Bank of China NZ (BOC) head of asset management, Mark Ford, departed abruptly last week after a more than six-year stint running the group’s special immigration ‘investor visa’ fund.
Ford was made redundant, leaving the now $200 million wholesale fund bereft of asset management expertise, he said.
“My removal followed an internal audit report I requested on behalf of the bank’s investment committee identifying the bank’s conflicts of interest in managing the Immigration Fund,” he said. “Conflicts of interest typically arise when a bank’s asset management functionality is not sufficiently ring-fenced from the bank’s other commercial activities and was well-canvassed in Australia a number of years ago.”
Ford said his exit also put an onus on the fund supervisor, Public Trust, to ensure the scheme meets the “capacity and capability” requirements of the governing deed.
In a statement Public Trust said it “is not able to comment on specific client matters of this nature”.
“We can confirm, however, that the wholesale Bank of China immigration funds remain open and operational.”
In a statement, BOC said Ford left before the expiry of a notice period put in place as the bank disestablished the head of asset management role due to “changes in immigration settings” beyond its control.
“… which was therefore not an ‘abrupt’ exit,” the release says.
“We assure our clients and stakeholders that our wholesale immigration fund remains fully operational. Our dedicated team continues to manage the fund with the utmost professionalism and diligence, in strict compliance with all regulatory requirements and the terms of the Master Trust Deed, including the management of conflict of interests.
“The Bank has the capacity, capability, and competency to continue to manage this legacy wholesale immigration fund and will continue to comply with its obligations under the Master Trust Deed.”
Ford, a co-founder of Mint Asset Management among other high-profile NZ investment roles, was hired on a one-year contract (later extended) early in 2018 to bolster the BOC fund governance structures as it geared up to meet expected investor visa demand.
BOC launched the fund in 2016 in a global first for the Chinese financial institution.
Under the initial investor visa conditions, immigrants could fast-track NZ residency status by investing at least $1.5 million in local-domiciled funds for a minimum three of four years (depending on the amount).
At the time, visa applicants could rely on holding investments in geographically diversified bond and equity assets as long as the fund itself was based in NZ.
However, in 2022 the-then Labour-led government replaced the scheme with the ‘Active Investor Plus’ visa that requires immigrants to invest between $5 million to $15 million in NZ assets with a concessionary weighting towards directly held local companies and approved venture capital funds.
The original investor visa program attracted about $12 billion, largely into “passive investment in shares and bonds”, then Regional Development Minister, Stuart Nash, said last year.
At its peak the BOC fund hit about $500 million, Ford said, but has since declined to $200 million with a probable further wind-down period of three to four years as existing investors are able to cash out under the visa terms.
Ultimately, he said the fund could be in danger of losing its portfolio investment entity status if the number of underlying investors falls below a certain threshold.
However, the BOC release says the bank “is committed to upholding the trust placed in us by our clients, regulators, business partners, and the broader community”.
“We wish Mark Ford the best in his future endeavours.”
The BOC fund uses Harbour and Nikko for fixed income and Devon as equities manager.
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