Dan Cater should run our super schemes

Right now, Dan Carter has some time on his hands. He needs something to do. We know one of Dan’s great strengths is how he allocates the ball, once he receives it. Why not put him in charge of allocation in our super fund industry. He would perhaps be an improvement.

Sometimes he kicks, passes or runs with the ball. He passes to different people. How he allocates the ball has a significant impact on the whole game, and its always for the benefit of New Zealand. He passes to all the players in his team at some stage through the game, not just the one closest to him or the easiest to pass to. He doesn’t just copy all the other first fives.

An issue that needs far more discussion is how our funds industry allocate their funds to different players in our capital/asset markets and how much are they allocating to emerging New Zealand companies.

It’s often been said that we don’t have enough depth in our capital markets, don’t have enough savings. Really? It’s not like we have no funds. We had around $8 billion invested through finance companies in high risk property deals, some never to be seen again. The Government Super Fund and ACC both have about $18 billion each. March 2011 Reserve Bank data shows Kiwisaver funds under management of around $9 billion and non Kiwisaver funds of $59 billion.

So as with the Spingboks against the Wallabies in the RWC quarter finals – they had plenty of ball, they just didn’t allocate it optimally. Like investment cash, it’s what we do with it that makes a big difference. While my personal view is that compulsory super would be helpful, it is not as though there is no money to invest right now. If we do end up with compulsory super, but allocate everything overseas, will this actually help our country to grow?

So how does the super fund industry allocate the money they receive from others? How do they make the decisions that impact on the whole game like Dan Carter? Some would contend that these allocation decisions are less than optimal for New Zealand’s long term growth. How much of these investment pools are being invested right here in New Zeeland, in risker, growth companies, and agribusiness. Are the mandate’s they have flexible enough to allow such investment?

Will the new Financial Markets Authority (FMA) be a help or a hindrance to investment allocation, by not only of the bigger funds, but also the Mum and Dad retail investors? Will any advice they receive from advisors go outside of very conservative boundaries or suggest that investing in New Zealand is a good idea? The jury is out. What other rules are tilting the playing field towards not investing in New Zealand?

The NZX needs to be a useful vehicle to enable and facilitate investment and growth for the benefit of New Zealand.

If our children are going to build their lives in this his country, and we are going to maintain our standard of living, we need jobs and opportunities here in New Zealand that provide global scope and scale potential. That’s going to take some investment from our funds industry. We need to back ourselves a bit more.

Currently Fonterra and Graeme Harts empire are really our only organizations that fit that criteria. We need more CEO’s paid multi-million dollar packages, not less. It’s a sign of global success. There are other companies coming through such as Fletcher Building, Mainfrieght and potentially Xero to name but three, but we need 20 to 30, multi billion, multi country organizations who employ thousands of people globally, but have their head offices here in New Zealand. We missed opportunities with Nufarm and GlaxoSmithKline who started in Palmerston North and focused on soils and animals. They are now global players, but not based here.

The Rugby World Cup has been fantastic, and if nothing else shows us that we can do big things in a global market. It should build our confidence that we can build scope and scale entities based here in New Zealand.

Dan Carter and Fonterra have a lot in common – New Zealand based talent, that operates on the global stage, recognized as among the worlds best. We need more of both.