Milford Asset Management and the New Zealand Superannuation Fund have agreed to part ways, a year after their relationship hit a rocky patch as a result of an investigation into alleged market manipulation at the fund manager.

The Super Fund suspended Milford's $281 million active equities mandate, which it had held since 2009, in April 2015 after the Financial Markets Authority began its probe into Milford.

At the time the Super Fund said it had put the mandate on hold until the investigation was completed. It has managed the funds in-house since then.

Milford agreed to a $1.5 million settlement in June 2015, but Mark Warminger - a portfolio manager who has been on extended leave from Milford since the FMA probe began - still faces High Court action, which is due to go before a judge in September.

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A Super Fund spokeswoman said the two organisations had "mutually agreed" to part ways, effective today.

"We consider that our active equity portfolio is adequately catered for through our in-house team and mandates with our existing two managers [Mint Asset Management and Devon Funds Management]," she said.

"We have no current plans to appoint a third external fund manager to replace Milford. The parting is an amicable one and we expect that what has been a long-standing relationship will continue cordially, albeit not in an investor/manager sense."

Milford managing director Anthony Quirk said the company had decided to focus resources on other areas including KiwiSaver and private wealth.

"We've got a lot of momentum in our business at the moment," Quirk said, adding that funds under management were approaching record levels, at $3.6 billion, including over $1 billion in New Zealand equities.

"We have to manage our capacity and we just didn't have capacity for a large wholesale account. That was the reality."

The firm currently manages over $600 million in KiwiSaver funds.

"We've got nice market positions but smaller market shares than we would like," Quirk said.

"We're not going to be a mass-market player in KiwiSaver - we're not going to take on the banks - but we've got a niche that we think we can get larger."

Private wealth was another big opportunity.

"That's a bit of a hidden jewel within our business," Quirk said. "We've got $850 million under private wealth advice and there's certainly scope to grow that."