Milford Asset Management has lost five wholesale clients, including financial services provider Mercer, since its $1.5 million settlement last month with the Financial Markets Authority, which followed an investigation into alleged market manipulation.
Managing director Anthony Quirk would not disclose the value of Mercer's mandate but said the five clients had withdrawn $130 million in funds.
Substantial security holder notices released yesterday show Milford is no longer holding shares it previously managed on behalf of Mercer. Milford has more than $3 billion under management, including KiwiSaver funds.
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The Milford portfolio manager at the centre of the FMA investigation was not a party to the settlement and is still facing enforcement action from the FMA.
Quirk said four of Milford's five business divisions had experienced "net in-flows" of funds, or had remained unchanged, since the settlement.
"Wholesale [clients] have different drivers of their decisions," he said. "We've got 20,000 retail clients and the vast majority of them have stayed with us."
A Mercer spokesman said: "Mercer constantly monitors investment managers that we consider to be the best for a particular type of investment, to protect the integrity of capital markets and our investors, we will not comment further on our manager line up until it is appropriate."
Milford is also yet to reclaim a $281 million equities mandate that it previously held with the New Zealand Superannuation Fund.