smaller boutique managers and only a handful of larger players. The majority shareholder of Harbour Asset Management is Jarden Group Limited, New Zealand’s leading investment and advisory group founded over 60 years ago by former All Black Ron Jarden. The remaining 24% of the company is owned by Harbour staff.

Investment ethos

Understanding the way that asset managers think about investment, their ethos or philosophy, is an important factor when making your own investment decisions. So, what makes Harbour tick? Harbour states it operates by four main principles:

1. ‘Research drives our investment decisions’
2. ‘We believe in consistency’
3. ‘We focus on responsible investing’
4. ‘There is no substitute for experience’

Research driven

Harbour stands by a research-driven approach to investing and structured quantitative analysis as the backbone for investment decisions in their active funds. This research-driven approach to investment may be a drawcard for some DIY investors offering peace of mind that investment decisions are well thought through, and evidence based. While every investment involves risk, some investors may feel confident knowing Harbour are forthcoming in their research-driven approach. Harbour says:

“We believe fundamental research drives investment outperformance. A structured quantitative analysis of the investment universe can assist in providing our analysts with further tools to determine the best investment opportunities. By adhering to our investment style and approach through market cycles we provide integrity and balance in portfolio construction.”

Consistent approach

Markets cycles come and go, and consistency is one of the fundamental principles that Harbour applies to asset management. DIY investors come from all walks of life, and while some may have extensive experience of market ups and downs, there will be a lot of DIY investors who simply haven’t been around the block as many times as the team at Harbour. People are subject to all sorts of feelings and emotions which can impact their ability to make investment decisions, such as loss aversion bias (people tend to prioritise avoiding loss over gains, and feel the pain of losing money more than the happiness of earning it.) Harbour’s understanding of how market cycles work, and their consistent investment processes and practices designed to combat those biases, could be a highlight for some platform-based investors. Those who are just dipping their toes into the water for the first time may stand to benefit from Harbour’s consistent approach to investment.

“Years of experience and lessons learned over many market cycles have helped the Harbour team craft a robust and disciplined investment process. We believe that consistency of process delivers the best investment outcomes over the medium to long term for our clients.”

Focus on Responsible Investing

Harbour has come a long way since 2009, but still holds to its roots. Responsible investing has been a key focus for Harbour since inception which is why they signed up to the United Nations Principles for Responsible Investment shortly after forming as a company. Over the last 13 years Harbour have remained champions of responsible investing and their continued focus on improving Environmental, Social and Governance approaches has resulted in a range of initiatives which they report on annually via a Sustainability Report. With rising interest in Responsible Investing within New Zealand, some DIY investors may be drawn to this focus from Harbour.

“We employ a strategy of integration and company engagement. This means our team research companies we invest in and actively checks for any environmental, social or governance (ESG) risks that may apply to them. It helps our Portfolio Managers develop an understanding of each company, and influences not only whether we invest in companies, but also how much. It helps us to unearth companies which may be great opportunities for long term growth, as well as companies with potentially hidden risks. We are able to use our role as a shareholder to engage with company leadership, highlight any concerns we may have and use our influence to encourage better behaviour.”

Experience

One thing that many DIY investors lack is experience. While some DIY investors may invest based on investment advice they have received, others will rely on the information they have to hand such as their own research and personal experiences. Investing in a managed fund, managed by an experienced asset manager, may be a good approach for some DIY platform investors. Managed funds can provide a good entry point into investing – they are both tangible and understandable. Investing with an asset manager which has extensive experience may provide DIY investors confidence when making investment decisions.

“Harbour’s success relies on the work and dedication of our team of experienced and proven professionals. With over 200 years of collective industry experience, navigating through different market cycles, you can rest assured your investments are in qualified hands.”

Harbour – the organisation

People

The team of over 30 staff at Harbour is led by Andrew Bascand, Managing Director. Andrew has extensive experience in asset management locally and internationally and founded Harbour Asset Management with four colleagues when their former employer AllianceBernstein left the New Zealand market in 2010. Under Andrew’s leadership the business has gone from strength to strength, retaining much of its key talent across the years and growing into a significant player.

Sustainability

One of the clear themes that comes to mind when thinking about Harbour is sustainability. As an organisation, Harbour Asset Management is a Toitū net carbonzero certified organisation. This means they measure, manage and offset their business carbon emissions. Sustainability is part of Harbour’s DNA – they have been a signatory to the PRI (Principles of Responsible Investing) since August 2010 and espouse responsible investing practices. In July 2022, Harbour published its first sustainability report for the year 2021. Here are a few ‘Flint picks’ from the report that we thought we’d share from their sustainability practices in 2021:

• Toitū net carbonzero organisation
• Winner: Best Ethical Retail Investment Fund Provider 2021 at the inaugural Mindful Money Awards
• Named as Responsible Investment Leader in RIAA’s (Responsible Investment Association Australasia) 2021 report
• 3 funds were certified as ‘Responsible Investment Certified’ funds from RIAA
• Harbour raised $12,000 for Roots of Empathy NZ

Harbour and Flint Wealth

Harbour is a shareholder in Flint Wealth, alongside Trustees Executors and Research IP. Flint is operationally independent and provides Kiwi investors access to funds from over 10 fund managers, including 16 Harbour funds.

“We are really excited by the work the Flint team are doing to make investing more user-friendly and accessible, breaking down barriers to entry and helping Kiwis take control of their financial futures.”

Happy investing!

Flint

References

https://www.jarden.co.nz/

https://www.goodreturns.co.nz/article/976516055/grtv-harbour-asset-management-andrew-bascand.html

https://www.harbourasset.co.nz/about-us/investment-philosophy/

https://www.harbourasset.co.nz/assets/Uploads/6862f5cacc/2021-Sustainability-Report-final.pdf